Madison, WI - The United States Supreme Court recently
ruled, in Kelo v. City of New London, that local
communities could condemn private property through
their power of eminent domain for purposes of economic
development. Specifically, the Court held that the
city of New London’s condemnation of residential homes
and sale of the property to a developer to redevelop
the land with condominiums and satisfied the “public
purpose” test necessary for condemning private land.
The Court’s decision has sent shockwaves throughout
the country and has caused property owners to fear
that any piece of property (including an
owner-occupied house) can be condemned if the
community believes that the property can be used for a
higher and better purpose.
In response to this decision, legislation has been
introduced in both houses of the U.S. Congress. In the
Senate, U.S. Senator John Cornyn (R-Tex.) has
introduced legislation to prevent condemnation for the
purposes of economic development. Congressman James
Sensenbrenner (R-Wis.) has introduced a similar bill
in the House of Representatives titled the “Private
Property Rights Protection Act of 2005.” This bill
would prohibit communities from using their power of
eminent domain to acquire property for purposes of
economic development if federal funds would be used in
any way for the project. In addition, the U.S. House
of Representatives voted in favor of a resolution (by
a 365-33 margin) that expressed “grave disapproval” in
the Court’s decision “that nullifies the protections
afforded private property owners in the takings clause
of the Fifth Amendment.” Changes to eminent domain law
are also being considered by legislatures in approx.
twenty–four states.
The Wisconsin Legislature, for example, is considering
the creation of a task force to closely examine the
issue. Among the possible changes being discussed are:
- Prohibiting the condemnation of owner-occupied
homes for the purpose of redevelopment;
- Creating a new formula for better determining
the true market value of commercial property for
purposes of condemnation;
- Giving property owners whose businesses are
condemned the option of relocating within the
development.
Several other states are currently considering
measures to prevent seizures of private property for
economic development including:
- Georgia, Missouri, Florida, Oklahoma and New
Hampshire have created special committees to study
eminent domain and provide recommendations on how to
protect property owners;
- Alabama’s governor has indicated that he plans
on calling a special session in July or August to
restrict condemnations for economic development;
- New Jersey’s proposal would require elected
redevelopment boards and would prohibit city or
county employees from serving on redevelopment
boards that govern the city or county that employs
them;
- Illinois will consider legislation this fall
that would require the state assembly and governor
to sign off on eminent domain cases for economic
development.
The National Association of REALTORS® and the
Wisconsin REALTORS® Association will be actively
involved in the development of this legislation at
both the federal and state level to insure that
private property rights are adequately protected. If
you have any questions or comments, please contact Tom
Larson (tlarson@wra.org)
at (608) 240-8254.
Published: 8/4/2005
