Pros and Cons of Eminent Domain

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Eminent domain is the practice of claiming land or reclaiming it from property owners through just compensation. There must be a purpose that support the “public good” in order for eminent domain to be enacted. When used appropriately, it can be an effective way to create transportation networks, build infrastructure, and distribute utilities. It can, however, also be used as a tool for corporate greed by enacting eminent domain for profit. Here are the key points to consider when evaluating the pros and cons of eminent domain.

Here Are the Pros of Eminent Domain

1. It allows for fewer administrative costs when building infrastructure.
The amount of paperwork that must be completed for a property transaction is incredible. Anyone who has ever secured a mortgage can verify this fact. Eminent domain makes the property transfer process easier, easing the red tape that could stall a project for the public good.

2. It stops delays that property owners may create.
In most instances of eminent domain, property owners are given every opportunity to get a fair market deal for their property, even if a portion of it is only being used – like during a roadway expansion project. Without this practice, one property owner could potentially stall any project just by refusing to sell.

3. It can be used to repair land that has been poorly maintained.
There are many parcels in every country that are neglected or abandoned. These parcels not only weigh on the property values of surrounding parcels, but makes the property virtually useless in severe instances. Eminent domain can be used to transform this land so it can become useful once again. This can then increase tax revenues, encourage further development, and other local benefits.

4. It gives taxpayers a say in how their community and various networks are developed.
If a needed enhancement to the transportation network is required, then the feedback portion of the eminent domain process can help the general public let officials know whether an eminent domain claim could be a good idea. This also lets officials know what areas need to be addressed so that long-term plans can also be created so there are fewer eminent domain surprises.

Here Are the Cons of Eminent Domain

1. It can be used to cause mass evictions.
In San Francisco, eminent domain was used in a neighborhood south of Market St. in order to relocate 4,000 low-value homes with high-value hotels and commercial projects. Some of the public may have derived a benefit from this action, but not everyone in the public did. Many people forget that even though an area may look better and be worth more, legitimate property owners were essentially forced out of their established homes to live somewhere else.

2. Not every offer is profitable to a property owner.
The issue is the “fair market value” of a property during an eminent domain claim. If property values are low and a mortgage is underwater, an eminent domain offer may effectively be a forced short sale. This would create debt for which the property owner would be responsible and they’d have no land or property potentially as collateral. They could literally be left with nothing.

3. It increases the chances of litigation.
If property owners don’t feel like an offer is fair, then they can file a lawsuit in court to halt the process. If a stay is issued, it could become possible to drag on a case for several years at taxpayer expense if a property owner had enough monetary resources at their discretion to do so. If the case is halted permanently, then those costs come out of taxpayer accounts and there is no public good outcome that occurs afterward. Money is spent on nothing.

4. It can be costly in numerous unanticipated ways.
One California family fought an eminent domain claim on their property that was worth $1.3 million. Not only did they win their lawsuit filed against the state, but they were awarded over $26 million as an outcome of the proceeding for the loss of income experienced during the events. These potential additional unanticipated costs must be considered when determining whether or not a claim should be processed.

The pros and cons of eminent domain show that when there is a clear public benefit and a fair price offered, it can be used as an effective process. Because there are so many ways this system can be abused, however, it is important for there to be restrictions placed on the practice of eminent domain so that it is only used as intended.