The biggest news in real estate during the summer of 2005 was the decision by the Supreme Court relaxing eminent domain requirements. Eminent domain is the right of government to seize private property for public use (with compensation).
The high profile case, Kelo vs. the City of New London (Conn.) raised key property rights issues. The high court sided with New London officials whose economic development plan called for taking homes in a working class neighborhood to make way for private developers which would provide a greater tax base for the city. The ruling reaffirmed New London’s right to act based on its economic development plan. The opinion set forth did not preclude states from maintaining public use requirements that are more strict than the one involved in this case.
Typically, cities have exercised their eminent domain rights for projects with a direct public purpose, such as schools, road expansion or bridges. This was the first instance of eminent domain transferring ownership to private corporation to boost investment in the city and increase tax dollars.
The National Association of Realtors had filed a “friend of the court” brief, arguing for a stricter standard on the public use question. The court rejected the NAR”s position, determining it was inappropriate for others to second guess the city’s development plan. The NAR is developing resources to assist townships and citizens concerned about the impact of this decision .
The high profile case, Kelo vs. the City of New London (Conn.) raised key property rights issues. The high court sided with New London officials whose economic development plan called for taking homes in a working class neighborhood to make way for private developers which would provide a greater tax base for the city. The ruling reaffirmed New London’s right to act based on its economic development plan. The opinion set forth did not preclude states from maintaining public use requirements that are more strict than the one involved in this case.
Typically, cities have exercised their eminent domain rights for projects with a direct public purpose, such as schools, road expansion or bridges. This was the first instance of eminent domain transferring ownership to private corporation to boost investment in the city and increase tax dollars.
The National Association of Realtors had filed a “friend of the court” brief, arguing for a stricter standard on the public use question. The court rejected the NAR”s position, determining it was inappropriate for others to second guess the city’s development plan. The NAR is developing resources to assist townships and citizens concerned about the impact of this decision .
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