States Vote to Strengthen Property Rights

The U.S. Supreme Court struck a blow against homeowners and small businesses on June 23, 2005, when it ruled in Kelo v. City of New London that emi­nent domain could be used for economic develop­ment purposes. By implication, the Court ruled that government could take land from one private owner and sell or give it to another if government officials believed that the new owner would use the land in a more productive manner to create jobs and increase tax revenues. By ruling in favor of the city, the Supreme Court greatly expanded the permissible uses of eminent domain beyond the traditional purpose of taking private property only for broadly used public facilities such as roads, schools, and fire stations. In the process, the Court has substantially weakened individual property rights.

Although many responded to Kelo with anger, many others greeted it warmly, setting in motion two conflicting responses that will take years to resolve. In many states, intense citizen anger led elected officials to enact much stronger state laws and constitutional amendments to better protect individual property rights and to prohibit Kelo-type takings. In other states, however, efforts to enhance such protections failed to become law, and many businesses and local officials have used the Kelo decision as the excuse to escalate their use of eminent domain for economic development purposes.