Eminent Domain - Issue Summary
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| What is the fundamental issue? |
The U.S. Supreme Court's decision in the Kelo case endorsed the use of eminent domain for privately-sponsored economic development. Kelo allowed non-blighted property to be taken from one private owner and given to another private owner in furtherance of a "public purpose." Public reaction to the decision has been negative, prompting state legislatures and the U.S. Congress to draft legislation restricting the use of eminent domain for certain purposes.
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| I'm a Realtor®. What does this mean to my business? |
| Eminent domain does not have a direct effect on most common real estate transactions. However, for Realtors involved in urban redevelopment, uniform federal rules could pre-empt state rules developed with support from state Realtor associations. |
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| NAR Policy: |
At the 2005 Annual meeting NAR policy was amended to delete the phrase "public purpose" where it appears in NAR policy on property rights and substitute the phrase "public use". The latter phrase indicates that eminent domain powers should only be used to acquire property for ownership by a public entity or publicly-regulated common carrier, such as a railroad. New policy language was also added directing that states, not the federal government, should establish their own rules and laws governing the use of eminent domain. NAR policy also calls for a broad interpretation of "just" compensation to include not only the value of the property condemned but also all other reasonable and necessary costs generated by the condemnation action.
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| Legislative/Regulatory Status/Outlook: |
| Bills have been assigned to committees but no hearings have been scheduled. Not a high priority for leadership. |
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