The Eminent-Domain Game

FACED with falling revenues and population, many cities in recent years have had to work extra hard to to raise money and help reduce urban blight. One of the tools they have for managing those issues is the ability to exercise the power of eminent domain.

But it's an option cities and towns should use in more common-sense fashion - instead of resorting to eminent domain as a heavy-handed fix to alleviate budget troubles or satisfy a thirst for development.

The Constitution allows cities and towns to take private land if it is done for public use and if "just" compensation is paid to the owner. Traditionally, eminent domain has been used to acquire land to build roads, utilities, or other public infrastructure.

In recent decades, though, the courts have unfortunately expanded the notion of what constitutes public use. It has been interpreted to mean creating new retail or commercial space, for instance, to help broaden a town's tax base. Take Atlantic City, where an entire black middle-class neighborhood was taken within the past five years to build a tunnel to a new casino that has yet to be built. Or Florida's West Palm Beach County, which condemned a family's home so that the manager of a planned public golf course could live there.

A recent study by The Institute for Justice, a nonprofit property-rights advocacy law firm in Washington, cited these and more than 10,000 other examples of misuse of eminent domain. In 3,700 cases, homeowners or small business were forced to sell property to private developers.

Supporters of a broader use of eminent domain say it's a critical tool for many urban areas, which have tax- exempt properties like universities and other nonprofits to factor into their budgets. But other options for boosting budgets are available, such as assessing "impact fees" - one-time charges on new developments. Such fees can help reduce taxpayers' burden, especially when fees offset the infrastructure costs of development.

Broadening the tax base and encouraging urban renewal is one thing. Exercising eminent domain for strictly private development is another. Citizens must ensure their elected officials know the difference.