Eminent Domain Restrictions Don't Hurt Growth

A recent report has found that restricting the government's eminent domain powers does not harm economic growth.

1 minute read

January 30, 2008, 11:00 AM PST

By Nate Berg


"Since the Supreme Court sanctified eminent domain on behalf of private developers in the dreadful 5-4 Kelo ruling in 2005, 42 states have passed some restriction on the practice. Some reforms have been far-reaching, as in Florida, which barred public entities that seized property from transferring it to private hands for 10 years after the seizure. Other reforms are more modest, changing the definition of 'blight' or throwing up other obstacles to overeager planners."

"So the Institute for Justice, which spearheaded the original campaign to save Suzette Kelo's home, decided to crunch some numbers. First, the report assigns each state to one of three categories according to the level of reform implemented after Kelo: 'strong,' 'moderate' or 'none.' Then it compares the data for construction jobs, building permits and property-tax revenue before and after the effective dates of the reforms for each state. The verdict: So far, there has been no discernable hit to economic activity from the restriction of eminent domain, even in those states with the broadest reforms."

Wednesday, January 30, 2008 in The Wall Street Journal

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