Most people are not aware that the United States Supreme Court recently upheld a decision that, under Eminent Domain, the government can now condemn your home or business and force you to accept fair market value and move in order to build a new grocery store or gas station, or even to make a vacant lot, if that’s what they want to do. This can also be done with very little warning or time to make plans for an alternate place to live or relocate your business.
Here’s what Wikipedia had to say about eminent domain:
“In law, eminent domain is the power of the state to appropriate private property for its own use without the owner’s consent. Governments most commonly use the power of eminent domain when the acquisition of real property is necessary for the completion of a public project such as a road, and the owner of the required property is unwilling to negotiate a price for its sale.”
At one time, eminent domain existed to help convert blighted areas into public use areas, usually something for the good of all citizens, such as a park, an educational facility, a public building like a courthouse, or something that would benefit the entire city or area. Eminent domain is also used for government projects such as building new roads, running railway tracks, and for military expansion. Historically, this is all eminent domain was to be used for.
But now, eminent domain might just be used to build that new Target or put up a new mall, or just about anything else, provided the local government believes they can gain more tax revenue from whatever developer builds there over what you or your neighbors would pay in taxes.
Capitalism is not necessarily a bad thing, and everyone should be allowed to seek to make the most money possible, in the shortest amount of time, if that’s what they want to do. However, with projects like economic diversification, many cities are waiving taxes for a couple of years and offering discounts and incentives to big businesses to come to their cities, thus providing more jobs and a better economy for the city as a whole.
All of this sound great, right? I mean, a small city that is largely based on just one product or resource can now be diversified, and a large call center or distribution center from a prominent company comes into town, offering high paying, lower skilled and mid-management jobs and the economy in the city improves, unemployment goes down, and the company, of course, brings a lot of business to the area too.
So what’s wrong with all this?
Well, if you are willing to move out of your home in order for this business to come to town, accepting the current fair market value and no compensation for the years you have put into your home, then nothing is wrong with it.
Sometimes, in order to find the prime location at the prime price for a business to build in a city, they choose existing locations. What would you do if one of those existing locations was your home?
Your home, no matter how long you have owned it, how much money you have put into it, how many children you have raised there, or any other factor, can be seized under eminent domain, through a process called condemnation, bulldozed to the ground, and you will get a check for the fair market value of your home at the time… nothing more, nothing less-and most of the time, there’s nothing you can do to stop it.
Perhaps it’s a case of the old adage: the needs of the many outweigh the needs of the few.
In this case, the needs of the homeowner who loses their home to eminent domain do not outweigh the needs of a new strip mall.
Yet, it gets worse. It’s not just your home, it could be your business too. How do you determine the fair market value of a business? Someone may be compensated for the cost of the land or the building, but how do you compensate the small business for the loss of income? The government doesn’t have to do this. All they have to do is pay fair market value for the property, but a thriving business has a much higher value than just what the land is worth, and as you learn in real estate, location, location, location.
Perhaps if the land were to be used to truly improve the city or provide a vital service, such as building a hospital, this wouldn’t be such a bad thing, but when the government can take your home or your business and turn it over to privately owned corporations with big bucks to spend anyway, something has gone wrong.
Eminent domain is just another one of those laws that was a good thing in its time but has now outlived its usefulness and the government is able to use this existing law to pretty much do whatever it wants with land you thought you owned. You don’t own it, because in actuality, if you did, no one could take it away from you. No, in actuality, you simply rent the land from the government, who can come and take it away from you at any time.
When America begins to take away personal freedoms in the name of development, something is wrong. Eminent domain is one of those laws that, if you truly understand how it works, keeps you from being able to feel safe and secure in your own home. One day, someone may come knocking on your door and tell you that your home is not your home any longer, and give you a few months to pack up your life and move. Good news though, you’re welcome to come and visit when the new Walmart Super Center is put up where your home used to be located.