The Power of Eminent Domain
The power of eminent domain is included in the US constitution as a means of taking private land for public use. However, when the Eminent Domain is applied, the Fifth Amendment provides for just compensation (Paul, p.84). It is unfortunate that governments at all levels have recently expanded the powers of eminent domain to include the ability to take one’s private land for the benefit of another private individual. As a result, the government should not use eminent domain because it harms small businesses, causes market inefficiency, and usually results in unfair compensation. To start with, many state governments have abused the eminent domain to put small business owners out of business and to redistribute the land to wealthier people who will rake in substantial tax revenues for the city councils. For instance, in Berman V Parker, the court allowed the government to transfer property one person to another if such a transfer serves a public purpose.
Small Businesses Affected by Eminent Domain
Secondly, Glendale Council’s unanimous agreement to allow the Glendale Urban Renewal Authority (GURA) to take land from private citizens such as Saeed Kholghy is another illustration of how small businesses lose when eminent domain is exercised (Levine, Ronit & Parchomovsky, p.440). This was despite the fact that Kholghy and his family had on previous occasions tried to get permission from the city council to develop the land. However, this thinking is flawed since it views individuals as substitutable for each other therefore poking holes in the principle of inherent dignity.
Market Inefficiency Caused by Eminent Domain
As well, exercising eminent domain leads to market inefficiencies since when a government gives one business an opportunity to develop over the others, the forces of demand and supply are not allowed to shape market conditions. A business that thrives because the government has favored it is a fail no matter how many people it employs since its owners are gaining from what they have not earned by snatching it from its rightful owners (Chen, Daniel & Yeh, p.34). For instance, Mr. Mbogo lost his property in 2016 to more wealthy business owners who would use the land for construction of a trendy gateway to the art district of the city of Dallas (Levine et al., p.442). If the transfer of ownership were through the exchange in a free market, it would be prudent to state that such an activity led to market efficiency. However, the forceful eviction of Mr. Mbogo shows the government's disregard for market efficiency. Thus, to promote market efficiency, governments should stop exercising eminent domain.
Unfair Compensation in Eminent Domain Cases
Furthermore, the governments do not give a fair compensation for the land they seize from private owners for public use. This is especially so due to the subjective value that owners assign to their property which is hard to measure in financial terms. For instance, the supreme court case of Kelo V New London brought to light the sentimental value that most landowners associate to their property. In the case, the landowners told of how they had built their dream homes from places that were run down and therefore the market value was not sufficient to compensate them. Therefore, governments should not exercise eminent domain.
Conclusion
To sum up, the author argues that governments should not exercise eminent domain since it takes advantage of the poor, perpetrates market inefficiency, and in most cases, the compensation given to the property owner is insufficient.
Cited Works
- Berman v. Parker, 348 U.S. 26, 75 S. Ct. 98, 99 L. Ed. 27 (1954).
- Chen, Daniel L., and Susan Yeh. “Government Expropriation Increases Economic Growth and Racial Inequality: Evidence from Eminent Domain.” (2017).
- Kelo v. New London, 545 U.S. 469, 125 S. Ct. 2655, 162 L. Ed. 2d 439 (2005).
- Levine, Ronit, and Gideon Parchomovsky. “Is the Government Fiscally Blind? An Empirical Examination of the Effect of the Compensation Requirement on Eminent-Domain Exercises.” The Journal of Legal Studies 45.2 (2016): 437-469.
- Paul, Ellen Frankel. Property rights and eminent domain. Routledge, 2017.
