Expropriation refers to the act of a government claiming privately-owned property against the owner’s wishes, typically for public benefit projects such as constructing highways, railroads, or other critical infrastructure. Although a government has the power to take private property, the property owner must be compensated fairly according to constitutional mandates.
Key Takeaways:
- Expropriation occurs when the government claims privately owned property for public use.
- Common projects requiring expropriation include highways, railroads, and airports.
- Property owners are entitled to fair compensation as stipulated by constitutional rights.
Understanding Expropriation
In the United States, the doctrine of eminent domain provides the legal basis for expropriation. Courts have acknowledged that the government has the implied power to seize property, provided they offer fair-market-value compensation to the former owners. In some areas, governments must first attempt to purchase the property before resorting to eminent domain. If expropriation proceeds, property seizure involves condemnation proceedings, which should not be confused with dilapidated property conditions.
Reasons for Expropriation Beyond Infrastructure
Another valid reason for expropriation involves public health threats, such as environmental contamination. Governments may act to relocate residents from affected areas, necessitating the expropriation of their property to safeguard public health.
Compensation Concerns Regarding Expropriation
The process of expropriation raises essential concerns about justification, recourse, and compensation. A significant debate persists over what constitutes fair market value compensation for expropriated property. While the law often defines fair market value as the highest price obtainable in an open market, this standard can sometimes fall short of what owners might receive in voluntary transactions.
Owners may also face inconvenience, business disruption, or relocation expenses, which aren’t always covered by traditional fair market value concepts. Various statutes, such as the federal Uniform Relocation Assistance and Real Property Acquisition Policies Act, provide partial compensation for these additional expenses.
Expropriations to Boost Tax Revenues
A pivotal Supreme Court decision in the early 2000s clarified the scope of eminent domain for increasing tax revenue (Kelo v. City of New London, 545 U.S. 469 [2005]). The ruling allowed New London, Connecticut to seize non-blighted private property solely to increase municipal revenues by transferring ownership to a private developer. This decision sparked significant public debate and ultimately led to more restrictive rulings and actions at both the state and federal levels to curb expropriation practices aimed exclusively at boosting tax revenues.
The Supreme Courts in several states—Illinois, Michigan, Ohio, Oklahoma, and South Carolina—later ruled against such takings. Furthermore, federal actions, including an executive order by President George W. Bush, have reinforced limitations on federal expropriation for economic development purposes.
Related Terms: Eminent Domain, Just Compensation, Condemnation, Fair Market Value.
References
- Department of Housing and Urban Development. “REAL ESTATE ACQUISITION AND RELOCATION”.
