Eminent Domain: Still A Useful Tool Despite Its Recent Thrashing

Eminent domain has become a term of dread in our nation. Using the words "eminent domain" today is risky because the concept has been draped with negative news and connotations of property-owner abuse.

Rarely does eminent domain get credit for the positive things that have been accomplished through its use. Without it, our urban areas would be places without the great virtues of conformity and sensible land use.

How many good things have been supplied to the general public because eminent domain was used to acquire private property for a higher public use? Shouldn't eminent domain be used to take the land of an auto repair shop in order to provide a site for a charity hospital? Sites are needed for schools, hospitals, libraries and police stations. And where would our cities be if there were no roads, freeways or corridors of transit that were built with the aid of eminent domain?

In a rural environment, almost everyone agrees that it would be a justifiable sacrifice to take a rancher's land to build dams and lakes for providing water supply or electrical power to our cities' millions.

The current controversy and public discussion skims over the much-needed public projects that have been produced through eminent domain. Attention has been focused on a tiny segment of the eminent domain cases -- the rare use of the process to acquire land and blighted properties for redevelopment projects. When the frenzy dies down, most thoughtful Americans understand that it is sensible for government to "condemn land", which is otherwise known as acquiring properties through power of eminent domain. It's been happening for hundreds of years -- a time honored right of government.

Eminent domain has been hot topic nationally since the June 2005 U.S. Supreme Court ruling in the Kelo v. City of New London case, which gave governments the authority to condemn private property for development by private, for-profit investors.

The case focused on the City of New London, Conn.'s taking of waterfront property for a mixed-use commercial development. The small community expected that its actions would be a way to inject economic life into its waterfront. Instead it ignited a firestorm of public outcry across the nation. Almost overnight eminent domain became the most legislated property rights issue in the country, with 30 of the nation's state legislatures passing new eminent domain legislation in the last year. The new laws were designed to prevent eminent domain acquisitions that improperly deliver properties to private developers.

Legislators will respond when there is a public outcry, and a responsive government is a good thing. But when the fervor is peeled away from this legislation the new laws won't make a big impact in America. The cases where eminent domain has been used in conjunction with a private development are very rare, and the new laws will seldom be applied.

However, before we are too quick to dismiss the city leaders of New London as clumsy fumblers, we should consider the underlying merit in their intent.

Eminent domain can indeed be used to breathe new life into blighted areas, just as the New London leaders want to do. My company has been involved in thousands of eminent domain cases across the nation, and it is clearly evident to me that the use of eminent domain can lead to projects that stimulate economic rebirth.

In Houston, for example, land that was obtained to create the Minute Maid Park baseball stadium has benefited the community's downtown in a significant way. The stadium brings millions of people every year into downtown Houston, a place that had previously been a long way from being a lively 24/7 environment. The Houston stadium, an adaptive re-use of an old train depot, received an award from the Greater Houston Preservation Alliance. Around the ballpark, developers have created loft dwellings for young professionals, old buildings have been transformed into hotels, and a new high-rise residential tower is under development. This is all on downtown Houston's east side, which had been nearly a no-man's land in the 1990s.

Similar stories to that of downtown Houston can be told in many other communities.

Has every application of eminent domain in this nation been proper? Has this awesome power of government ever been misused? Certainly there have been problems and errors. Wise judgment is needed by our governmental leaders as they apply their eminent domain powers. If a mistake is made, then officials should be quick to correct it.

However, in most cases eminent domain is used sensibly, and we must not forget it. We should not be too hasty to give eminent domain a bad label. With proper planning and wise judgment eminent domain can be used to make our cities into greater places.

David M. Lewis founded Houston-based Lewis Realty Advisors in 1962. He formerly served as a member of the City of Houston Planning Commission. A certified appraiser, Lewis has been a lecturer in real estate economics and valuation at the University of Houston, the American Institute of Real Estate Appraisals and the Society of Real Estate Appraisers. Lewis was co-managing partner in the historic redevelopment of the Majestic Theater in San Antonio and he has been involved in other urban development activity.

Lewis formerly served as national governor of the Board of Governors of the Counselors of Real Estate organization. A significant firm in national real estate consulting, Lewis Realty Advisors has been involved in thousands of eminent domain cases over the years.