The Neglected Political Economy of Eminent Domain

This Article challenges a foundational assumption about eminent domain—namely, that owners are systematically undercompensated because they receive only fair market value for their property. In fact, scholars may have overstated the undercompensation problem because they have focused on the compensation required by the Constitution, rather than on the actual mechanics of the eminent domain process. The Article examines three ways that “Takers” (i.e., nonjudicial actors in the eminent domain process) minimize undercompensation. First, Takers may avoid taking high subjective value properties. (By way of illustration, Professor Garnett discusses evidence that Chicago’s freeways were rerouted in the 1950s to avoid urban Catholic churches.) Second, in addition to paying compensation for the condemned property, Takers frequently must pay additional compensation to property owners in the form of “relocation assistance.” Third, Takers and property owners may voluntarily settle on above-market compensation during precondemnation negotiations. (As an example, Professor Garnett includes an empirical case study of property acquired, under the threat of eminent domain, for a manufacturing facility in Indiana.) The Article concludes by reflecting upon current efforts to reform eminent domain legislatively. Prominent legal scholars recently have proposed compensation-based reforms as an alternative to constraints on the use of eminent domain. This Article rejects that suggestion, arguing that there are two problems, unique to takings raising “public use” questions, that more money cannot solve: first, high compensation levels may undermine political resistance to questionable projects; second, private takings may generate noninstrumental harms that will persist even as compensation increases.