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States' Rights

The recent U.S. Supreme Court ruling upholding public use of eminent domain powers, has sparked a surge of legislative action across the country. Since the 5-to-4 ruling on Kelo v. City of New London, Conn., was handed down in June, more than two-dozen states have introduced or plan to introduce legislation that would limit the use of eminent domain.

The question being debated is whether the government should have the right to take private property for private uses, such as shopping centers and mixed-use projects that might create jobs and bring in revenue, while evicting homeowners and businesses. “It becomes an inflammatory issue, because people think ‘my home is at risk,’” says Kent Jeffreys, a legislative counsel for government relations at the International Council of Shopping Centers.

Many are wary that the backlash on eminent domain could hinder future revitalization. “We are concerned about the unintended consequences of the legislation and the rush to judgment,” says Jeffrey Finkle, president and CEO of the International Economic Development Council in Washington, D.C. The judicious use of eminent domain can allow communities to create jobs, retain jobs and develop a tax base, he adds.

Yet eminent domain remains a hot button issue, and legislative activity is likely to increase as state legislatures reconvene this fall. What the outcomes of those discussions will be is anyone's guess, because the definition of what constitutes “public use” can be a very complex topic, notes Jeffreys.

“You hate to see states throw out the baby with the bathwater and discontinue economic development in cities that really need it,” he says. On the other hand, Jeffreys adds, it is good to see legislators doing their jobs, reviewing eminent domain laws and definitions, and working to prevent any abuses of that power.

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