Economic Development and the Future of Eminent Domain

The Engineering News-Record reports that "President Bush has weighed in on the debate over the use of eminent domain to spur economic development projects." Lawyers and members of the construction industry alike will remember last year's Supreme Court decision in Kelo v. New London, 125 S. Ct. 2655 (2005), permitting the city of New London to use its eminent domain power to condemn private property for economic development. Now President Bush has issued an executive order prohibiting federal agencies from seizing property through eminent domain for economic development. Last year the House passed a bill cutting aid to states that exercise eminent domain power for economic development. That bill is now before the Senate Judiciary Committee. For further discussion, see articles from ENR and The Washington Post.

This issue is also being addressed at the state level in Raleigh, N.C. A bill intended to prohibit eminent domain for economic development unanimously passed the state House and is now pending before the Senate. The bill would limit eminent domain to public uses allowed under existing law (such as construction of public roads and installation of utility lines). For a discussion of the N.C. bill, see here.