Supreme Court Backs Eminent Domain Powers

One of the key decisions handed down by the U.S. Supreme Court this term was its ruling in favor of local governments exercising eminent domain powers to support economic development.

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The high court sided with the city of New London, Conn. in a lawsuit brought against it by nine homeowners. The city sought to seize the homes and bulldoze them to make way for an office complex. The homeowners maintained the taking of property in this case violated their rights as it was not for public use. The Court’s decision gave local governments broad latitude to utilize eminent domain powers to promote economic development.

As a result of the Court’s 5-4 ruling, some believe municipalities will be more aggressive in condemning properties for development for a wide range of uses — everything from shopping malls to hotels. But many feel such executions will be fought at the state level. In eight states, the use of eminent domain for economic development is restricted unless it’s used to eliminate blight. Some states, such as Texas, have already moved to counter the Court’s ruling.