Three guidelines for a fair, smooth eminent domain process
May 7, 2014
The high-profile eminent domain case in Breckenridge, Colorado recently came to a close, leaving the government with 10 new acres of backcountry land and homeowners with a $115,000 payout for their forced sale. While a seemingly small monetary exchange, this case caused uproar among Breckenridge residents, and even made its way into the national spotlight.
The government has the right to acquire property, though there are limits of this power as addressed within the Fifth Amendment. Still, eminent domain cases are a concern for the property owners who are affected and can cause substantial heartache for homeowners forced to sell for a public project. Since the landmark Kelo versus City of New London case in 2005, eminent domain cases have increasingly been making the news. The Kelo case had major repercussions as the ruling allowed the City of New London to condemn a residential neighborhood and resell it to a private developer for economic development (i.e., to increase the tax base).
As an appraiser specializing in eminent domain, I have seen first hand the impact of residential takings. Homes have a sentimental value, and often mean far more to owners than just their brick and mortar foundations. Yet eminent domain remains a vital tool for the acquisition of property for developing road projects, expanding utilities, and creating new transportation improvements such as airports and ports. As a result, the government’s right to take private property via eminent domain will never be extinguished.
Condemnation refers to the legal process used to acquire private property, and although eminent domain is here to stay, the condemnation process has room to evolve and is already changing. Although not perfect, I have seen the condemnation process become more accommodating to landowners in a way that helps ease frustration and diminish negative impacts.
Condemning authorities, appraisers and other sub-consultants, such as engineers, land planners, contractors, and acquisition agents, should follow three major guidelines to help streamline this process.
Open lines of communication
I suggest that government organizations acquiring property connect with the community early on when discussing eminent domain projects. Town hall-type informational meetings in local libraries or churches should be held early in the planning process. This provides the community with access to real information on how the planned project may impact the area — real information instead of mere speculation. Gathering feedback from the community also allows the condemning authority to gain insight from the people who will benefit the most from the project. And, making early changes to the engineering plans can save a tremendous amount of money for the taxpayers in the long run. In the end, good communication practices are a win-win for both parties.
Conduct a fair property valuation
Another step to making the condemnation process more palatable is to ensure that homeowners receive fair market value for their properties. Although money can’t make up for the emotional burden that comes with losing a home, it can help a family build a new future at the current location or elsewhere.
From a valuation perspective, in cases where the condemning authority plans to acquire a complete property, the process is similar to any other appraisal. The appraiser must utilize market data to establish what the true market value is for that property.
The valuation process becomes more difficult when the government plans to acquire only a portion of a property. For example, in road expansion projects, it’s common for government organizations to seize backyard lots to extend the width of highways. In this case, appraisers must assess the property damage that will result from losing the backyard area. To do this, appraisers must compare similar properties in the market with normal backyards to those with reduced backyards, and use the difference in values to calculate property damages. Understanding how the market responds to specific deficiencies will help to properly compensate an owner being impacted.
Employ eminent domain conservatively
Even with a fair market value being compensated for a property, eminent domain cases can cause turmoil for homeowners, communities, and even government organizations. While uprooting Americans from their homes will likely never be a simple or socially-accepted task, it is possible for government organizations to ease the condemnation process by limiting the number and type of eminent domain projects they pursue.
Homeowners may have an easier time with the condemnation process when they know their losses will help the greater public good. Land seizures to alleviate roadway congestion, to provide space for a needed airport expansion, or to develop a public park tend to be accepted more easily with a community. Land seizures used to increase municipal revenue, however, tend to cause tremendous dissent, as evidenced by Kelo versus City of New London and the recent Philadelphia home seizure used to build a high-end shopping center. People are far less willing to give up their homes for government gains, and for that reason, government organizations should be cautious when employing eminent domain for these cases. The process not only positions local governments in a negative light, but also tends to taint seized lands or create difficulties for planned development projects, a reality which can be seen with the property in the Kelo case, which remains vacant today.
Eminent domain is a hot-button topic for both government organizations and landowners. These cases will never be easy for the two sides involved, but through open communication between the government and the community, fair valuations, and conservative use of eminent domain, condemning authorities can diminish the negative repercussions of this necessary law.
Posted by: Nick Chop
