Wednesday, April 17, 2013

Blog Assignment #2

Government’s Power of Eminent Domain
Blog Assignment #2

By: Lulu Carrizales

            The American Dream.  A house with a white picket fence and 2.5 kids.  Immigrants from all over the world came to America in search of this dream.  To own a home for their families and themselves, but what happens when your dream is taken from you?  And how can it be legal for someone- let alone the government to do so?  The reality is that the government does have the right to take your private property.
            The government’s right to take private property for the benefit of the public is called eminent domain.  Eminent domain is not the government being out to get private citizens’ property for no reason.  The reason behind eminent domain is to create something that is necessary for people such as but not limited to freeways, highways, or even street lamps.  We can all agree that without those things, our lives would not be as simple.  Imagine trying to get to work or school everyday without freeways or walking home at night without street lamps not to mention stoplights.  This is because of “public use.”
            Public use requires that if the government does want to take your private property it must be for the “good of the public”.  It is defined to include roads, parks, schools, and government buildings, which clearly are for the good of everyone.  If the government did not have the right of eminent domain, individual property owners would have a spatial monopoly.  They would be incentivized to hold onto their land.  A spatial monopoly is when a single landowner controls the supply of the land or property type in a specific geography in the local real estate market.  Roads would have to circle around homes or houses would be in the middle of parks.
            Although, it may seem ‘unfair,’ eminent domain cannot simply happen with a snap of your fingers.  The government must meet two specific requirements when exercising eminent domain.  We have already discussed one of them: public use.  The other requirement is just compensation.  If the government proves that they are taking your land for public use it does not mean that you will be homeless.  The government must provide the property’s present market value to the landowner.  To help the landowner, the market value must be based at its highest and best use.  The landowner is also protected by due process.  Due process is the landowner’s right to sue the government and have a court trial over their land being seized by the government.
            In conclusion there are four terms that we should know: eminent domain, just compensation, public use, and due process.   Eminent domain is an encroachment upon private property rights.  It is a gray area because sometimes defining “public use” is not agreed upon by everyone.  Not surprisingly, more than 40 states have passed some type of law or amendment that restrict the use of eminent domain.   

Real Estate Analysis Environments and Activities, pg 165-166 Julian Diaz III, J. Andrew Hansz.

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