Eminent Domain: Information about Its Uses and Effect on Property
Owners and Communities Is Limited (30-NOV-06, GAO-07-28).	 
                                                                 
In the Transportation, Treasury, Housing and Urban Development,  
the Judiciary, the District of Columbia, and Independent Agencies
Appropriations Act, 2006, Congress mandated that GAO conduct a	 
nationwide study on the use of eminent domain by state and local 
governments. This report provides information on (1) the purposes
for and extent to which eminent domain can be and has been used; 
(2) the process states and select localities across the country  
use to acquire land, including by eminent domain; (3) how the use
of eminent domain has affected individuals and communities in	 
select localities; and (4) the changes state legislatures made to
laws governing the use of eminent domain from June 2005 through  
July 2006. To address these objectives, GAO reviewed relevant	 
provisions in federal, state, and local laws; conducted site	 
visits to various redevelopment projects where eminent domain was
used; and interviewed multiple national associations of local and
state government officials and planning professionals, national  
public interest groups, and national property rights groups to	 
gain their perspectives on the use of eminent domain and its	 
effect on communities and property owners. The Department of	 
Transportation provided technical comments on a draft of this	 
report, which have been incorporated where appropriate. 	 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-07-28						        
    ACCNO:   A63764						        
  TITLE:     Eminent Domain: Information about Its Uses and Effect on 
Property Owners and Communities Is Limited			 
     DATE:   11/30/2006 
  SUBJECT:   Appraisals 					 
	     Compensation					 
	     Economic development				 
	     Eminent domain					 
	     Fair market value					 
	     Federal procurement				 
	     Federal regulations				 
	     Federal/state relations				 
	     Local governments					 
	     Property						 
	     Public lands					 
	     Standards						 
	     Strategic planning 				 
	     Urban planning					 

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GAO-07-28

   

     * [1]Results in Brief
     * [2]Background
     * [3]States and Localities Used Eminent Domain for Various Purpos

          * [4]National Organizations, State Agencies, and City Officials C
          * [5]No Aggregate Data Exist on the Number of Instances and Purpo

     * [6]Although Many Laws Govern Land Acquisition, Including Eminen

          * [7]Federal and State Governments Set Compensation and Relocatio
          * [8]State and Local Laws Further Direct Authorities on How to Ac
          * [9]Authorities Follow Several Similar Steps in Projects that Ca

               * [10]Project Planning Stage
               * [11]Property Valuation Stage
               * [12]Property Acquisition Stage
               * [13]Relocation Stage

     * [14]Use of Eminent Domain Generates Benefits and Costs Affecting

          * [15]In Cases We Reviewed, Conditions of Condemned Property Varie
          * [16]Characteristics of Selected Redeveloped Areas Varied, with L
          * [17]Property Owners and Groups Representing Them Reported Negati
          * [18]Property Owners and Groups Representing Them Raised Concerns

               * [19]Owners May Not Receive Public Notices and May Have
                 Limited O
               * [20]Blight Designations May Be Broadly Construed and Affect
                 Nonb
               * [21]Some Property Owners Claim They Received Insufficient
                 Compen

     * [22]Since June 2005, Many State Legislatures Have Enacted Change

          * [23]Slightly More Than Half of All State Legislatures Modified T

               * [24]Restrictions on Eminent Domain Use for Certain Purposes
               * [25]Procedural Changes
               * [26]Changes in Definitions

          * [27]Several States Had Constitutional Amendments on Fall Ballots
          * [28]Some States or State Associations also Commissioned Studies

     * [29]Observations
     * [30]Agency Comments and Our Evaluation
     * [31]Appendix I: Objectives, Scope and Methodology
     * [32]Appendix II: GAO Contacts and Staff Acknowledgments

          * [33]GAO Contact
          * [34]Acknowledgments

               * [35]Order by Mail or Phone

Report to Congressional Committees

United States Government Accountability Office

GAO

November 2006

EMINENT DOMAIN

Information about Its Uses and Effect on Property Owners and Communities
Is Limited

GAO-07-28

Contents

Letter 1

Results in Brief 3
Background 6
States and Localities Used Eminent Domain for Various Purposes and to
Varying Degrees, but the Extent of Eminent Domain Use Is Unknown Due to
Limited Data 8
Although Many Laws Govern Land Acquisition, Including Eminent Domain Use,
Common Practices Exist Nationwide 14
Use of Eminent Domain Generates Benefits and Costs Affecting a Wide Array
of Community Interests and Individuals 28
Since June 2005, Many State Legislatures Have Enacted Changes to Their
Eminent Domain Laws 37
Observations 44
Agency Comments and Our Evaluation 46
Appendix I Objectives, Scope and Methodology 48
Appendix II GAO Contacts and Staff Acknowledgments 53

Figures

Figure 1: Federal, State, and Local Laws Condition the Use of Eminent
Domain 18
Figure 2: Common Real Estate Acquisition Stages in Visited Localities 20
Figure 3: Changes to State Eminent Domain Laws from June 23, 2005, through
July 31, 2006 39

Abbreviations

DOT Department of Transportation FHWA Federal Highway Administration HUD
Department of Housing and Urban Development STIP Statewide Transportation
Improvement Program URA Uniform Relocation Assistance and Real Property
Acquisition Policies Act of 1970

This is a work of the U.S. government and is not subject to copyright
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separately.

United States Government Accountability Office

Washington, DC 20548

November 30, 2006

The Honorable Christopher S. Bond Chairman The Honorable Patty Murray
Ranking Member Subcommittee on Transportation, Treasury, the Judiciary,
Housing and Urban Development, and Related Agencies Committee on
Appropriations United States Senate

The Honorable Joe Knollenberg Chairman The Honorable John W. Olver Ranking
Member Subcommittee on Transportation, Treasury, Housing and Urban
Development, The Judiciary, District of Columbia, and

Independent Agencies Committee on Appropriations House of Representatives

The protection of property rights plays a vital role within a market
economy by allowing property owners to control their property and
therefore benefit from its use, sale, or value. However, elected federal,
state, and local government officials long have relied on eminent
domain--the government's power to take private property for a public use
while fairly compensating the property owner--to assemble land needed to
meet their constituents' various public needs. The debate surrounding the
use of eminent domain by state and local governments was invigorated by
the 2005 United States Supreme Court decision in Kelo v. City of New
London (Kelo decision), which involved the purpose for which a government
authority can invoke its eminent domain power.^1 The decision allows
private-to-private transfer of property for economic revitalization
purposes pursuant to a city development plan.

^1545 U.S. 469 (2005).

In the Transportation, Treasury, Housing and Urban Development, the
Judiciary, the District of Columbia, and Independent Agencies
Appropriations Act, 2006 (2006 Act), Congress included provisions
addressing the use of eminent domain for private-to-private transfers of
property for economic development purposes.^2 The 2006 Act also mandated
that we conduct a nationwide study on the use of eminent domain. Focused
on state and local government use of eminent domain, this report provides
information on (1) the purposes for and extent to which eminent domain can
be and has been used; (2) the process states and select localities across
the country use to acquire land, including by eminent domain; (3) how the
use of eminent domain has affected individuals and communities in select
localities; and (4) the changes state legislatures made to laws governing
the use of eminent domain from June 2005 through July 2006.

To address these objectives, we reviewed constitutional provisions in all
50 states to determine whether states require a public use in order to
invoke eminent domain and that "just" compensation (generally fair market
value) be paid to property owners whose property is acquired through
eminent domain. We conducted site visits to five cities--Baltimore,
Chicago, Denver, Los Angeles, and New York--where we toured projects for
which eminent domain was used; reviewed detailed project-specific
documentation, and interviewed local officials, property rights groups,
and property owners to document their respective positions and concerns
about eminent domain use within their communities. In addition, we
interviewed multiple national associations of local and state government
officials and planning professionals, national public interest groups, and
national property rights groups to gain their perspectives on the use of
eminent domain and its effect on communities and property owners. From
some of these national organizations, we solicited project examples in
which eminent domain was used. We interviewed officials from 10
state-level departments of transportation on their land acquisition
practices, including the use of eminent domain. Furthermore, we
interviewed officials at the U.S. Departments of Transportation, Housing
and Urban Development, and Justice, and the Environmental Protection
Agency about how federal programs or funding may be involved in eminent
domain proceedings undertaken by state and local governments. Finally, we
monitored changes to provisions of eminent domain laws from June 2005
through July 2006 in 50 states. In addressing our objectives, the lack of
comprehensive data on the use of eminent domain in states across the
nation limited the scope of our work and our methodological options.

^2Pub. L. No. 109-115, div. A, title VII, S 726, 119 Stat. 2396, 2494 -
2395 (Nov. 30, 2005).

We conducted our work from January through November 2006 in accordance
with generally accepted government auditing standards. Appendix I
discusses our scope and methodology in further detail.

Results in Brief

Officials from national organizations, states, and cities with whom we
spoke cited common public purposes for which eminent domain can be or has
been used, but limited data preclude a determination of the extent to
which eminent domain has been used nationwide. Purposes cited included
building roads and other transportation-related projects, construction of
state and municipal facilities, the elimination and prevention of blight,
remediation of environmental contamination, and economic development.^3 We
obtained data on the specific instances and purposes for which eminent
domain had been used from selected state departments of transportation and
local authorities. For example, officials from state departments of
transportation that we contacted reported collecting some information
related to their use of eminent domain, such as the number of properties
or portions of properties acquired through eminent domain. According to
information provided by Baltimore city officials, their city most often
invoked its eminent domain power to assemble land for redevelopment
projects that involved blight removal, while Los Angeles officials said
that the city most often used it for street improvements. Although some
selected state departments of transportation and local authorities
provided us data on their eminent domain use, no aggregate national or
state data exist, thereby precluding us from any statewide or national
assessments of (1) how frequently eminent domain is used, (2) how often
private-to-public or private-to-private transfer of property occurs, or
(3) the purposes for which eminent domain has been used by state and local
governments. The data limitations result from factors such as multiple
authorities within a state having power to invoke eminent domain and
states not having central depositories to collect such data. For example,
in Virginia, no state agency tracks the use of eminent domain by the at
least 40 types of authorities (such as school boards) that have the power.

^3For purposes of this report, we generally defined blight as a condition
of a property or area that is detrimental to the physical, social, or
economic well-being of a designated area. We derived this definition from
our review of specific blight definitions used by 10 states--California,
Colorado, Florida, Illinois, Massachusetts, Missouri, New York, Texas,
Virginia, and Washington.

Although federal, state, and local laws and regulations direct how
property owners will be compensated when eminent domain is used, the basic
procedural requirements for invoking eminent domain exhibit similarities
nationwide. Federal and state constitutions and laws outline how property
owners whose land is being acquired through eminent domain should be
compensated. In addition, federal and state laws establish relocation
benefits for displaced residents and businesses. In particular, when
authorities acquire property for a project in which federal funds are
involved, states and localities become subject to the Uniform Relocation
Assistance and Real Property Acquisition Policies Act of 1970 (URA), which
establishes relocation payment amounts and procedures.^4 However, many
state and local officials commented that the limits the URA places on
certain relocation expenditures were too low and needed to be revised.
State and local laws also set forth basic procedural requirements--which
share certain similarities nationwide--for how authorities acquire land,
including by eminent domain.^5 These procedures can be divided broadly
into four stages or steps. The initial step is project planning, during
which a public body can consider and approve a redevelopment plan, which
outlines the need for the project and identifies parcels required to
complete the project. After such plans are approved, authorities typically
begin the land valuation process, during which they conduct title studies
to determine legal ownership of needed parcels and complete appraisals.
During the third stage, land acquisition, authorities often make a formal
offer to an owner and attempt to negotiate the purchase of the property.
If the authority and the property owner cannot agree to a price or if an
authority cannot locate an owner, the authority then begins the formal
legal proceedings to acquire the property by eminent domain. Finally, once
the property has been acquired, either through negotiated purchase or
eminent domain, authorities must compensate the owner justly and provide
relocation assistance that can include payments for moving and related
expenses.

^4Pub. L. No. 91-646, 84 Stat. 1894 (Jan. 2, 1971) codified at 42 U.S.C. S
4601, 4602, 4604, 4605, 4621 to 4638, and 4651 to 4655.

^5Authorities acquire land in multiple ways, including through eminent
domain. Another form of land acquisition by authorities is through
negotiated settlement purchase. The steps addressed in this report that
may precede the use of eminent domain also apply in cases of negotiated
settlement purchase.

The projects in which eminent domain is used generate benefits and costs
that affect, whether positively or negatively, a wide range of community
interest and individuals. Furthermore, it is difficult to establish
measures to quantify the wide range of costs and benefits to individual
communities of projects involving eminent domain. In addition, aggregate
data on eminent domain use and frequency, as well as costs and benefits,
are not available, which would be necessary to examine the impact of
eminent domain on a community. Based on the projects that we reviewed or
visited, we noted that the areas slated for redevelopment exhibited a
variety of conditions. For example, some areas contained vacant and
unutilized land and structures and some contained operating businesses and
occupied residences. For selected projects where eminent domain was used
that we reviewed or visited, authorities described the previously existing
conditions of the areas and they told us or we observed some of the
benefits realized by communities after the projects were completed. Local
officials and officials from most of the selected projects told us that
the areas generally could be characterized by different conditions, such
as modernized roadways, additional housing, and increased commercial
activity. Meanwhile, property rights groups we interviewed described some
of the negative effects of eminent domain use, such as assembled land
going unused. Property rights groups and a national community organization
also highlighted other negative effects, such as loss of small businesses
and jobs, decreases in affordable housing, and the dispersal of
communities. In addition to these losses, the groups also noted that the
ways in which authorities implement procedures for using eminent domain
also could adversely affect property owners. They cited examples such as
lack of notice, blight designations that negatively impacted neighboring
nonblighted properties, significantly undervalued appraisals, and
inadequate compensation.

From June 23, 2005, through July 31, 2006, many states enacted changes to
their eminent domain laws. According to our analysis, 29 states enacted at
least one of three general types of changes to their eminent domain laws.
First, 23 of the 29 states placed restrictions on the use of eminent
domain, such as prohibiting its use to increase property tax revenues,
transfer condemned property to a private entity, or assemble land for
projects that are solely for economic development. Second, 24 of the 29
states established additional procedural requirements, such as providing
further public notice prior to condemnation. Finally, 21 of the 29 states
enacted changes that defined or redefined blight or blighted property,
public use, or economic development. For example, some states established
that economic development and the public benefits resulting from it,
including increased tax revenue and increased employment, do not
constitute a public use. The remaining 21 states had not enacted changes
to their eminent domain laws during that time period based on our
analysis. Some state legislatures approved constitutional amendments
restricting current eminent domain laws, which were placed on the ballot
for voter consideration. In three states, citizen-initiated proposals to
amend the state constitution obtained the requisite number of signatures
to be placed on a ballot. Finally, some states, including those that did
and did not enact any changes, and state associations commissioned studies
to determine if any changes were needed to their eminent domain laws.

We provided a draft of this report to the Departments of Justice,
Transportation and Housing and Urban Development for their review. The
Department of Transportation provided technical comments, which have been
incorporated where appropriate. The Departments of Justice and Housing and
Urban Development did not have any comment.

Background

An inherent right of sovereignty, eminent domain is a government's power
to take private property for a public use while compensating the property
owner.^6 Eminent domain is also referred to as "appropriation,"
"condemnation," and "taking." The Fifth Amendment of the United States
Constitution expressly restricts the federal government's use of eminent
domain; it requires that eminent domain be invoked only for a "public use"
and "just compensation" be paid to those whose property has been taken.
The Fourteenth Amendment extends the legal requirements of public use and
just compensation to the states through its Due Process Clause. In
addition, states have a number of constitutional provisions, statutes, and
case law outlining the various permissible uses of eminent domain,
recourse available to property owners, and procedures required to take or
evaluate a property. State legislatures generally determine who may use
eminent domain by delegating eminent domain authority to state or
quasi-public entities, such as housing, transport, and urban renewal
authorities, which may exercise that power only for the purpose for which
it was established. States may also grant eminent domain authority to
local governments, which may further delegate this authority to a
designee, such as a development authority or community group. Finally,
some states authorize private companies to exercise eminent domain--for
example, for the provision of utility services.

^61-1 Nichols on Eminent Domain S 1.11 (2006); see also Mississippi & Rum
River Boom Co. v. Patterson, 98 U.S. 403, 406 (1878) (eminent domain
"appertains to every independent government [and] requires no
constitutional recognition; it is an attribute of sovereignty").

Courts have addressed the meaning and application of public use in
numerous cases throughout the years. In 2005, the United States Supreme
Court, in Kelo v. City of New London, upheld the City of New London's
authority to use eminent domain to condemn and acquire property located
within an area designated as a "distressed municipality," even though the
condemned property was not blighted or otherwise in poor condition.^7 This
decision allowed for private-to-private transfers of property for economic
development purposes, such as New London's action in an area that had
experienced decades of economic decline. According to some scholars, the
use of eminent domain for such a purpose has been permitted since the
"mill acts" of the colonial and pre-Revolutionary period that permitted
the flooding of private property to allow the operation of mills
downstream; mills were considered the main source of power and closely
linked to economic development.^8 The Supreme Court emphasized that the
Kelo decision did not preclude states from placing further restrictions on
the exercise of eminent domain. Many states have been reviewing the use of
eminent domain and considering legislative changes or constitutional
amendments to control its use.

In addition to the Constitution, the Uniform Relocation Assistance and
Real Property Acquisition Policies Act of 1970 sets the federal standard
for acquisition of real property for public projects involving federal
financial assistance, including prescribing specific benefits, treatment,
and protections for those whose property is acquired.^9 The act also
contains requirements for property owner notification and property
valuation, as well as prohibitions against offers to property owners being
less than an approved appraisal value. In addition, the act addresses
compensation and seeks to ensure the fair and equitable treatment and
protection from disproportionate injury of persons displaced from their
homes, businesses, or farms in all projects involving federal financial
assistance. The act requires that certain relocation funding be provided
when a resident's property is acquired, such as reasonable out-of-pocket
moving expenses and relocation advisory services. The relocation funding
also includes payments to cover rent increases or downpayments on home
purchases in order to assist tenants and owners in relocating to
comparable housing, which, at a minimum, is decent, safe, and sanitary.

^7545 U.S. 469 (2005).

^8See Errol E. Meidinger, The "Public Uses" of Eminent Domain: History and
Policy, 11 Environmental Law 1 (Fall 1980) and Jennifer M. Klemetsrud, The
Use of Eminent Domain for Economic Development, 75 North Dakota Law Review
783 (1999).

^9Pub. L. No. 91-646, 84 Stat. 1894 (Jan. 2, 1971) codified at 42  U.S.C.
SS 4601, 4602, 4604, 4605, 4621 to 4633, 4635, 4636, 4638, 4651 to 4655.
For purposes of URA, federal financial assistance is defined as "a grant,
loan, or contribution provided by the United States, except any federal
guarantee or insurance, any interest reduction payment to an individual in
connection with the purchase and occupancy of a residence by that
individual, and any annual payment or capital loan to the District of
Columbia." 42 U.S.C. S 4601(4).

A number of federal government agencies have acquisition programs where
the federal government acquires title to the land through proceedings in
federal courts. However, this report focuses on land acquisitions by state
or local governments, or their designees.^10

States and Localities Used Eminent Domain for Various Purposes and to Varying
Degrees, but the Extent of Eminent Domain Use Is Unknown Due to Limited Data

Officials from national organizations, states, and cities with whom we
spoke cited various common public purposes for which eminent domain can be
or has been used, but the lack of data precludes a determination of the
extent to which eminent domain has been used across the nation. Purposes
for which we received examples include the building or expansion of roads
and other transportation-related projects; construction of state and
municipal facilities; and the elimination and prevention of blight. In
addition, officials from some of the national organizations we contacted,
which represent state and local governments, property rights groups, urban
planning, and home builders, also cited remediation of environmental
contamination and economic development. Although we were able to identify
some purposes for which eminent domain can be and has been used by certain
authorities, we were unable to determine the number of times and the
purposes for which eminent domain has been used across the nation because
of a lack of centralized or aggregate data.

^10In contrast to regulatory takings--in which government regulatory
actions affect private property use--eminent domain as described in this
report refers to direct takings of real property, where the legal title of
the property is transferred.

National Organizations, State Agencies, and City Officials Cited Various
Purposes for Using Eminent Domain

According to representatives from some national organizations representing
state and local governments, property rights groups, farmers, and planning
professionals, and state departments of transportation (DOT) and city
officials, eminent domain could be and has been used for various purposes.
In particular, many of these representatives and officials said that
eminent domain was sometimes needed for the completion of
transportation-related projects, such as the building or expansion of
roads and highways. As an example, according to Texas DOT officials, from
November 1996 through March 2005, the department invoked eminent domain to
acquire 6 of the 26 properties needed to assemble land for the
construction of an interchange that connected two major highways in
central Texas. These officials explained that most of these acquisitions
involved the taking of a small portion of the property (partial takings).
Furthermore, Texas DOT officials said that because they were making
improvements to existing highway facilities, the location of such
improvements was limited to properties adjacent to the highway.

In addition, Florida DOT officials told us that the department used
eminent domain in 1998 and 1999 to acquire 23 of 51 properties, most of
which were partial takings, needed to reconstruct and widen an existing
roadway from two to four lanes. City officials we contacted also provided
examples of transportation-related projects in which eminent domain was
used. For example, an official from a city in Texas told us that the city,
in collaboration with the city's transit authority, used eminent domain to
acquire 2 of the 9 commercial properties needed to assemble land for the
expansion of the city's light rail system in October 1998. According to
this official, the city's transit authority was seeking to extend its
existing light rail system to provide a low-cost and energy-efficient
means of mass transit for commuters.

Another purpose for which eminent domain can be or has been used is the
construction or maintenance of state and municipal infrastructure, such as
state and municipal buildings. For example, in January 2002, Los Angeles
used eminent domain to acquire 2 of the 7 properties needed to assemble
land for the construction of a public building that eventually
accommodated state and city departments of transportation. In addition,
officials from some of the national organizations we contacted said that
eminent domain is also used for public utilities. For example, New York
City used eminent domain to assemble land for the construction of a tunnel
for the city's water system. To complete one phase of the project, the
city used eminent domain to acquire 3 of the 10 properties needed to
construct support facilities for the operation and maintenance of the
water tunnel. Furthermore, the city condemned subsurface rights on more
than 1,100 properties for the construction of the Manhattan portion of the
tunnel and approximately 640 additional subsurface rights for the Brooklyn
and Queens portions. According to a New York City Department of
Environmental Protection report, the tunnel is expected to enhance and
improve the city's water system and allow for inspection and repair of the
city's existing tunnels.^11 In addition, an official from a county in
California provided information about the condemnation of 40 parcels of
property in June 2001 to assemble land for a flood control and protection
project, most of which were partial takings. According to this official,
the flood control and protection improvements were intended for public
safety and public infrastructure protection.

Eminent domain also can be and has been used to eliminate or prevent
blight. For example, according to an official from a community
redevelopment agency in Florida, the agency used eminent domain in March
1998 to acquire 3 of the 39 parcels needed to eliminate slum and blighted
conditions, stimulate private investment in the area, provide commercial
opportunities, and enhance the area's tax base. This agency official said
that the redevelopment of the area consists of commercial space and
residential housing and was the first significant private investment made
in the area in decades. In addition, New York City officials provided an
example in which the city condemned property through eminent domain to
eliminate blight. According to city officials, the city acquired 407
parcels to eliminate blight by constructing a major housing
development.^12 The city's plan for the project indicated that the project
was intended to accomplish several things, including providing new and
rehabilitated housing for low-, moderate-, and middle-income residents and
strengthening the tax base of the city by encouraging development.

Furthermore, officials of some national organizations representing state
and local governments, property rights groups, planners, and home builders
said that eminent domain can be used for brownfield remediation, which is
the environmental cleanup of property that is or may be contaminated.
According to officials from an organization representing local government
environmental professionals, oftentimes development of certain brownfield
properties only occurs with the use of eminent domain because of the
owners' unwillingness to transfer property or allow access for site
inspections for fear of later being held liable for clean-up costs.
Although the officials from the national organizations mentioned above
also cited brownfield remediation as a purpose for which eminent domain
could be used, we were unable to obtain sufficient project information to
conduct any further analysis or provide examples in this report.

^11New York City Department of Environmental Protection, New York City
2005 Drinking Water Supply and Quality Report (New York, N.Y.: 2005).

^12According to New York City officials, although the city already owned
190 of the 407 parcels, the city needed to begin eminent domain
proceedings to acquire all of the parcels to ensure that it was the sole
legal title holder on the property.

Finally, officials from some of the national organizations with whom we
met cited economic development as a purpose for which eminent domain can
be and has been used. However, according to an official from a national
organization representing city governments, the use of eminent domain
solely for economic development purposes is minimal compared with the use
of eminent domain for other purposes, such as transportation-related
projects. Officials from some authorities that have the power to use
eminent domain said that some of their projects might be linked to
economic development, but that economic development was not the primary
purpose of the projects. In addition, all of the projects we reviewed in
which eminent domain was used to eliminate blight were associated with
projects intended to improve the economic condition of the area. For
example, as we have previously described, the redevelopment agency in
Florida used eminent domain to acquire three parcels of property to
eliminate slum and blighted conditions by stimulating private investment
in the area, providing commercial opportunities, and enhancing the area's
tax base.

Officials from an organization representing state legislatures said that
economic development is closely related to blight removal because
authorities with eminent domain power may claim that blight removal will
stimulate the community's economic conditions. In addition,
representatives from some national organizations representing state and
local governments, planning professionals, and officials from some cities
we visited said that transportation-related projects might lead to an
area's economic development. For example, New York City officials said
that even acquisitions of property by eminent domain that are not
primarily intended for economic development, such as the construction of a
road or highway, would likely improve the economic condition in the area
because of the improved access to businesses in the area, potentially
increasing the profitability of the businesses. City officials from
Chicago and Los Angeles told us that the construction of state buildings
in their downtowns had positive economic impact on their cities because
the projects attracted private development. Finally, an official from
Denver Urban Renewal Authority described the Authority's use of eminent
domain to assist a developer complete refurbishing of a downtown property
of architectural and historical significance, thus preventing the property
from becoming vacant and potentially having a negative impact on its
surrounding area.

We also obtained data on the use of eminent domain from selected state
DOTs and local authorities.^13 The data reflect that the amount of eminent
domain activity and purposes for which eminent domain was invoked varied
by states and localities. Officials from 9 state DOTs we contacted
estimated that the number of individual properties they used eminent
domain to acquire in the last 5 years for transportation-related projects
ranged from approximately 200 to 7,800.^14 As we previously discussed,
according to the state DOT officials, because most of their projects
involve improvements on existing transportation systems, the majority of
the private properties they assembled for the projects consisted of
partial acquisitions.^15 In addition, according to information provided by
Baltimore and Los Angeles city officials, Baltimore invoked its eminent
domain power most commonly to assemble land for urban redevelopment
projects that involved blight removal, while Los Angeles invoked its
eminent domain power most often for street improvements projects.
Similarly, according to New York City officials, the city invoked its
eminent domain power most commonly to assemble land for parks and street
widening. Officials from Chicago and Denver told us that they do not have
complete data on the number and purposes for which they used their eminent
domain authority, but provided us with some information on their use of
eminent domain. Specifically, City of Chicago officials estimated that
they acquired 2,000 parcels through eminent domain in the last 10 years.
In addition, officials from Denver told us that the city used its eminent
domain authority mostly for street improvement projects.

^13According to Federal Highway Administration (FHWA) officials, state
DOTs have been collecting and reporting to FHWA some data related to the
use of eminent domain since 1991.

^14The numbers include instances in which state DOTs used eminent domain
to acquire entire and portions of properties. The variation in the range
of the number of times eminent domain was used by the state DOTs we
contacted may reflect differences in state law granting state DOTs eminent
domain authority, the geographic size of the state, and traffic conditions
within the state, among other factors.

^15State DOT officials also referred to these instances as "partial
takings" or "strip takings."

No Aggregate Data Exist on the Number of Instances and Purposes for which
Eminent Domain Was Used

The lack of state or national data precluded objective statewide or
national assessments on the use of eminent domain, including (1) how
frequently eminent domain is used, (2) how often private-to-public or
private-to-private transfer of property occurs, or (3) the purposes for
which eminent domain has been used by state and local governments.^16
Although we were able to collect limited data on the purposes and number
of instances in which eminent domain was used, officials from some of the
national organizations we contacted told us that state or national
aggregate data on the use of eminent domain do not exist. At least two
major factors account for the lack of aggregate data. First, officials
from the U.S. Departments of Transportation and Housing and Urban
Development, as well as the Environmental Protection Agency, told us that
the federal agencies generally do not acquire private property through
eminent domain directly, but may be indirectly involved through the
different programs or agencies they administer or fund. Furthermore,
officials from these Federal agencies told us that they do not formally
track whether program participants use eminent domain.

Second, the lack of state data on the use of eminent domain may result
from multiple authorities in a state having the power to invoke eminent
domain and states not having central repositories to collect such data. As
we have previously discussed, since states grant eminent domain
authorities to local governments, which may further delegate this
authority to a designee, such as a development authority, many entities
have the power to invoke eminent domain. Of the 10 state legislative
research offices we contacted, 5 provided us with information on the
authorities that have eminent domain power within their states.^17 For
instance, according to information provided by the Virginia legislative
research office, at least 40 different types of authorities can invoke
eminent domain, including school board districts that can use it to
acquire any property necessary for public school purposes. The legislative
research office of Massachusetts listed 8 different types of authorities
with eminent domain power. For example, the Armory Commission can use
eminent domain to acquire land suitable for target practice ranges for the
armed forces of Massachusetts, subject to the governor's approval.^18 In
addition to the 8 authorities, the information provided by the
Massachusetts legislative research office states that Massachusetts'
general statutes also grant the power to, among others, the governor and
state council, county commissioners, and city aldermen. Furthermore,
according to a Texas Legislative Council report, at least 90 different
types of authorities have been granted the power of eminent domain in
Texas, including agricultural development districts, railroad companies,
and sports facilities districts.^19 Finally, the legislative research
offices of Illinois and Washington provided us with information on
statutes that described the authorities that were granted eminent domain
power. In particular, in Illinois, at least 168 types of authorities,
including those dealing with transportation, such as the Chicago Transit
Authority and the Kankakee River Valley Area Airport Authority, have the
power to acquire property through eminent domain, and, in Washington, at
least 78 types of authorities were granted this power.

^16We attempted to collect information about the use of eminent domain
from multiple sources, such as national organizations and cities that have
used eminent domain; however, we were unable to collect a significant
amount of information on the use of eminent domain. See appendix I for
more information on the methodology used to collect such information.

^17Although multiple authorities within a state have the power of eminent
domain, some may not have occasion to exercise this power.

Although Many Laws Govern Land Acquisition, Including Eminent Domain Use, Common
Practices Exist Nationwide

Public authorities at the state and local levels acquire property,
including by eminent domain, through processes set forth in various
federal, state, and local land acquisition laws and implementing
regulations. Federal and state laws, such as the URA, outline how much
compensation authorities need to pay property owners whose land is being
acquired and also direct authorities on what type of relocation assistance
to provide to residents and businesses. However, local and state officials
we met expressed some concerns about certain limits that the URA places on
the amount and type of relocation payments to displaced residents and
businesses. In addition to local laws and regulations, federal and state
laws establish procedures for how authorities must undertake land
acquisition, including the use of eminent domain. Although multiple laws
address land acquisition, authorities we interviewed follow broadly
similar steps. When acquiring land, which may involve the use of eminent
domain, authorities generally follow a four-step process: (1) project
planning; (2) property valuation; (3) property acquisition; and (4)
relocation of displaced property owners, residents, and businesses.
Sometimes these steps overlap.

^18Mass Gen. Laws ch. 33, S 126.

^19Texas Legislative Council, Fact at a Glance: Texas Statutes Granting,
Prohibiting, or Restricting the Power of Eminent Domain (Austin, TX,
2006).

Federal and State Governments Set Compensation and Relocation Benefits, but
Concerns Exist That Some Payment Limits Are Too Low

Land acquisition laws generally require compensation be paid to the owner
of a property that a public authority has acquired, including acquisitions
by eminent domain. All 50 state constitutions require that just or fair
compensation be paid to those whose property has been taken through
eminent domain.^20 Just compensation is a payment by the government for
property it has taken under eminent domain, usually the fair market value,
so that the owner theoretically is no worse off after the taking.^21 As
mentioned earlier, the United States Constitution stipulates that eminent
domain use by a government authority must include just compensation to the
property owner. Some state constitutions, including Georgia and Montana,
provide for payment of expenses above the fair market value of the
property such as, in certain circumstances, attorney's fees or litigation
expenses incurred in determining adequate compensation.

The land acquisition process often includes relocation of either the
property owner or residents and businesses located in the property
acquired by the authority; federal and state laws also address the costs
involved in relocation. Requirements in the URA, the federal law governing
the provision of relocation benefits to displaced parties, are applicable
to all acquisitions--including voluntary acquisitions achieved through
negotiated settlements and acquisitions through eminent domain--of real
property for federal or federally assisted programs or projects. The URA
provides benefits to displaced individuals, families, businesses, and
nonprofit organizations. The types of benefits provided depend on factors
such as ownership, tenancy, and use of property (commercial versus
residential use). Local officials told us that they have provided benefits
under the URA such as: actual moving costs for residents and businesses;
comparable replacement housing; rental assistance for tenants; cost of
personal property loss for businesses; expenses in finding a replacement
site for businesses; and reestablishment costs for businesses up to
$10,000.^22 In addition, some city and state officials with whom we spoke
explained that their states have adopted legislation or policies with
requirements similar to the URA, providing some or all of the same
benefits to residents and owners displaced through nonfederally funded
projects.^23

20The requirement in the Kansas Constitution for full compensation applies
to corporations. However, Kansas courts have applied the federal
constitutional requirement that just compensation be paid when private
property is taken for public use by way of the Fourteenth Amendment's Due
Process Clause. See Lone Star Industries, Inc. v. Sec. of Kansas Dept. of
Transp., 671 P.2d 511, 514-515 (Kan. 1983). Further, these requirements
have been codified in Kansas statutory law. Id. (citing K.S.A. 26-513(a)).
New Hampshire's Constitution does not expressly mention compensation, but
just compensation is nevertheless required. Thomas Tool Services, Inc. v.
Town of Croydon, 761 A.2d 439, 441 (N.H. 2000) (citing Burrows v. City of
Keene, 432 A.2d 15, 18 (N.H. 1981)). The North Carolina Constitution does
not expressly prohibit taking private property for public use without just
compensation, but its courts have inferred such a prohibition as a
fundamental right integral to the "law of the land" clause that is in its
constitution. Finch v. City of Durham, 384 S.E.2d 8, 14 (N.C. 1989)
(citing Long v. City of Charlotte, 293 S.E.2d 101, 107-108 (N.C. 1982)).

^21This is also generally termed adequate compensation, due compensation,
or land damages. Black's Law Dictionary (8th ed. 2004).

However, local officials, and redevelopment agency officials from four of
the five cities we visited believed that payment amounts allowable under
the URA might not be adequate to cover costs. For example, we were told
that a $10,000 cap on reestablishment costs for business relocation,
unchanged since 1987, was too low.^24 Most officials noted that
reestablishments costs exceed this cap. For example, Chicago officials
described high reestablishment costs such as, replacing specialized
fixtures, licensing and permitting, and differential payments for
increased rent, insurance, and other needs. Furthermore, a Los Angeles
city official noted that the URA requires lump sum payments to remain
under a $20,000 cap.^25 Los Angeles officials use these settlements
frequently, but one official stated that the URA cap was too low.

Officials from 6 of the 10 state DOTs that we contacted remarked that
various benefit limits in the URA are too low to properly compensate for
business reestablishment costs. According to the U.S. Department of
Transportation, the agency responsible for issuing regulations to
implement the URA, the agency's Federal Highway Administration (FHWA) has
received comments about the inadequacy of business reestablishment
payments under the URA from states, other federal agencies, and affected
businesses.^26 In response to these comments, FHWA undertook multiple
activities to identify needed programmatic change in the URA, according to
FHWA officials. In particular, in 2002 FHWA conducted a study to assess
the adequacy of current URA provisions for business relocations and found
that reestablishment payments were largely considered inadequate.^27 In
2005 FHWA made some revisions to the URA regulations, but the revisions
did not raise the cap on reestablishment payments.^28 Such an increase
requires a statutory change.^29

22Some authorities provide businesses with lump sum payments in lieu of
those listed for all costs incurred from displacement.

^23According to FHWA officials, while the URA provides for limits on
certain relocation expenditures that are eligible for reimbursement when
federal financial assistance is involved, states may be eligible for
additional federal reimbursement in excess of amounts required by the URA
for certain types of transportation projects.

^24The URA permits payment for (1) actual reasonable expenses for moving,
(2) actual direct losses of tangible personal property as a result of
moving or discontinuing a business up to a reasonable amount that would
have been required to relocate, (3) actual reasonable expenses in looking
for a replacement business, and (4) actual reasonable expenses necessary
to reestablish a business at a new site. 42 U.S.C. S 4622(a). However, the
amount permitted to be paid for reestablishment is limited to $10,000. 42
U.S.C. S 4622(a)(4).

^25The URA permits business and farm operations eligible for relocation
benefits to elect a lump sum payment in lieu of the payments based on
their actual reasonable expenses (see prior footnote). However, this
payment cannot be more than $20,000. 42 U.S.C. S 4622(c).

State and Local Laws Further Direct Authorities on How to Acquire Land,
Including Eminent Domain Use

State and local laws further condition how land may be acquired, including
through eminent domain (see fig. 1). Among the states that we reviewed,
some states enacted additional laws concerning land acquisition, such as
requirements for environmental assessments. For instance, according to
City of Los Angeles officials, the California Environmental Quality Act
requires that the environmental impacts of discretionary projects proposed
to be carried out by public agencies, including in general publicly funded
projects in the state involving land acquisition, be assessed at the
earliest possible time in the environmental review process.^30 In New
York, according to city officials, when a significant adverse
environmental impact is likely to result from a project, the State
Environmental Quality Review Act requires an assessment in the form of an
environmental impact statement of short and long term impacts, adverse
environmental impacts, and mitigation measures.^31 In addition, according
to officials, residential and business displacement from a project is
generally analyzed in the review conducted under New York State and New
York City law.

^26The URA designates the U.S. Department of Transportation as the lead
agency, which is responsible for developing, publishing and issuing
regulations implementing the URA. 42 U.S.C. S 4601(12) and 4633. The U.S.
Department of Housing and Urban Development and other federal agencies
funding relocation and acquisition actions actively participate in this
process. 42 U.S.C. S 4633(a)(1).

^27U.S. Department of Transportation, FHWA, Office of Real Estate
Services, National Business Relocation Study, April 2002, Report No.
FHWA-EP-02-030. According to FHWA officials, FHWA held two national
symposia on the URA, conducted research projects, including reviews of
similar laws in other countries, and held public listening sessions on
regulatory and statutory reform in addition to the 2002 study.

^2870 Fed. Reg. 590 (Jan. 4, 2005). According to FHWA officials, one
revision included re-categorizing several eligible expenses that
previously counted towards the reestablishment limit set in the URA. This
regulatory change, according to FHWA officials, addressed some of the
concerns with the reestablishment limits by allowing additional actual,
reasonable and necessary costs to be eligible for reimbursement.

^2942 U.S.C. S 4622(a)(4) and (c).

^30Cal. Pub. Res. Code div. 13.

Figure 1: Federal, State, and Local Laws Condition the Use of Eminent
Domain

Some states have laws outlining how authorities granted eminent domain
authority within their state can invoke this power to assemble land for
public projects. For example, in Illinois, Article VII of the Code of
Civil Procedure sets forth procedures for use of the power of eminent
domain by state and local governments including provisions regarding the
determination of property value, negotiation with property owners, and the
initiation of condemnation.^32 Provisions in the Illinois Municipal Code
authorize municipalities to take property for redevelopment based on a
blight designation.^33 In New York, the Eminent Domain Procedure Law sets
forth the procedure by which property is acquired and property owners are
compensated.^34 This law also establishes the opportunity for public
participation in the planning of redevelopment projects, which may
necessitate eminent domain use. Through these procedures, the state
acknowledges that the need for public land acquisition should be balanced
against the rights of private property owners and local communities,
encourages the settlement of claims for compensation, and reduces related
litigation. California's Eminent Domain and Relocation Assistance Laws
implemented by the Relocation Assistance and Real Property Acquisition
Guidelines governs private property acquisition by a public authority not
involving federal funds.^35 The guidelines are designed to ensure
equitable treatment for persons displaced from a home or business, reduce
related litigation, and require comparable replacement dwellings.^36 The
Colorado Urban Renewal and Eminent Domain Laws contain procedures for
using eminent domain to eliminate or prevent blight or slum conditions.^37
To govern the relocation of displaced residents, Maryland, New York, and
Washington, like California, have established laws that provide certain
state relocation benefits.^38 Therefore, a mixture of federal and state
laws directs how local authorities use their eminent domain power, provide
compensation, and other required benefits.

^31N.Y. Envtl. Conserv. Law ch. 43-B, art. 8.

^32See, for example, 735 Ill. Comp. Stat. 5/7-102.1, 5/7-104, and 5/7-121.

^3365 Ill. Comp. Stat. 5/11-11-1.

^34N.Y. Em. Dom. Proc. Law SS 101, 104 and 501.

In addition to the federal and state laws that authorities must follow
when invoking eminent domain, some of the cities that we visited had
additional local laws or city agency regulations that governed urban
redevelopment, as well as relocation of displaced residents and businesses
(see fig. 1). For example, in New York City, the Uniform Land Use Review
Procedure Charter, approved in 1975, standardizes how applications
affecting land use in New York City, including projects involving eminent
domain, are publicly reviewed.^39 Another law sets forth the rights of
residential and commercial tenants displaced by urban redevelopment in New
York City.^40 The Los Angeles redevelopment agency has also established an
appeals procedure for relocation decisions which is supplementary to
federal and state law, according to information provided by Los Angeles
city officials.

^35Cal. Civ. Proc. Code pt. 3, tit. 7; Cal. Gov't. Code S 7260 et seq.;
and Cal. Code Regs. tit. 25, S 6000 et seq. The guidelines expressly
recognize the priority of federal law and that California law only applies
when the federal rules are not imposed. Cal. Code Regs. tit. 25, S 6018.

^36Cal. Code Regs. tit. 25, S 6002.

^37Colo. Rev. Stat. S 31-25-101 et seq. (urban renewal) and Colo. Rev.
Stat. 38-1-101 et seq. (eminent domain).

^38See, for example, Md. Code Ann., Real Property S 12-206; N.Y. Gen. Mun.
Law S 74-b; and Wash. Rev. Code S 8.26.065.

^39New York City Charter S 197-c.

^4028 RCNY S 18-04.

Authorities Follow Several Similar Steps in Projects that Can Involve Eminent
Domain

The complexities associated with land assembly have led to numerous
approaches for acquiring land and providing just compensation. However,
when state and local authorities acquire land, either through negotiated
purchase or eminent domain, they follow some common procedural practices.
The land acquisition process generally occurs in four stages, including
(1) project planning; (2) property valuation, during which appraisals are
conducted; (3) property acquisition; and (4) relocation, during which
authorities may provide residents and businesses replacement housing or
commercial property (see fig. 2). Sometimes these stages are concurrent,
with some variation across the localities we visited. The views that
property owners and property rights organizations we interviewed have on
these stages are discussed in a later section of this report.

Figure 2: Common Real Estate Acquisition Stages in Visited Localities

  Project Planning Stage

The project planning stage may begin by identifying the need for a
project. Depending on the type of project, city departments of engineering
or planning, city redevelopment or renewal authorities, or state
departments of transportation with whom we spoke, conduct work at this
stage. For example, 23 U.S.C. S 135 (section 135), as amended by the Safe,
Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for
Users, mandates that states carry out a statewide transportation planning
process that involves both a long-range statewide transportation plan,
which identifies transportation needs over roughly a 20-year horizon, and
a Statewide Transportation Improvement Program (STIP), which is a listing
of potential projects to be constructed in the near term, covering a
4-year period.^41

FHWA and the Federal Transit Administration jointly administer the
statewide planning program. During these planning processes, according to
FHWA officials, state DOTs work with other state agencies and local
authorities within a cooperative, continuous, and comprehensive framework
to make decisions on the need for new state highways or interchanges,
among other transportation-related public improvements. Section 135
requires public notice during the planning process, which for the
long-term plan includes public meetings at convenient and accessible
locations at convenient times, use of visualization techniques to describe
plans, and provision of public information in an electronically accessible
format, such as the Internet.^42 The STIP also requires states to provide
interested parties with a reasonable opportunity to comment on the
proposed program.^43 According to state DOT officials in New York, project
managers will attend local board or council meetings before a design for a
new transportation project is proposed. After the project proposal, New
York officials hold informational meetings for property owners and allow
time for individual question and answer sessions. New York officials
consider alternative site selections proposed by the property owners,
although the state DOT eventually selects the least intrusive and safest
alternative by weighing social, economic, safety, and technical
considerations. Other states that we contacted, including Missouri,
Illinois, California, Colorado, and Texas, also described their adherence
to the federal requirements in conducting their statewide transportation
improvement plans and providing public notice of the project design
process.

^41Pub. L. No. 109-59, S 6001(a),119 Stat. 1144, 1851 (Aug. 10, 2005).

^4223 U.S.C. S 135(f)(3).

^4323 U.S.C. S 135(g)(3).

In cities or localities, the project planning stage may generally involve
developing, publicly vetting, and approving a project plan by a public
body, such as a city council. Redevelopment where eminent domain may be
used in the five cities we visited may involve the creation and approval
of an urban renewal or redevelopment plan, which establishes such things
as the need for the project, lists the parcels required to complete the
project, and creates a timeline. In some localities, such planning
processes may involve the completion of impact studies of the potential
effects from the proposed redevelopment project on the neighborhood and
the environment. Multiple public hearings or meetings may occur when
localities are vetting a redevelopment plan. Chicago officials told us
that the public may attend hearings or meetings held by the city's
planning department, city council, and an appointed body known as the
Community Development Commission, at which redevelopment plans and takings
are approved. In addition, local alderman may also sponsor public meetings
on proposed redevelopment plans. In New York City, the Uniform Land Use
Procedure Law provides for review before four city entities: the local
community board, borough president, city planning commission, and the city
council. Property owners and the community, in New York, Chicago and in
other localities, are notified about hearings through letters sent to
their mailing addresses.

This planning process often ends with the approval of a project plan by a
public body. In all five cities we visited, officials told us that the
city council approves the redevelopment or urban renewal plan, at times
granting the appropriate public authority the specific power to acquire
properties necessary to complete the project. Sometimes the development of
these plans involves organizations outside the local or state government,
such as community groups or developers. Officials from some of the cities
we visited explained that the city may work with the developer by
exercising its power of eminent domain to complete the site assemblage
necessary for a developer's project. This collaboration typically occurs
after the developer has acquired as many parcels in a redevelopment site
as it can through private market transactions.

During project planning, city authorities often may have to demonstrate
blight or slum conditions in the area slated for redevelopment. States
allowing the use of eminent domain for blight removal generally establish
criteria to determine blight. These criteria may consider conditions of
blight that impose a physical or economic burden on a community. Examples
of physical blight in some state laws include buildings in which it is
unsafe or unhealthy for persons to live or work. Indications of physical
blight may include building code violations, structural dilapidation and
deterioration, defective building design or physical construction, or
faulty or inadequate utilities. Blight also may include neighboring or
nearby property uses that are incompatible with one another and prevent
the economic development of the respective parcels, such as the existence
of irregularly sized lots. Depreciated or stagnant property values, high
vacancy or turnover rates of commercial property, or increased abandonment
of buildings and lots can be indications of economic blight, as can high
crime rates or residential overcrowding.

While state laws often determine blight factors, authorities may have some
latitude in applying them to properties and areas. The City of Chicago,
following Illinois law, must apply a 13-factor test to determine blight
for a redevelopment project area. To classify an entire area, such as a
city block, as blighted, five or more of the factors must be clearly
present and reasonably distributed throughout a project area. City
officials explained that this standard means that at least a third to one
half of the properties in a designated area meet at least 5 of the 13
blight factors. Officials in Los Angeles informed us that in order to
adopt a redevelopment plan an area must generally be characterized by one
condition of physical blight and one condition of economic blight.
According to officials at the Denver Urban Renewal Authority, in order to
undertake any redevelopment project, a blight designation must precede any
redevelopment action. In addition, the officials explained to us that
early in the project development stage, the authority conducts a study,
pursuant to Colorado state statute, to determine that a minimum of 4 of
the 11 blight characteristics in state law are present in the designated
area. These criteria include unsanitary or unsafe conditions, deteriorated
or deteriorating structures, environmental contamination, and the
existence of conditions that endanger life or property.

  Property Valuation Stage

The property valuation stage may involve title studies and property
appraisals that city, state, or contract appraisers often conduct. Several
state and city officials with whom we met or spoke described the need to
conduct title studies to determine legal ownership of a property and
ascertain any lien holders. To determine the fair market value of the
property, which is generally the amount of the first offer made by public
authorities, city officials described using an independent, certified
appraiser. According to officials in New York City, fair market value is
determined by valuing the highest and best use of the property on the date
of acquisition. In Los Angeles, city officials explained that state law
defines fair market value as the highest price that a willing buyer and
willing seller would agree to, neither being compelled to buy or sell and
each having full knowledge of all of the uses, and restrictions on use, to
which the property may be put.^44 In other words, officials from the Los
Angeles authority are required to pay owners not less than the amount for
which their property would sell privately on the open market if it were
unaffected by a possible eminent domain action. Massachusetts Highway
Department officials described having all appraisals exceeding $175,000 in
value reviewed by a real estate review board appointed by the state's
transportation commissioner for accuracy and then submitted for final
approval to the transportation commissioner. Some transportation authority
officials also described using in-house appraisers at their agencies.
During this stage, owners also may obtain appraisals of the fair market
value on their property, although sometimes at their own expense.

  Property Acquisition Stage

The property acquisition stage may involve a formal offer, negotiation by
the city, state, or redevelopment authority officials, and at times, an
impasse leading to an eminent domain filing by an authority's legal
counsel. Multiple authority officials described using eminent domain after
many attempts at a negotiated settlement had been unsuccessful. If the
owner does not agree with an authority's initial offer, then some
authorities may provide additional offers above the appraised value. In
some localities, this sort of negotiation involves the owner identifying
special circumstances that justify a higher level of compensation. Denver
authorities told us that their initial offer to purchase is typically
based on an appraisal. Any settlement that can be reached at the midpoint
between the city's appraisal and the property owner's appraisal when the
latter is higher is considered an appropriate settlement. The Denver
official stated that it is the city's practice to pay more than the fair
market value on the property to compensate for inconvenience or intangible
difficulties caused by condemnation. When seeking a negotiated settlement,
the authorities we contacted had different limits on the percentage amount
over the appraised value that they could offer prior to invoking their
power of eminent domain. For example, the Community Redevelopment Agency
of Los Angeles cannot make an offer of over 120 percent of the appraised
value of the property without agency board approval. A higher offer by the
redevelopment agency may be considered a gift of public funds, which the
agency, by law, cannot make, according to officials. In New York City,
based on agency protocols, the Department of Citywide Administrative
Services may pay no more than 110 percent of the original appraisal prior
to the use of eminent domain. Similarly, the city's Department of Housing
Preservation and Development has established rules to pay no more than 120
percent of the original appraisal prior to the use of eminent domain. In
Chicago, a city official estimated that within 1 year, 75 percent of
owners settle at an amount between 100 and 150 percent of the original
offer.

^44Cal. Civ. Proc. Code S 1263.320(a).

Once authorities are certain that the owner will not settle or that the
legal owner cannot be located, they may file to condemn the property with
eminent domain in the appropriate court.^45 However, the manner in which
authorities can invoke eminent domain differs. For example, two state DOTs
we contacted have established policies to invoke eminent domain for each
acquisition undertaken, including acquisitions involving willing sellers,
to ensure that the authority is the sole legal title holder on the
property. Multiple cities and state departments of transportation told us
they also had the statutory authority to use a procedure known as
"quick-take," which refers to the ability to petition a court for
immediate vesting of a property's title. If the petition is granted, the
court transfers the property to the authority and the final compensation
is determined at a later date. The authority must deposit the estimated
compensation with the court, which owners may withdraw without
relinquishing their ability to argue for more compensation. Local
officials have noted that for most eminent domain filings, the authority
and the owner come to a settlement without the need for a trial. For
instance, officials from three authorities we contacted estimated that 90
percent of all eminent domain filings were settled prior to trial.

Although few eminent domain cases go to jury trial, authority officials
stated that eminent domain is the most effective tool they have to acquire
needed property from owners who hold out for a higher purchase price or
refuse to sell. Officials in one city explained that they also use eminent
domain to void leases on property while other officials explained that
they use it to obtain abandoned property when no owner can be located. For
example, city officials with whom we spoke stated that eminent domain is
needed to acquire properties from owners that purchase and hold on to
property after an area is slated for redevelopment. Officials stated that
they generally believe these owners are speculating that land values will
increase because of the expected public investment in the redevelopment
project.

^45Prior to an authority filing in court to condemn a property, owners may
have negotiated with authorities under the threat of eminent domain. Once
the authority files to condemn a property through eminent domain, the
threat of eminent domain becomes the actual use of the tool. Nevertheless,
owners and authorities may still continue to negotiate.

  Relocation Stage

The relocation stage may involve outreach by the condemning authority and
the provision of relocation benefits by agency or contracted relocation
specialists to displaced residential or commercial owners or tenants. For
instance, New York City defines displaced party as any family, individual,
partnership, corporation, or association that is displaced or moves from
real property, or who moved his or her personal property from such real
property, on or after the date of acquisition of the real property for a
public improvement or urban renewal site or project.^46 The URA's
definition of a "displaced person" covers anyone who moves because they
received a written notice that a program or project undertaken by a
federal agency or with federal financial assistance intends to acquire his
or her property (including a rental property).^47 Some authorities, such
as the cities of Los Angeles and Chicago, have dedicated offices within
the condemning agency to manage the provision of relocation benefits.
Other localities, including New York City, sometimes contract out this
responsibility to private relocation firms, for example when undertaking
larger projects involving multiple displaced parties.

Multiple relocation specialists with whom we spoke, whether they were
authority officials or contracted specialists, reported contacting the
property owner as soon as the public entity received the authority to take
the owner's specific property or soon thereafter and providing relocation
support for the duration of the settlement or condemnation. For example,
Chicago officials told us that within five days of the city's first offer
letter, relocation specialists will contact the property owner and tenant
to set-up a face-to-face interview to determine their needs. Relocation
specialists may meet with displaced residents at numerous steps of the
land acquisition process. They may explain the residents' rights,
benefits, and obligations and may interpret legal notices received from
the authority. According to some relocation specialists, residential
tenants and owners are to be relocated to comparable replacement housing
that is decent, safe, sanitary, and functionally equivalent to the
displaced dwelling. Relocation specialists from two localities described
making every effort to house residents in neighborhoods of their choice,
including their current neighborhood if possible, and finding rental
housing for residents who were renters. City officials from four of five
cities we visited showed us new residential apartment buildings, one of
which included services, such as child care and computer centers, into
which they moved displaced residents.

^4628 RCNY 18-04(b).

^4742 U.S.C. S 4601(6)(A).

For business occupants, relocation specialists may conduct comprehensive
analyses of the business' location requirements, fixtures, moving costs,
and other relevant considerations to find a comparable site for business
relocation. In one city we were told that relocation specialists work with
the business owners to address all commercial issues, including
negotiating all comparable square footage costs and rent and getting the
same phone number transferred to a new location. Some relocation
specialists are associated with local retail and office landlords and
attempt to negotiate a price which, combined with relocation funding under
the URA, initially can keep the rental costs similar to the previous
location. According to all of the relocation specialists who we
interviewed, relocated commercial occupants generally have done better
financially in other, more economically stable neighborhoods.

Relocation benefits under the URA and many local and state laws include
some or all of the following payments to residential and commercial
tenants:

           o Actual moving expenses, which may include packing and moving
           expenses, storage of personal property, the cost of dismantling,
           disconnecting, and reconnecting machinery and utilities, loss of
           personal property caused by the move, the expense of searching for
           a substitute business site, moving insurance, advertising related
           to the move, or other related expenses (or a fixed moving
           allowance in some locations);

           o Compensation over the acquisition cost of the property for an
           owner to purchase a comparable replacement home, pay increased
           mortgage costs, or pay closing costs;^48

           o For tenants, a monthly rental subsidy to rent a comparable
           dwelling for a period of 42 months that is equal to the
           differential between what the tenant was paying at the displaced
           dwelling and the payment at the comparable dwelling (many
           localities also allow this payment to be made in a lump sum so
           that renters may use it as a down payment to purchase a home); and

           o A payment in lieu of moving and related expenses in
           nonresidential moves, which may be made to a commercial owner when
           relocation would result in substantial loss of business.
			  
			  Use of Eminent Domain Generates Benefits and Costs Affecting a
			  Wide Array of Community Interests and Individuals

           For selected projects where eminent domain was used that we
           reviewed or visited, authorities described the previous conditions
           of the selected areas and they told us or we observed some of the
           benefits realized by communities after the projects were
           completed. Examples of benefits to the community included
           increased job opportunities and modernized or safer
           infrastructure. Property rights groups told us about the negative
           effects that the use of eminent domain could have on property
           owners, community residents, and businesses, such as the loss of
           small businesses or the dispersal of residents who relied upon
           each other in informal networks. In addition to the losses to the
           community, the property rights groups noted that the manner in
           which authorities implement procedures for using eminent domain
           also affects property owners. For example, national and local
           property rights groups identified problems with how some
           authorities communicate with property owners, designate areas as
           blighted, and value property.

           The use of eminent domain generates benefits and costs that could
           affect various parties--such as property owners, businesses,
           authorities, and city officials--whose interests may diverge. The
           great variety in benefits and costs makes it difficult to
           establish objective measures to examine the overall impact of
           projects involving eminent domain. In addition, the lack of
           aggregated data on the purpose and frequency of eminent domain use
           further limits this effort. However, for selected projects where
           eminent domain was used that we reviewed or visited, authorities
           described the previous conditions of the selected areas and they
           told us, or in some instances we observed, some of the benefits
           realized by communities after the projects were completed.

           Prior to condemnation, according to local and state officials, a
           variety of conditions existed in selected areas in which eminent
           domain was used. For example, according to city officials, some of
           the urban areas slated for redevelopment included buildings in
           substandard condition. Many buildings were vacant or abandoned
           with few or no improvements made for multiple years; some
           properties had missing window glass, collapsed roofs, accumulated
           debris on the parcel, and other conditions that created a public
           health hazard. However, in some cases that we reviewed,
           authorities acquired occupied residences and operating businesses
           to redevelop an area. In one area, a building occupied by
           long-standing businesses providing retail services to the
           neighborhood was under threat of condemnation by eminent domain.
           Although this building was not unusually dilapidated, it was
           within a redevelopment area designated as blighted, and thus
           subject to acquisition by eminent domain.

           According to local and state officials, road conditions in some
           projects reviewed included inadequately sized or dilapidated
           streets, sidewalks, or curbs. Traffic flow and access in some
           neighborhoods were poorly planned. For example, industrial traffic
           reportedly moved through residential areas in one project we
           reviewed. In other road or highway projects, according to state
           transportation officials, conditions included operable, but older
           roads requiring modernization, such as new interchanges to better
           handle traffic. Other roads required new safety features, such as
           turning or deceleration lanes, or straightening of tight curves in
           the road. We also reviewed other types of infrastructure projects,
           such as the New York City water tunnel previously discussed.
           According to city officials, the condition of the original water
           tunnels servicing the metropolitan area was questionable because
           they had not been inspected since being built in the early
           twentieth century.
			  
			  Characteristics of Selected Redeveloped Areas Varied, with Local
			  and State Officials Often Reporting Resulting Community Benefits

           Condemned property is often redeveloped as part of a larger
           redevelopment or improvement project. City officials considered
           outcomes of these projects as benefits to the community, and
           emphasized that they could not have completed the projects without
           the use of eminent domain. However, authorities told us they often
           obtain much of the land for projects, including urban
           redevelopment projects, transportation projects, utility projects
           and others, through negotiated purchases and condemn a small
           number of the needed properties. Therefore, benefits to the
           community cannot be attributed solely to the use of eminent domain
           and are more likely the result of the redevelopment projects for
           which eminent domain was used.

           According to local and state officials and based on some of the
           projects we observed, the redeveloped areas have a variety of
           characteristics. In urban areas, redevelopment led to additional
           housing stock (including affordable housing set asides), new
           commercial centers with additional local job opportunities,
           reduced crime in some areas, and modernized infrastructure. For
           example, in Chicago, the downtown redevelopment of a sparsely
           occupied block produced a 27-story municipal building, which city
           officials described as fully leased with retail stores and office
           space, including a parking garage and a mass transit station
           serving many parts of the city, including both airports. In New
           York City, the Department of Housing Preservation and Development
           used eminent domain to assemble land for the Melrose Commons
           project in the South Bronx. The agency is working with several
           private and nonprofit developers to construct over 3,200
           affordable housing units to turn what a high-level official
           characterized as one of the most blighted areas in the city into a
           thriving neighborhood.

           Officials cited benefits from transportation projects that include
           safer, more efficient roadways and traffic patterns. In Los
           Angeles, the widening of a street from two lanes to four lanes
           with center left turn lanes alleviated what officials described as
           perennial congestion, provided additional parking, and reduced
           accidents on a major artery in the western part of the city.
           Additional improvements resulting from this project included new
           curbs, gutters, street lighting, traffic signals, sewers, and
           storm drains.

           City officials cited other types of improvements resulting from
           redevelopment, such as less contaminated land and new public green
           space or parks. According to Baltimore officials, sometimes vacant
           lots are acquired and provided to community groups for gardens.
           New York City officials explained that eminent domain could be an
           important tool to acquire brownfields in the city for remediation,
           although authorities there have yet to do so. Much of the 581
           miles of waterfront in New York City has been contaminated in the
           past. According to officials, many developers are not interested
           in developing contaminated waterfront properties because they do
           not want to be liable for cleaning up the contamination. Property
           owners also may be unable or unwilling to sell properties that are
           or may be contaminated; thus, the city could acquire the
           properties through eminent domain, decontaminate them, and put the
           land to public use.
			  
			  Property Owners and Groups Representing Them Reported Negative
			  Effects on Communities from Eminent Domain Use

           Property owners, property rights groups, and national
           community-based organizations described a number of negative
           effects from using eminent domain. For example, properties
           acquired through eminent domain may remain unused for some time,
           according to city officials and a property rights group. As an
           example, in downtown Chicago in 1989, the city condemned 16
           improved, occupied buildings (one with historic landmark status
           the city had removed prior to condemnation) for a two-tower office
           and retail development. Because of a downturn in the local real
           estate market, the proposed project did not begin. However,
           according to Chicago officials, a $500 million development is now
           under construction on the long vacant land. In another example,
           Los Angeles acquired an industrially zoned parcel through eminent
           domain to build an animal shelter. According to city officials, to
           preserve the parcel for commercial use, the city is considering an
           alternate site for the animal shelter. As a result, the condemned
           property remains unused to date. In both of these instances, the
           cities expended public funds acquiring the land, including legal
           costs associated with invoking eminent domain.

           Property rights groups and one national community organization
           further noted that certain costs to communities may not be
           compensated when eminent domain is used. These issues include the
           dispersal of residents in low-income communities to other
           neighborhoods or cities. The residents of low-income neighborhoods
           may rely on one another for day-to-day needs such as child care,
           according to the community organization. If these residents lose
           their homes through eminent domain and are relocated to new areas,
           then some of the resources upon which they depend also can be
           lost. Property rights and community groups added that owners also
           suffer emotional costs when losing a home. Making people leave
           their homes can be destabilizing to individuals or families even
           when relocation costs are provided.

           Property rights groups also noted other community impacts, such as
           rent destabilization in neighborhoods affected by eminent domain
           and a reduction in an area's affordable housing stock when units
           are acquired and replaced by commercial developments. Other
           potential costs to the community that the groups mentioned include
           reductions in homeownership and the number of small businesses in
           an area. Furthermore, according to one property rights group,
           there is a tendency for cities to use eminent domain to remove
           manufacturing companies and replace them with retail businesses to
           collect increased sales revenue. However, removing manufacturing
           companies may have a negative effect on the community because it
           decreases the number of manufacturing jobs that are available.
			  
			  Property Owners and Groups Representing Them Raised Concerns
			  about the Land Acquisition and Eminent Domain Processes

           The procedural requirements we previously described could provide
           some safeguards for property owners, such as ensuring that they
           receive timely public notice and just compensation. However, the
           effectiveness of the procedures depends on how well they are
           implemented by the authority invoking eminent domain. Property
           owners and property rights advocates we interviewed identified
           problems with how some authorities communicate with property
           owners, designate areas as blighted, and value property. Property
           rights advocates also expressed concern that owners may not fully
           comprehend the benefits available to them when an authority
           acquires their property.
			  
			  Owners May Not Receive Public Notices and May Have Limited
			  Opportunity to Speak at Public Hearings

           Multiple owners and property rights groups with whom we met
           reported receiving little advanced, misleading, or no notice of
           public hearings or proposed condemnation actions by the relevant
           authority. These problems may prevent owners from voicing concerns
           about the proposed acquisition of their properties. For example,
           property rights groups in Los Angeles told us that many owners do
           not receive the statement of interest-owner participation letter
           that the authorities told us they send to all owners during the
           planning stage of each project. Property rights groups in Denver
           and New York said that notice was posted on signage, but not sent
           in a letter. According to the Denver group, the method of posting
           a notice at one site would not disseminate information about
           public hearings to most owners in a community. In another
           locality, the public notice that property owners received was
           reportedly not clear. For example, one authority sent a notice
           informing the owners of the redevelopment project and their
           responsibilities in a format that some owners confused with junk
           mail; it did not resemble an official letter. Finally, in Denver,
           property rights advocates told us that owners need notice earlier
           in the process. They said that owners learn about the condemnation
           after the initial planning has occurred and the urban renewal area
           has been designated. However, authorities in cities we visited
           consistently said that they always sent notice to owners of
           hearings--which give affected property owners multiple
           opportunities to voice concerns about the proposed plan and
           potential property acquisition--and sent notice of acquisition
           activities as required in all applicable laws and regulations.

           Even when notice is received, owners may not have the financial or
           technical ability to fully comprehend what actions an authority is
           taking, what recourse they may have, or where to go to for
           assistance in understanding the proceedings or terms mentioned in
           the notice. For instance, one authority sent a statement of
           interest-owner participation letter to property owners stating
           that a redevelopment project was proposed for their area. The
           letter states that owners may, within 30 days, propose their own
           alternative plan for redevelopment of the area. However, property
           rights groups explained that most owners do not have the money or
           skills needed to develop and execute a redevelopment plan. On the
           other hand, officials in this locality explained that multiple
           public funds and technical assistance were available to help
           owners formulate alternative business development plans. The
           letter of intent, officials said, provided the owners needed
           information about how to access these public benefits, remain in
           the community during redevelopment, and ultimately benefit from
           the project.

           One local organization involved in urban redevelopment explained
           that local public hearings and the voting on proposed project
           plans (which may provide authorities the power to take property)
           by governmental bodies, such as city councils, occurred on
           different dates. Of concern was that the votes would happen
           without public attendance, thereby reducing the transparency of
           the process. Furthermore, a concern was raised about the time
           owners had to speak at hearings. In one locality, each owner was
           reportedly allowed only three minutes to address the elected body
           that would decide to approve or deny the project plan in which
           eminent domain might be used.^49

           To facilitate better communication between property owners and
           government authorities looking to assemble land, some states, such
           as Utah, have established a Property Rights Ombudsman's office.^50
           According to the current official in Utah, the ombudsman is an
           attorney hired by the state as an independent source of
           information and assistance for property owners and others involved
           in the acquisition of property for public projects. The ombudsman,
           who provides services free of charge to owners, can mediate
           disputes, arrange for arbitration, order appraisals, and provide
           information to property owners and governmental authorities
           acquiring land. Connecticut and Missouri reportedly have recently
           adopted statutes creating property rights ombudsman-type offices.

           Many property rights groups and owners with whom we spoke were
           critical of blight designation processes in their localities. They
           said that nonblighted property parcels may be designated blighted
           because of factors such as design flaws, high density, turnover of
           occupants, and irregularly shaped parcels. According to some
           property rights groups, by these criteria almost any property or
           area in question may be considered blighted. They felt that blight
           should be defined narrowly based mainly on public health and
           safety risks from a specific property.
			  
			  Blight Designations May Be Broadly Construed and Affect Nonblighted
			  Properties

           According to officials from one national organization, farmland
           may be wrongly designated as blighted. Many farms have older and
           what may appear to be dilapidated homes and barns, or old storage
           sheds and tractors, which makes the property especially
           susceptible to a blight designation. The officials added, however,
           that these buildings and machines are often fully functional or
           operable, meet housing or farm needs, and pose no public danger.

           In the projects we reviewed where eminent domain was used to
           remove blight, blight was almost always designated by area (such
           as a city block) rather than by parcel. Owners and property rights
           groups opposed to this practice stated that nonblighted property
           can then be taken based on this area-wide designation. During the
           project planning stage, usually for projects that are considered
           urban redevelopment or blight removal, authorities designate the
           physical boundaries of areas selected for redevelopment and
           determine the presence of blight in the area. This designation is
           often then applied to all parcels in the area which, in turn,
           allows authorities to acquire any property in the designated area.
           Property owners and community groups argue that not all property
           in such areas is blighted; rather, many properties are improved
           and occupied.

           Furthermore, we were told that the planning stage and blight
           designation can occur years before an authority is able to
           commence acquisition and construction in the area. For example,
           one area we reviewed initially was deemed blighted in 1986. The
           blight designation, and with it the threat of eminent domain,
           destabilized property values in the neighborhood for nearly 20
           years, according to one owner. Although the area has been an
           official redevelopment area since 1986, local officials told us
           that state redevelopment law limits a blight designation to 12
           years. The authority is then required by law to return to the
           deciding elected body to again prove blight before the authority
           is able to move forward with the project.

           Property rights groups also expressed concerns that blight may be
           exacerbated by the redevelopment activity and has been termed
           "developer blight"--that is, the physical decline of a parcel or
           area, such as a city block, once a redevelopment project has been
           announced. For example, in Denver, a property rights group told us
           that it is difficult to isolate the causes and effects of blight
           in their area because once an area is designated as blighted its
           decline might hasten. The public knowledge of the impending
           redevelopment and related property acquisition, according to one
           concerned group, can cause property values to fluctuate and
           discourage property owners from maintaining their dwellings or
           businesses or, in other words, cause an area to become blighted.
           In one neighborhood, according to a local property rights group,
           improved residential buildings were largely occupied and multiple
           businesses were open prior to the announcement of a redevelopment
           project. However, once the project was announced and the authority
           began the project design and planning stage, the developer
           purchased many of the properties and over time, failed to maintain
           them properly. This activity, according to the property rights
           group, constituted developer-initiated blight in the neighborhood.
           Remaining owners are concerned that "developer blight" has reduced
           their property values and that they will not receive what they
           consider just compensation from the authority as the project
           proceeds. Another group suggested that redevelopment plans and
           blight designations may prevent new businesses from relocating to
           a neighborhood that was revitalizing on its own because of the
           public's awareness that authorities will have the power to use
           eminent domain in the area. Authority officials told us that areas
           they seek for redevelopment are not revitalizing on their own, but
           rather declining and becoming further blighted.
			  
			  Some Property Owners Claim They Received Insufficient Compensation
			  and Others Faced High Costs to Challenge Condemnation or 
			  Compensation

           While property valuation is intended to provide property owners
           compensation at fair market value for their property, property
           rights groups and owners expressed concern about the
           reasonableness of property appraisals. Multiple property rights
           groups believed that localities undervalue property and make
           offers lower than owners would receive on the market. One group
           cited large differentials between final jury awards and first
           appraisal amounts in cases in which owners challenged a
           condemnation. Owners in this property rights organization who
           challenged initial offers reported receiving an average of 40
           percent more in compensation than the initial offer. Conversely,
           officials of the local authority claim that it would be to their
           detriment to make an unreasonably low offer at any stage in the
           negotiation process because an offer not in good faith might
           enable a jury to award additional damages to a prevailing owner.

           Some believe that property is undervalued because of when
           appraisals take place. In New York, one owner, attempting to
           remain in his home, stated that if he were eventually required to
           sell his property, it would be appraised long after all other
           neighborhood owners had settled and moved away. With most of the
           neighborhood acquired, the owner believed that, should he lose his
           bid to keep his property, the value of his property would be lower
           than when the neighborhood was fully occupied. One state mediator
           of property disputes explained that an approved redevelopment area
           creates a hardship for owners, which is exacerbated when the
           project construction date is unknown. Owners in this case may have
           a more difficult time selling their property on the open market
           because it is within a redevelopment zone and subject to eminent
           domain. On the other hand, in one city we reviewed, buyers
           actively sought property in areas slated for redevelopment because
           the prospect of an authority acquiring the property was high.

           Property rights groups also noted that property and business
           owners may be uninformed about the benefits provided to them once
           their property is taken by eminent domain. In Denver, a property
           rights group stated that owners did not always realize that money
           was available for relocation benefits. In other localities,
           property rights groups noted that owners might have known that
           some financial support was available, but might not have been
           aware of the range of benefits. However, property rights groups
           also stated that acquisition and eminent domain can cost business
           owners more than the amount compensated for under the URA or state
           and local relocation regulations. For example, the URA may often
           only partially cover expenses related to either lost inventory or
           transferring inventory to the new location. Moreover, businesses
           are not compensated for lost goodwill or for loss of business
           attributable to the new location under the URA.

           Multiple property rights groups further explained that owners
           often are unable to fight a condemnation action if they want to
           retain their homes or businesses or seek additional compensation
           because costs related to hiring an appraiser or attorney, as well
           as court costs, are too high. Property rights groups believe that
           many owners sell their property under the threat of condemnation
           when they otherwise would not do so because they cannot afford to
           fight the action, something which can take several years. In New
           York City, a contested condemnation can take more than 10 years to
           settle, according to city officials we interviewed. Authorities
           counter that, under certain circumstances, there is money
           available to owners to fight eminent domain. In some localities,
           authorities can use quick take, in which the authority obtains the
           title of the property and deposits the estimated compensation with
           the court. Owners, authorities note, can withdraw these funds to
           challenge the authority's valuation of their property. However, a
           property rights group and a state mediator emphasized that the
           owners cannot use these funds to dispute the authority's right to
           take the property. Challenges to the right to take must typically
           be made and heard prior to quick take procedures.^51

           According to one national organization, partial condemnations of
           farmland do not always result in just compensation. If authorities
           were to take only a portion of a farm and that portion ran
           directly through the middle of the property, the owner's business
           could be negatively affected. For example, one state reportedly
           developed a toll road that ran through the middle of a farm
           property. The farmer was paid the value of the land taken by the
           authority, but according to this organization, the damage done to
           the farm's business was not compensated. The road reduced the
           farm's crop yield, forced the farmer to maintain equipment on both
           sides of the walled toll road, and necessitated the costly
           alteration of an irrigation system.
			  
			  Since June 2005, Many State Legislatures Have Enacted Changes to
			  Their Eminent Domain Laws

           Numerous states have adopted at least one of three general types
           of changes to their eminent domain laws since June 2005. In
           particular, some states amended their eminent domain laws and
           placed restrictions on the use of eminent domain for economic
           development, increasing tax revenues, or transferring condemned
           property from one private entity to another. Other states revised
           their eminent domain procedures or added requirements. Finally,
           some states defined or redefined key terms related to the use of
           eminent domain, such as blight or blighted property, public use,
           and economic development. Several states had ballot initiatives on
           constitutional amendments to restrict current eminent domain laws.
           In addition, some states, including those that did and did not
           enact any changes, commissioned studies on their state's eminent
           domain laws.
			  
			  Slightly More Than Half of All State Legislatures Modified Their
			  Eminent Domain Laws
			  
           After the Supreme Court's Kelo decision, 29 states enacted at
           least one of three general types of changes to their eminent
           domain laws from June 23, 2005, through July 31, 2006.^52 These
           changes include placing certain restrictions on the use of eminent
           domain, revising procedural requirements, and defining or
           redefining key eminent domain terms. While at least 3 of the 29
           states specifically made reference to the Kelo decision in
           connection with their legislation, other states stated that the
           legislation was enacted to protect property rights and limit
           eminent domain use. Figure 3 identifies the states that enacted
           changes and the types of changes they enacted to their eminent
           domain laws.

^48The URA limits this payment to $22,500. 42 U.S.C. S4623(a)(1).

^49Officials from the National Academy of Public Administration told us
that academy panels generally encourage improved communication between
government agencies and the public and have put forth six principles of
effective consultation. These include having an inclusive and well-known
process, stakeholders being assisted to participate effectively, two-way
exchange of information, timely access to decision makers and feedback to
stakeholders, stakeholder satisfaction with the process, and stakeholder
influence on results.

^50Utah Code Ann. S 13-42-101-206.

^517-2 Nichols on Eminent Domain S 2.04 (2006).

^52The period of our analysis was from June 23, 2005, through July 31,
2006. We chose June 23, 2005, as the start date because the U.S. Supreme
Court decided Kelo on this date. During our analysis period, 21 states did
not make any changes to their eminent domain laws.

Figure 3: Changes to State Eminent Domain Laws from June 23, 2005, through
July 31, 2006

  Restrictions on Eminent Domain Use for Certain Purposes

According to our analysis, 23 of the 29 states enacted changes that placed
restrictions, with certain exceptions, on the use of eminent domain for
economic development, increasing tax revenues, or transferring condemned
property to a private entity (see fig. 3). Specifically, some of these
states prohibited the use of eminent domain to transfer private property
to a private entity for economic development unless the primary purpose of
the use was to eliminate blight. For example, both Alabama and Maine now
prohibit condemning authorities from taking property in a nonblighted area
for purposes of private retail, office, commercial, residential, or
industrial development or use. In addition, Ohio imposed a moratorium,
through December 31, 2006, on the use of eminent domain to take land
within a nonblighted area when the purpose is economic development that
leads to ownership of the property being vested in another private person.
Furthermore, Florida prohibits the use of eminent domain to take private
property for the purpose of preventing or eliminating slum or blight
conditions.

However, most of the states that enacted changes restricting the use of
eminent domain for economic development, increasing tax revenues, or
transferring condemned property to a private entity did make an allowance
for the transfer of private property to a private entity for public rights
of way and public utilities. Some states included other exceptions. For
example, Alabama, Kansas, and Nebraska allow the use of eminent domain to
clear a defective title under certain circumstances.

  Procedural Changes

Twenty-four of the 29 states changed their eminent domain procedures or
added new requirements (see also fig. 3). Some states placed the burden of
proof on the condemning authority to show that the use is public, the
taking is necessary to remove blight, or both. For example, Colorado law
states that the condemning authorities must prove by a preponderance of
evidence that the eminent domain taking is for a public use. Furthermore,
Colorado law sets a higher standard if the purpose is to eliminate
blight--requiring condemning authorities to show by clear and convincing
evidence that the taking is necessary for the elimination of blight.

In addition, some of these states require condemning authorities to
provide improved or additional public notice and hearings prior to
condemning a property. Utah law requires that written notice be provided
to the property owner of each public meeting at which a vote on the
proposed taking is expected to occur and that the property owner must be
given an opportunity to be heard on the proposed taking. West Virginia
redefined the requirement for public notice to require a certified letter
be sent to the property owner informing the owner about the public hearing
and the right to an inspection to determine if the property is blighted.

Some states also passed changes requiring condemning authorities to
negotiate in good faith and increase the level of compensation to be paid
to owners prior to invoking eminent domain. For example, in Missouri
condemning authorities are required to establish requirements for the
amount of compensation, which may be more than the fair market value.
Missouri law also requires condemning authorities to pay, in addition to
the fair market value, a "heritage" value for certain property owned by
the same family for more than 50 years, which is equal to 50 percent of
the fair market value of the property. Other procedural changes enacted by
some of the states include providing the former owner of a condemned
property the opportunity to purchase the property if it was not used
within certain period of time or for the stated purpose and requiring the
use of eminent domain to be approved by a governing body.

  Changes in Definitions

Twenty-one of the 29 states defined or redefined key terms related to the
use of eminent domain, including blight or blighted property, public use,
and economic development (see also fig. 3). In particular, some states
redefined blight or blighted property to include several explicit factors,
generally emphasizing factors that are detrimental to public health and
safety and removing aesthetic factors, such as irregular lot size. For
example, California's statutes require that for an area to be qualified
for redevelopment it must be predominantly urbanized with a combination of
physical and economic conditions of blight so prevalent and substantial
that they can cause a serious physical and economic burden that cannot be
reversed or alleviated by private enterprise or governmental action alone,
or in combination with each other, without redevelopment powers and
financing mechanisms. Prior California law would have allowed, as an
exception to its general rule, that property subdivided into parcels with
irregular shapes and inadequate sizes for proper development could also to
be considered as qualifying an areas as blighted for redevelopment
purposes. California amended its definition to remove this exception.

In addition, some states redefined public use to include the possession,
occupation, or use of the public or government entity, public utilities,
roads, and the addressing of blight conditions. For instance, Iowa defined
public use to include acquisition by a public or private utility, common
carrier, or airport or airport system necessary to its function. Indiana
included highways, bridges, airports, ports, certified technology parks,
and public utilities as public uses. Finally, some states also established
that economic development--which was defined by those states to include
activities to increase tax revenue, the tax base, employment, or general
economic health--does not constitute public use or purpose.

Several States Had Constitutional Amendments on Fall Ballots

At least six state legislatures approved constitutional amendments on
restricting current eminent domain laws, which were placed on the ballot
for voter consideration.^53 For example, the Louisiana legislature
approved two proposed constitutional amendments that were passed on
September 30, 2006, by the voters in that state. These two amendments,
among other things, (1) prohibit the taking of private property for use by
or transfer to a private person; (2) limit public purposes to a list of
factors, which includes such purposes as the removal of a threat to public
health and safety; (3) exclude economic development, enhancement of tax
revenue, and incidental benefits to the public from being considered in
the determination of a public purpose; and (4) provide an option for the
former owner to purchase condemned property or a portion of it should the
property go unused by the authority that originally acquired the property.
In addition, citizen-initiated proposals to amend the state constitution
obtained the requisite number of signatures and were placed on a ballot in
California, Nevada, and North Dakota.^54 For example, the Nevada Property
Owners Bill of Rights initiative to amend the state constitution in
regards to eminent domain qualified for the Nevada 2006 general election
ballot. The amendment would, among other things, establish just
compensation as the amount necessary to place owners in the same position
monetarily as if property had not been taken and prohibit the direct or
indirect transfer of property from one private party to another.

^53In addition to changing their eminent domain laws, Florida, Georgia,
and New Hampshire also approved a constitutional amendment further
restricting eminent domain laws that was placed on the states' ballots for
voter consideration. Michigan and South Carolina also had ballot measures
related to eminent domain. Some other states had measures on their ballots
regarding their eminent domain statutory laws, which we did not review
because they were outside our period of analysis. According to each
Secretary of State's website, the proposed constitutional amendment was
approved in Florida, Georgia, Louisiana, Michigan, Nevada, New Hampshire,
North Dakota, and South Carolina.

^54The California initiative approved for the ballot during the November
2006 election, if passed, would have, among other things, amended the
state constitution to bar state and local governments from condemning
private property and transferring it to another private party unless the
transfer occurred under circumstances where the private party would
perform a public use project. The California initiative failed.
California's state legislature also enacted changes to its definition of
blight, as noted in figure 2.

Some States or State Associations also Commissioned Studies on the Use of
Eminent Domain

Several states and state associations also commissioned studies to
determine if any changes were needed to their eminent domain laws. For
example, in November 2005, the president of the New York State Bar
Association appointed a special task force on eminent domain to provide
legal analysis and recommendations about appropriate legislative and
regulatory considerations in the practice of eminent domain law in the
aftermath of the Kelo decision. According to a report issued by the task
force, little state-specific research and data exist to accurately assess
both the need for, and the impact of, changes to the state's eminent
domain laws.^55 The task force suggested that the state legislature begin
the collection and analysis of such data before deciding on appropriate
substantive modifications to the law. For example, the report lists
several questions that could be answered through empirical research,
including how often condemnation proceedings are instituted and how many
times eminent domain is used for economic development. Consequently, the
task force recommended that a Temporary State Commission on Eminent Domain
be established to further study the use of eminent domain in New York.^56

In June 2005, the Governor of Missouri established by executive order a
task force to study the use of eminent domain, including when the property
being acquired by eminent domain would not be directly owned or primarily
used by the general public. The task force recommended three categories of
actions: redefining the scope of eminent domain, improving the procedures
and process required for exercising eminent domain, and providing
penalties for condemning authorities that abuse the eminent domain
process.^57 As a result, the state enacted changes to its eminent domain
laws in July 2006. The governor of New Mexico also issued an executive
order in which he stated that the most effective method of examining
Kelo's impact on the state's eminent domain laws and practices was by
convening a task force of the state's eminent domain experts to determine
what steps should be taken to ensure that condemnation would be used
responsibly. Therefore, he appointed a state commission to make
recommendations on eminent domain reform.

^55New York State Bar Association, New York State Bar Association Special
Task Force on Eminent Domain, New York State Bar Association Special Task
Force on Eminent Domain Report (Mar. 2006).

^56Id. at 52.

^57State of Missouri, Missouri Eminent Domain Task Force, Final Report and
Recommendations of the Missouri Eminent Domain Task Force (Jefferson City,
Mo.: Dec. 30, 2005).

Finally, in November 2005, Ohio enacted legislation that created a task
force to study the use and application of eminent domain in the state and
how the Kelo decision affects state law governing the use of eminent
domain. On August 1, 2006, the task force issued its report, which, among
other things, recommended that the state retain the use of eminent domain
as a tool for the elimination of blight, even if the property that is
taken is converted to another private use; rewrite and tighten the
definition of blight; and require that a majority of the properties in an
area be blighted to designate it as such. The report also recommended (1)
prohibiting eminent domain takings solely for the purpose of generating
added tax revenue, (2) prohibiting declaring blight solely on the basis of
additional revenue that could be generated, and (3) compensating the
property owner for actual moving and relocation expenses, and, when
appropriate, loss of business, goodwill, and attorney's fees.^58

Observations

An inherent right of sovereignty, eminent domain is a government's power
to take private property for a public use while fairly compensating the
property owner. Despite its fundamental significance, little is known
about the practice or extent of the use of eminent domain in the United
States. The matter of eminent domain remains largely at the level of state
and local governments that, in turn, delegate this power to their agencies
or designated authorities. Since multiple authorities have the power to
take private property within the same jurisdiction without any centralized
tracking of eminent domain use, data such as the purpose for which eminent
domain is used or the number of times eminent domain is used in a given
locality are not readily available. The testimonial evidence we obtained
from state and local authorities on the purposes for which eminent domain
can be and was used generally pointed to long-established uses, such as
taking land for infrastructure, particularly transportation-related
projects; uses that addressed economic and social conditions, such as
blight; relatively more recent uses such as environmental remediation; and
initiatives aimed at promoting economic activity or community
redevelopment. Recently, popular attention has concentrated on cases where
the condemned land was ultimately used for economic development projects
and appeared to benefit private entities. In the absence of statewide or
nationwide data, it is difficult to quantify the usage of eminent domain;
for example, there are no data on how frequently private-to-public or
private-to-private transfer of property occurs or with what frequency
eminent domain has been used by state and local governments, their
agencies, or designated authorities.

^58Ohio General Assembly, Legislative Task Force to Study Eminent Domain
and Its Use and Application in the State, Final Report of the Task Force
to Study Eminent Domain (Columbus, Ohio: Aug. 1, 2006). Indiana also
commissioned a task force to study eminent domain on May 6, 2005, which
was prior to the date of the Kelo decision. See Indiana HEA 1063-2005
(P.L. 173-2005), and other states may have formed various groups,
commissions or task forces to study eminent domain.

Concerns and debates on the use of eminent domain for economic development
purposes, as well as the Kelo decision, have played a role in recent state
legislative activity. Many state legislatures have acted to prohibit
certain eminent domain practices, such as preventing property from being
transferred from one private party to another for specific purposes--for
purely economic development projects, as an example. Many states changed
their eminent domain laws to permit a private-to-private transfer only if
it meets certain conditions, such as the property having been determined
to be blighted. Since these recent modifications to state laws have not
been tested and historical data on eminent domain use are not available
for comparison purposes, how these laws may affect property rights or
state and local government use of eminent domain is unclear.

Our discussions with authorities and property rights groups suggest that
the impact of eminent domain often depends on the nature of the project,
the parties involved, costs related to legal proceedings and relocation,
and the administration of procedural requirements. On the one hand, local
and state government officials generally have described eminent domain as
one of several tools necessary for land acquisition and explained that
most of the properties assembled for projects are obtained through
negotiated settlements with owners. Representatives from the authorities
in cities we visited provided examples of how projects where land was
assembled using eminent domain have yielded benefits to the public,
including increased housing stock and new commercial centers that offer
local job opportunities. On the other hand, property rights advocates
described the high costs property owners faced in challenging property
valuations and the intangible effects on neighborhoods when residents are
involuntarily dispersed. Although we observed some of the benefits derived
from the projects we visited and heard of instances in which property
owners reportedly were misled by authorities about condemnation
proceedings or appraisals, a lack of measures and aggregated data do not
allow us to make any comment on the overall impact eminent domain has had
on property owners and communities.

Regardless of their stance in the debate on eminent domain, government
officials and property rights groups we interviewed identified a few
concerns related to the procedures on invoking eminent domain, including
the adequacy of compensation amounts and the timeliness of notification
about public hearings. First, many government officials we spoke with said
that certain benefits provided under the URA, such as actual moving costs
and expenses in finding a replacement site for businesses, to displaced
individuals and businesses may not offer adequate compensation under
certain circumstances. For example, the URA places a $10,000 cap-- an
amount left unchanged since 1987--on reestablishment expenses for
businesses that have to relocate. A 2002 FHWA study confirmed the
inadequacy of the reestablishment payments. Second, property owners and
organizations advocating for property rights repeatedly told us that
property owners may have limited opportunity or are unaware of the need to
attend public hearings at a project's planning stage to voice their
opinions about the proposed acquisition of their property. For example,
some property owners and property rights groups explained that property
owners may not receive public notice on a timely basis or that they may
lack sufficient understanding of the legal process to be fully engaged in
the hearing discussions. To address the latter issue, at least one state
has created an ombudsman office to provide information and assistance for
property owners and others involved in the acquisition of property for
public projects. Nevertheless, these two concerns may deserve continued
attention given that just compensation and public hearings are two
important safeguards designed to protect property owners.

Agency Comments and Our Evaluation

We provided a draft of this report to the Departments of Justice,
Transportation and Housing and Urban Development for their review. The
Department of Transportation provided technical comments, which have been
incorporated where appropriate. The Departments of Justice and Housing and
Urban Development did not have any comments.

We will send copies of this report to the Chairman and Ranking Member,
Subcommittee on Transportation, Treasury, the Judiciary, Housing and Urban
Development, and Related Agencies, Senate Committee on Appropriations; and
the Chairman and Ranking Member, Subcommittee on Transportation, Treasury,
Housing and Urban Development, the Judiciary, District of Columbia, and
Independent Agencies, House Committee on Appropriations. We also will send
copies to the Secretary of Housing and Urban Development, Secretary of
Transportation, and the Attorney General. We also will make copies
available to others upon request. In addition, the report will be
available at no charge on the GAO Web site at http://www.gao.gov.

If you or your staff have any questions regarding this report, please
contact me at (202) 512-8678 or [email protected]. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on the
last page of this report. Key contributors to this report are listed in
appendix II.

William B. Shear
Director, Financial Markets and Community Investment

Appendix I: Objectives, Scope and Methodology

Congress, in the Transportation, Treasury, Housing and Urban Development,
the Judiciary, the District of Columbia, and Independent Agencies
Appropriations Act, 2006, mandated that we conduct a nationwide study on
the use of eminent domain. Our objectives were to provide information on
(1) the purposes and extent for which eminent domain can be and has been
used; (2) the process states and select localities across the country use
to acquire land, including by eminent domain; (3) how the use of eminent
domain has affected individuals and communities in select localities; and
(4) the changes state legislatures made to laws governing the use of
eminent domain from June 2005 through July 2006.

To report on the purposes for which eminent domain has been and can be
used, including the extent of its use, we reviewed pertinent sections of
each state's constitution to determine whether there is a general
limitation on use of eminent domain in the state for public use only. We
also reviewed specific blight definitions for 10 states we selected:
California, Colorado, Florida, Illinois, Massachusetts, Missouri, New
York, Texas, Virginia, and Washington.^1 In addition, we interviewed
multiple national associations of local and state government officials and
planning professionals, national public interest groups, national property
rights groups, and the National Academy of Public Administration to gain
their perspective on past, current, and potential uses of eminent domain.
We also interviewed federal officials from the Departments of
Transportation, Housing and Urban Development, and Justice, as well as the
Environmental Protection Agency, to learn about how federal programs or
funding may be involved in eminent domain proceedings that state and local
governments undertake. Finally, we requested information from state
legislative research offices on information related to which authorities
within the selected state have the authority to use eminent domain.

To learn about specific instances in which eminent domain was used, we
collected project information from multiple sources. We solicited project
information from 10 different national organizations that had either
testified before Congress on eminent domain matters or who met the
criteria laid out in our mandate for types of organizations we were
expected to consult during our study. We provided these 10 organizations
with a formal request for project information. Our request included basic
criteria that each submitted project should meet. The criteria were:
eminent domain having been used (rather than only threatened), the project
being substantially completed by December 2004, the project not being
primarily related to transportation, the project being located within the
10 states we selected, and preferably, that the project be funded with
some federal financial assistance. In addition, we explained to the
organizations that we would accept projects that did not involve federal
funds, as long as the other four criteria were met.^2 We requested that
each organization provide at least 5 different projects within each of the
10 states we selected for review.

^1We selected 10 different states based on the 10 regions used by the U.S.
Department of Housing and Urban Development (HUD) in its quarterly report
on the nation's housing market to provide geographic diversity among the
selected states. HUD's regional framework was used because HUD has
established programs (e.g., Community Development Block Grant Program) to
provide states and localities funds for promoting community and economic
development. From the 10 regions, we selected the state in each region
with the highest number of housing units (single and multifamily)
authorized by building permits in 2003, 2004, and 2005 based on HUD data.

In total, the 10 national organizations provided 134 projects. Based on
the criteria outlined above, the desire to have at least one project in
each of the selected states, and to provide a diversity of examples, we
selected a total of 40 projects from the 134 for further review.^3 To
obtain further information on the projects, we made at least three
attempts to contact each local authority responsible for completing or
overseeing the project. We completed contact with 36 of the 40 local
authorities and learned that 9 of the projects did not meet our criteria
because eminent domain was not used, the project was not yet complete, or
the project was located in a state not included in our 10 selected states.
Of the 27 remaining projects for which we were able to confirm basic
project information, such as the use of eminent domain or year of
completion, we sent a detailed e-mail request for project information to
individuals we contacted from the local authority. Based on our
conversations with the authorities responsible for the 27 projects, we
scaled back the amount of information we were requesting and extended
deadlines for providing the requested information. We received detailed
project information for only 11 out of the 27 projects.

^2We had anticipated gaining additional knowledge about projects from
federal agencies, departments, and programs that may have offered some
assistance to the selected projects. However, recognizing that not all
projects selected may involve federal financial assistance and that our
mandate focused on state and local use of eminent domain, we did not want
to exclude any projects solely because federal resources were not used in
the project.

^3We selected 40 projects from the 134 received because project
information provided was not always sufficient for us to determine whether
to include a project in our review. For example, 27 percent, or 36 out of
the 134, of the projects were either still in progress or the completion
date was unknown, according to the organization providing the project
information.

In addition to efforts described above, we interviewed officials from
state departments of transportation of the 10 selected states. We decided
to speak with these officials because interviews with national
organizations and federal agencies and our literature research indicated
that transportation-related projects often rely on eminent domain to
assemble land. From these officials we also solicited detailed project
information on transportation-related projects, mostly dealing with road
improvements, construction, or expansion, in which eminent domain was
used. From the state departments of transportation we received 6 projects
in which eminent domain was used that also met the same criteria used to
select projects provided by the 10 national organizations. We also
contacted several state agencies responsible for brownfield remediation,
but were unable to receive any additional projects from these agencies.

To describe how state agencies and select localities invoke eminent
domain, we relied on our interviews with the 10 state departments
mentioned above. We discussed the state departments of transportation's
authority to invoke eminent domain, the planning phases they undertake,
and their land acquisition and relocation processes. In addition, we
interviewed officials from the 5 cities we visited: Baltimore, Maryland;
Chicago, Illinois; Denver, Colorado; Los Angeles, California; and New
York, New York.^4 During our site visits, we learned about specific
projects in which eminent domain was used according to the city officials,
14 of which we toured. City officials also provided written documentation
related to the selected projects that included detailed project plans,
court documents, applicable state statutes and municipal codes, and
relocation services provided to property owners and residents displaced
due to eminent domain proceedings. Finally, we reviewed pertinent sections
of each state's constitution to determine whether there is a requirement
for the payment of fair or just compensation paid to the owner whose
property is taken by eminent domain.

^4To make effective use of time and resources, we first visited Baltimore,
Maryland, to gain some perspective on redevelopment projects that involved
eminent domain use. Unable to take into consideration the frequency of
eminent domain use or generate a list of projects in which eminent domain
was used by state or localities, we visited the four remaining cities
based on geographic diversity, location within our 10 selected states, and
availability of time and resources.

To convey how eminent domain has affected property owners and communities
in select localities, we interviewed national and local organizations that
advocate for property rights, in addition to property owners who claimed
to have been involved in eminent domain proceedings. In accordance with
long-standing GAO policy, we excluded eminent domain takings currently
under litigation and, therefore, only focused on past instances involving
eminent domain use. We discussed how eminent domain impacts property
owners, businesses, and residents with affected owners and organizations
that advocate for property rights.

To report on the changes state legislatures had made to laws governing the
use of eminent domain, we reviewed legal databases and various
Web-published information, such as the text or status of a bill, from
state legislatures from all 50 states to determine in which states changes
occurred. We then analyzed the state laws identified and grouped states
based on our interpretation of those laws into three broad categories in
order to more easily describe which states enacted certain types of
provisions to their eminent domain laws. The three categories were: (1)
states that placed restrictions on the use of eminent domain, such as
prohibiting its use to increase property tax revenues, transfer condemned
property to a private entity, or to assemble land for projects that are
solely for economic development; (2) states that established additional
procedural requirements, such as providing further public notice prior to
condemnation; and (3) states that modified definitions for terms related
to eminent domain use, such as blight or blighted property, public use,
and economic development. We only reviewed those changes to state law that
state legislatures passed and governors signed into law between June 23,
2005, and July 31, 2006.^5 Related to other state and local laws
referenced in the report, we did not undertake any independent legal
review of them or how those laws affect the use of eminent domain. To
identify state requirements regarding eminent domain procedures, we relied
on the state and local officials we interviewed and the information they
provided. In the time frame allotted for our study, we could not review
all pertinent state requirements regarding eminent domain authorities and
procedures.

In addition to the work outlined above, we conducted an extensive
literature search to assist us in meeting our objectives. Primarily, we
searched for other reports, studies, and academic papers that may have
tallied or assembled data sets on eminent domain use, or developed
measures to assess the impact of eminent domain. To refer to or analyze
data collected by others, we had to satisfy our criteria for identifying
reliable and valid data, which include testing the methods and procedures
others used in collecting the data. Although we identified some studies
that were useful in providing us context and outlining barriers to
collecting and analyzing data related to eminent domain use, we did not
find any with data that met our criteria.^6 Our literature review did
provide many articles, reports, and reviews of matters related to eminent
domain. However, none provided an analysis of detailed data related to
eminent domain use.

^5The period covers approximately 1 year after the Kelo decision.

We conducted our work in accordance with generally accepted government
auditing standards from January through November 2006 in Baltimore,
Maryland; Chicago, Illinois; Denver, Colorado; Los Angeles, California;
New York, New York; and Washington, D.C.

^6In addition to time and resource constraints, the lack of any systematic
data that met our criteria prohibited us from performing other types of
analyses. For example, we did not undertake any cost-benefit analyses of
specific projects or purposes, since no data existed that quantified the
various costs and benefits attributed to the various parties involved in
an eminent domain taking. Also, we could not undertake a case study
approach, primarily because the various involved parties could not be
readily located, such as property owners who had moved due to the eminent
domain taking.

Appendix II: GAO Contacts and Staff Acknowledgments

GAO Contact 

William B. Shear, (202) 512-8678 or [email protected]

Acknowledgments

In addition to the individual named above, Karen Tremba (Assistant 
Director), Alexander Galuten, Alison Martin, Marc Molino, Josephine Perez, 
Linda Rego, Barbara Roesmann, Julie Trinder, Mijo Vodopic, Kristen Waters, 
and Nicolas Zitelli made key contributions to this report.

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Highlights of GAO-07-28, a report to congressional committees

November 2006

EMINENT DOMAIN

Information about Its Uses and Effect on Property Owners and Communities
Is Limited

In the Transportation, Treasury, Housing and Urban Development, the
Judiciary, the District of Columbia, and Independent Agencies
Appropriations Act, 2006, Congress mandated that GAO conduct a nationwide
study on the use of eminent domain by state and local governments. This
report provides information on (1) the purposes for and extent to which
eminent domain can be and has been used; (2) the process states and select
localities across the country use to acquire land, including by eminent
domain; (3) how the use of eminent domain has affected individuals and
communities in select localities; and (4) the changes state legislatures
made to laws governing the use of eminent domain from June 2005 through
July 2006.

To address these objectives, GAO reviewed relevant provisions in federal,
state, and local laws; conducted site visits to various redevelopment
projects where eminent domain was used; and interviewed multiple national
associations of local and state government officials and planning
professionals, national public interest groups, and national property
rights groups to gain their perspectives on the use of eminent domain and
its effect on communities and property owners.

The Department of Transportation provided technical comments on a draft of
this report, which have been incorporated where appropriate.

Officials from national organizations and state and local governments
cited various purposes for which eminent domain can be or has been used,
including the building or expansion of transportation-related projects;
the elimination and prevention of conditions that are detrimental to the
physical, social, and economic well-being of an area; remediation of
environmental contamination; and economic development. However, no
centralized or aggregate national or state data exist on the use of
eminent domain, thereby precluding GAO from any national or statewide
assessments of, among other things, how frequently eminent domain is used
for private-to-public or private-to-private transfer of property and
purposes of these transfers.

Multiple laws promulgated from federal, state, and local governments set
forth how authorities can acquire land--including by eminent domain--and
how compensation for property owners is determined. Some believe payment
limits are too low. The initial step in a project that involves land
acquisition is the public review and approval by a public body of a
project plan, which is followed by a land valuation process during which
title studies and appraisals are completed. During the land acquisition
stage, authorities often make a formal offer to the owner and attempt to
negotiate the purchase of the property. If the authority cannot locate the
owner or the parties cannot agree to a price, among other circumstances,
the authorities then begin the formal legal proceedings to acquire the
property by eminent domain. Finally, once the property is acquired,
authorities may provide relocation assistance that may include monetary
payments to cover moving expenses.

Redevelopment projects for which eminent domain is used affect individuals
and communities in a range of ways that cannot be quantified due to a lack
of measures and aggregate data. According to authorities, areas selected
for redevelopment could have been vacant and abandoned land or those that
included residents and operating businesses. Local officials both
described and showed us community benefits resulting from redevelopment
projects, including additional employment opportunities and housing in an
area. Also, property rights groups told us some of the negative effects of
eminent domain, such as the dispersal of long-standing communities.
Finally, these groups expressed concerns about how authorities implement
procedures for using eminent domain, particularly the provision of public
notice to owners about the risk of condemnation, and the process for
designating an area as blighted.

From June 23, 2005, through July 31, 2006, 29 states enacted at least one
of the following three general types of changes to their eminent domain
laws: (1) restrictions on the use of eminent domain under certain
circumstances, (2) additional procedural requirements, and (3) changes
that defined or redefined key terms related to eminent domain including
public use.

Eminent Domain

(250277)

References

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