To exercise the power of eminent domain, the government must prove that the four elements set forth in the Fifth Amendment are present: (1) private property (2) must be taken (3) for public use (4) and with just compensation. These elements have been interpreted broadly. Private Property The first element requires that the property taken be private. Private property includes land as well as fixtures, leases, options, stocks, and other items.
Taking The second element refers to the taking of physical property, or a portion thereof, as well as the taking of property by reducing its value. Property value may be reduced because of noise, accessibility problems, or other agents. Dirt, timber, or rock appropriated from an individual’s land for the construction of a highway is taken property for which the owner is entitled to compensation. In general, compensation must be paid when a restriction on the use of property is so extensive that it is tantamount to confiscation of the property.
Some property rights routinely receive constitutional protection, such as Water Rights. For example, if land is changed from waterfront to inland property by the construction of a highway on the shoreline, the owners of the affected property are to be compensated for their loss of use of the waterfront.
Another property right that is often litigated and routinely protected is the right to the reasonable and ordinary use of the space above privately owned land. Specifically, aircraft flights over private property that significantly interfere with the property owner’s use may amount to a taking. The flights will not be deemed a taking unless they are so low and so frequent as to create a direct and immediate interference with the owner’s use and enjoyment of the property.
Actions by the government that courts do not consider takings include the publication of plans or the plotting, locating, or laying out of public improvements, including streets, highways, and other public works, even though the publicity generated by such actions might hinder a sale of the land.
The courts have traditionally not recognized the regulation of property by the government as a taking. Regulating property restricts the property owner’s use and may infringe on the owner’s rights. To implement a regulation, the state exercises its police power and is able to control the use of the property. Although the courts recognized a regulation as a taking in 1922, they have been inconsistent in their later rulings on this issue. In Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 43 S. Ct. 158, 67 L. Ed. 322 (1922), the U.S. Supreme Court ruled that coal mining under an owner’s property was not a taking, despite a subsidence, or settling, of the property’s surface. In 1987, the Court stated that regulations that are excessive require compensation under the Fifth Amendment (First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, 482 U.S. 304, 107 S. Ct. 2378, 96 L. Ed. 2d 250 ). More recently, the Court determined that regulations that strip property of value or that do not substantially advance legitimate state interests are takings for which compensation is required (Nollan v. California Coastal Commission, 483 U.S. 825, 107 S. Ct. 3141, 97 L. Ed. 2d 677 ).
In a case examining a Moratorium imposed on development in the Lake Tahoe area, the U.S. Supreme Court has decided that a moratorium on development is not necessarily a taking, and that regulatory takings cases must be decided on a case-by-case basis rather than on categorical rules, Tahoe-Sierra Preservation Council v. Tahoe Regional Planning Agency, 535 U.S. 302, 122 S. Ct. 1465, 152 L. Ed. 2d 517 (U.S., Apr 23, 2002) (NO. 00-1167). In that case, the Tahoe Regional Planning Agency had imposed a moratorium on construction and development that lasted almost three years while the agency devised rules to protect the water quality of Lake Tahoe on the California-Nevada border. Some of the property owners sued, claiming that the moratorium constituted a categorical taking because they were deprived of all economically beneficial use of the property during the period of the moratorium. In a 6–3 decision, the Court held that because the regulation was temporary, it could not constitute a categorical taking.
Public Use The third element, public use, requires that the property taken be used to benefit the public rather than specific individuals. Whether a particular use is considered public is ordinarily a question to be determined by the courts. However, if the legislature has made a declaration about a specific public use, the courts will defer to legislative intent (Hawaii Housing Authority v. Midkiff, 467 U.S. 229, 104 S. Ct. 2321, 81 L. Ed. 2d 186 ). Further, “[t]he legislature may determine what private property is needed for public purpose … but when the taking has been ordered, then the question of compensation is judicial” (Monongahela Navigation Co. v. United States, 148 U.S. 312, 13 S. Ct. 622, 37 L. Ed. 463 ).
To determine whether property has been taken for public use, the courts first determined whether the property was to be used by a broad segment of the general public. The definition of public use was later broadened to include anything that benefited the public, such as trade centers, municipal civic centers, and airport expansions. The U.S. Supreme Court continued to expand the definition of public use to include aesthetic considerations. In Berman v. Parker, 348 U.S. 26, 75 S. Ct. 98, 99 L. Ed. 27 (1954), the Court ruled that slums could be cleared in order to make a city more visually attractive. The Court in Berman stated further that it is within legislative power to determine whether a property can be condemned solely to beautify a community.
State courts have also expanded the definition of public use. The Michigan Supreme Court even allowed property to be condemned for the private use of the General Motors Company, under the theory that the public would benefit from the economic revitalization a new plant would bring to the community (Poletown Neighborhood Council v. City of Detroit, 410 Mich. 616, 304 N. W. 2d 455 ).
Just Compensation The last element set forth in the Fifth Amendment mandates that the amount of compensation awarded when property is seized or damaged through condemnation must be fair to the public as well as to the property owner (Searl v. School District No. 2 of Lake County, 133 U.S. 553, 10 S. Ct. 374, 33 L. Ed. 740 ). Because no precise formula for determining it exists, just compensation is the subject of frequent litigation.
The courts tend to emphasize the rights of the property owner in eminent domain proceedings. The owner usually has not initiated the action but has been brought into the litigation because his or her property is needed for public use. The owner must participate in the proceedings, which can impose an emotional and financial burden.
The measure of damages is often the fair market value of the property that is harmed or taken for public use. The market value is commonly defined as the price that reasonably could have resulted from negotiations between an owner who was willing to sell it and a purchaser who wanted to buy it. The value of real property is assessed based on the uses to which it reasonably can be put. Elements for consideration include the history and general character of the area, the adaptability of the land for future buildings, and the use intended for the property after its taking. Generally, the best use of the land is considered to be its use at the time it was condemned, even though the condemnor might not intend to use the land in the same manner as the owner. Crops, grass, trees, minerals, rental income, and all other items that fairly enter into the question of value are taken into consideration when determining just compensation. The amount of compensation should be measured by the owner’s loss rather than by the condemnor’s gain, and the owner should be placed in as good a financial position as he or she would have been in had the property not been taken (Monongahela). The compensation should be paid in cash, and the amount is determined as of the date title vests in the condemnor. Interest is paid on the award until the date of payment.