Responding to Kelo v. New London: Avoiding Intrinsic Injustice by Paying a Fairer Price

Abstract

The reason why some exercises of eminent domain feel so much like theft is that the accepted constitutional definition of "just compensation" systematically under-compensates certain categories of private owners. These categories particularly include residential owners as well as others who do not hold their property for primarily commercial or investment purposes. In the eyes of these owners, the principal significance of their property is not its commercial asset value as a commodity (or "fair market value") but, rather, its personal and subjective use value.

The "willing seller" test used to measure constitutional compensation often falls far short of the mark because these residential and other owners are not willing sellers, at least not at prices anything like fair market value. Often, moreover, realistic market conditions make it impossible for these owners to replace what they lose with the money they receive as "just compensation." The resulting under-compensation for their real value - subjective use value - naturally results in a painful pinch and public outcry.

This short piece proposes a fairer approach to pricing as an alternative to recent procrustean calls to cut down the power of eminent domain. It aim is to offer a more balanced possibility of preserving the salutary features of eminent domain while avoiding its manifest injustices.

Keywords: property, property law, private property, takings, public use, public use clause, private use, just compensation, constitution, law reform, due process, substantive due process, economic due process