State and local governments that use eminent domain to seize private property for economic development would lose federal funding for two years under legislation passed by the House on Tuesday.
The bipartisan bill was authored through an unusual pairing of Rep. Jim Sensenbrenner (R-Wis.) and Rep. Maxine Waters (D-Calif.) and passed on a voice vote.
The measure is a response to the 2005 Supreme Court ruling, Kelo v. City of New London, which held in a 5-4 decision that economic development is considered a “public use” under the Fifth Amendment’s Taking Clause.
The decision justified the government’s condemnation of private property, in order to give it to a private business to redevelop and create a more lucrative tax base. Historically, eminent domain was legally restricted to projects for public use like road and school construction.
As a result of this ruling, the federal government’s power of eminent domain has become almost limitless, providing citizens with few means to protect their property.
“Uncle Sam can condemn one family’s home only because another private entity would pay more tax revenue,” Sensenbrenner said.
Sensenbrenner said his bill would “protect every homeowner and non-profit from being bulldozed in the interest of for-profit land grabs.”
“The need to ensure that property rights are returned to all Americans is as strong now as it was when Kelo was decided,” Sensenbrenner said. “Congress must play a pivotal role in reforming the use and abuse of eminent domain.”
The infamous decision by the Supreme Court is also one of the most unpopular. It allowed the Connecticut city to condemn property owned by Susette Kelo and her neighbors, then they gave the property to the Pfizer Corporation to build a new research facility and for the construction of a hotel and condos.
The city and state spent $78 million to bulldoze the property, but the new development never materialized and the property is now vacant.
Waters said the Supreme Court decision gave governments a license to “coerce individuals on behalf of society’s strongest interests.”
“The founders cannot have intended this perverse result – using economic development as a justification for using its power of eminent domain at the expense of the poor and politically weak,” Waters said.