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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: 

GAO Highlights: 

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

Why GAO Did This Study: 

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. 

What GAO Found: 

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. 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-28]. 

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact William B. Shear at (202) 
512-8678 or shearw@gao.go 

[End of Section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

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: 

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

Use of Eminent Domain Generates Benefits and Costs Affecting a Wide 
Array of Community Interests and Individuals: 

Since June 2005, Many State Legislatures Have Enacted Changes to Their 
Eminent Domain Laws: 

Observations: 

Agency Comments and Our Evaluation: 

Appendix I: Objectives, Scope and Methodology: 

Appendix II: GAO Contacts and Staff Acknowledgments: 

Figures: 

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

Figure 2: Common Real Estate Acquisition Stages in Visited Localities: 

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

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: 

United States Government Accountability Office: 
Washington, DC 20548: 

November 30, 2006: 

The Honorable Christopher S. Bond: 
Chairman: 
The Honorable Patty Murray: 
Ranking Member:S
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.[Footnote 1] The decision allows private-to-private 
transfer of property for economic revitalization purposes pursuant to a 
city development plan. 

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.[Footnote 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. 

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.[Footnote 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. 

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.[Footnote 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.[Footnote 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. 

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.[Footnote 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. 

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.[Footnote 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.[Footnote 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.[Footnote 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. 

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.[Footnote 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. 

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.[Footnote 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.[Footnote 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. 

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.[Footnote 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.[Footnote 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.[Footnote 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. 

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.[Footnote 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.[Footnote 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.[Footnote 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.[Footnote 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. 

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. 

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.[Footnote 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.[Footnote 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.[Footnote 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.[Footnote 23] 

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.[Footnote 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.[Footnote 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.[Footnote 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.[Footnote 27] In 2005 FHWA made some 
revisions to the URA regulations, but the revisions did not raise the 
cap on reestablishment payments.[Footnote 28] Such an increase requires 
a statutory change.[Footnote 29] 

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.[Footnote 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.[Footnote 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. 

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

[See PDF for image] 

Source: GAO. 

[End of figure] 

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.[Footnote 32] Provisions in the 
Illinois Municipal Code authorize municipalities to take property for 
redevelopment based on a blight designation.[Footnote 33] In New York, 
the Eminent Domain Procedure Law sets forth the procedure by which 
property is acquired and property owners are compensated.[Footnote 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.[Footnote 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.[Footnote 36] The Colorado Urban Renewal and Eminent Domain 
Laws contain procedures for using eminent domain to eliminate or 
prevent blight or slum conditions.[Footnote 37] To govern the 
relocation of displaced residents, Maryland, New York, and Washington, 
like California, have established laws that provide certain state 
relocation benefits.[Footnote 38] Therefore, a mixture of federal and 
state laws directs how local authorities use their eminent domain 
power, provide compensation, and other required benefits. 

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.[Footnote 39] Another 
law sets forth the rights of residential and commercial tenants 
displaced by urban redevelopment in New York City.[Footnote 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. 

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: 

[See PDF for image] 

Sources: GAO (analysis); Art Explosion (image). 

[End of figure] 

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. § 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.[Footnote 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.[Footnote 42] 
The STIP also requires states to provide interested parties with a 
reasonable opportunity to comment on the proposed program.[Footnote 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. 

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.[Footnote 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. 

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.[Footnote 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. 

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.[Footnote 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).[Footnote 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. 

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: 

* 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); 

* 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;[Footnote 48] 

* 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: 

* 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. 

In Cases We Reviewed, Conditions of Condemned Property Varied: 

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.[Footnote 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.[Footnote 
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. 

Blight Designations May Be Broadly Construed and Affect Nonblighted 
Properties: 

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. 

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.[Footnote 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.[Footnote 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. 

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

[See PDF for image] 

Sources: GAO (analysis); Art Explosion (map). 

[End of figure] 

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.[Footnote 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.[Footnote 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. 

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.[Footnote 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.[Footnote 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.[Footnote 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. 

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.[Footnote 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. 

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 [Hyperlink, http://www.gao.gov]. 

If you or your staff have any questions regarding this report, please 
contact me at (202) 512-8678 or shearw@gao.gov. 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. 

Signed by: 

William B. Shear: 
Director, Financial Markets and Community Investment: 

[End of section] 

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.[Footnote 59] 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.[Footnote 60] We requested that each organization 
provide at least 5 different projects within each of the 10 states we 
selected for review. 

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.[Footnote 61] 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. 

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.[Footnote 62] 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. 

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.[Footnote 63] 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.[Footnote 64] 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. 

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. 

[End of section] 

Appendix II: GAO Contacts and Staff Acknowledgments: 

GAO Contact: 

William B. Shear, (202) 512-8678 or shearw@gao.gov: 

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. 

FOOTNOTES 

[1] 545 U.S. 469 (2005). 

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

[3] For 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. 

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

[5] Authorities 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. 

[6] 1-1 Nichols on Eminent Domain § 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"). 

[7] 545 U.S. 469 (2005). 

[8] See 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). 

[9] Pub. L. No. 91-646, 84 Stat. 1894 (Jan. 2, 1971) codified at 42 
U.S.C. §§ 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. § 4601(4). 

[10] In 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. 

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

[12] According 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. 

[13] According 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. 

[14] The 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. 

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

[16] We 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. 

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

[18] Mass Gen. Laws ch. 33, § 126. 

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

[20] The 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)). 

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

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

[23] According 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. 

[24] The 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. § 4622(a). However, the amount permitted to be paid for 
reestablishment is limited to $10,000. 42 U.S.C. § 4622(a)(4). 

[25] The 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. § 4622(c). 

[26] The 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. § 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. § 4633(a)(1). 

[27] U.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. 

[28] 70 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. 

[29] 42 U.S.C. § 4622(a)(4) and (c). 

[30] Cal. Pub. Res. Code div. 13. 

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

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

[33] 65 Ill. Comp. Stat. 5/11-11-1. 

[34] N.Y. Em. Dom. Proc. Law §§ 101, 104 and 501. 

[35] Cal. Civ. Proc. Code pt. 3, tit. 7; Cal. Gov't. Code § 7260 et 
seq; and Cal. Code Regs. tit. 25, § 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, § 6018. 

[36] Cal. Code Regs. tit. 25, § 6002. 

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

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

[39] New York City Charter § 197-c. 

[40] 28 RCNY § 18-04. 

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

[42] 23 U.S.C. § 135(f)(3). 

[43] 23 U.S.C. § 135(g)(3). 

[44] Cal. Civ. Proc. Code § 1263.320(a). 

[45] Prior 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. 

[46] 28 RCNY 18-04(b). 

[47] 42 U.S.C. § 4601(6)(A). 

[48] The URA limits this payment to $22,500. 42 U.S.C. §4623(a)(1). 

[49] Officials 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. 

[50] Utah Code Ann. § 13-42-101-206. 

[51] 7-2 Nichols on Eminent Domain § 2.04 (2006). 

[52] The 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. 

[53] In 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. 

[54] The 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. 

[55] New 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). 

[56] Id. at 52. 

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

[58] Ohio 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. 

[59] We 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. 

[60] We 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. 

[61] We 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. 

[62] To 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. 

[63] The period covers approximately 1 year after the Kelo decision. 

[64] In 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. 

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