Eminent Domain: Information about Its Uses and Effect on Property Owners and Communities Is Limited
Published: 2006-11-30T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: 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.
section_title: What GAO Found
paragraphs: 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.

section_title: Letter
paragraphs: 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. 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. 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.
subsections: section_title: Background
paragraphs: 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. 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.  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. 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. 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.
section_title: 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
paragraphs: 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.
subsections: section_title: National Organizations, State Agencies, and City Officials Cited Various Purposes for Using Eminent Domain
paragraphs: 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. 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. 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. 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. 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. 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.
section_title: No Aggregate Data Exist on the Number of Instances and Purposes for which Eminent Domain Was Used
paragraphs: 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.  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. 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. 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.  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.
section_title: Although Many Laws Govern Land Acquisition, Including Eminent Domain Use, Common Practices Exist Nationwide
paragraphs: 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.
subsections: section_title: Federal and State Governments Set Compensation and Relocation Benefits, but Concerns Exist That Some Payment Limits Are Too Low
paragraphs: 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. 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. 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. 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.
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. 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. 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. 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. In 2005 FHWA made some revisions to the  URA regulations, but the revisions did not raise the cap on  reestablishment payments. Such an increase requires a statutory change.
section_title: State and Local Laws Further Direct Authorities on How to Acquire Land, Including Eminent Domain Use
paragraphs: 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. 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. 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.
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. Provisions in the Illinois Municipal Code  authorize municipalities to take property for redevelopment based on a  blight designation. In New York, the Eminent Domain Procedure Law  sets forth the procedure by which property is acquired and property  owners are compensated. 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. The guidelines are designed to  ensure equitable treatment for persons displaced from a home or business,  reduce related litigation, and require comparable replacement dwellings.  The Colorado Urban Renewal and Eminent Domain Laws contain  procedures for using eminent domain to eliminate or prevent blight or  slum conditions. To govern the relocation of displaced residents,  Maryland, New York, and Washington, like California, have established  laws that provide certain state relocation benefits. 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. Another law sets forth the rights of residential and  commercial tenants displaced by urban redevelopment in New York City.  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.
section_title: Authorities Follow Several Similar Steps in Projects that Can Involve Eminent Domain
paragraphs: 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.
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.
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. The STIP also requires states to provide  interested parties with a reasonable opportunity to comment on the  proposed program. 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.
subsections: section_title: Property Valuation Stage
paragraphs: 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. 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.
section_title: Property Acquisition Stage
paragraphs: 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. 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.
section_title: Relocation Stage
paragraphs: 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. 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). 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;    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.
section_title: Use of Eminent Domain Generates Benefits and Costs Affecting a Wide Array of Community Interests and Individuals
paragraphs: 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.
subsections: section_title: In Cases We Reviewed, Conditions of Condemned Property Varied
paragraphs: 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.
section_title: Characteristics of Selected Redeveloped Areas Varied, with Local and State Officials Often Reporting Resulting Community Benefits
paragraphs: 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.
section_title: Property Owners and Groups Representing Them Reported Negative Effects on Communities from Eminent Domain Use
paragraphs: 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.
section_title: Property Owners and Groups Representing Them Raised Concerns about the Land Acquisition and Eminent Domain Processes
paragraphs: 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.
subsections: section_title: Owners May Not Receive Public Notices and May Have Limited Opportunity to Speak at Public Hearings
paragraphs: 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.
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. 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.
section_title: Blight Designations May Be Broadly Construed and Affect Nonblighted Properties
paragraphs: 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.
section_title: Some Property Owners Claim They Received Insufficient Compensation and Others Faced High Costs to Challenge Condemnation or Compensation
paragraphs: 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.
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.
section_title: Since June 2005, Many State Legislatures Have Enacted Changes to Their Eminent Domain Laws
paragraphs: 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.
subsections: section_title: Slightly More Than Half of All State Legislatures Modified Their Eminent Domain Laws
paragraphs: 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. 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.
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.
subsections: section_title: Procedural Changes
paragraphs: 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.
section_title: Changes in Definitions
paragraphs: 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.
section_title: Several States Had Constitutional Amendments on Fall Ballots
paragraphs: At least six state legislatures approved constitutional amendments on  restricting current eminent domain laws, which were placed on the ballot  for voter consideration. 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. 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.
section_title: Some States or State Associations also Commissioned Studies on the Use of Eminent Domain
paragraphs: 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. 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.
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. 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.
section_title: Observations
paragraphs: 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.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to the Departments of Justice,  Transportation and Housing and Urban Development for their review. The  Department of Transportation provided technical comments, which have  been incorporated where appropriate. The Departments of Justice and  Housing and Urban Development did not have any comments.
We will send copies of this report to the Chairman and Ranking Member,  Subcommittee on Transportation, Treasury, the Judiciary, Housing and  Urban Development, and Related Agencies, Senate Committee on  Appropriations; and the Chairman and Ranking Member, Subcommittee on  Transportation, Treasury, Housing and Urban Development, the Judiciary,  District of Columbia, and Independent Agencies, House Committee on  Appropriations. We also will send copies to the Secretary of Housing and  Urban Development, Secretary of Transportation, and the Attorney  General. We also will make copies available to others upon request. In  addition, the report will be available at no charge on the GAO Web site at  http://www.gao.gov.
If you or your staff have any questions regarding this report, please  contact me at (202) 512-8678 or 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.
section_title: Appendix I: Objectives, Scope and Methodology
paragraphs: 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. 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. 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. 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. 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. 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. 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.
section_title: Appendix II: GAO Contacts and Staff Acknowledgments
subsections: section_title: Acknowledgments
paragraphs: 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.