The condemnation process

Ian Bertram asked a good question: "... how is the value of land assessed when eminent domain is exercised in the US? Who sets the value, what appeal rights etc exist?"

My return comment was so long that I might as well post it.

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.....I have never been directly involved in a condemnation action, so this is all third hand, but my understanding that in most of the American states the process is something like this:

A duly-empowered PUBLIC body -- say a Port or Park District -- develops a plan for, say, a new Port or a new Park. It designates the boundaries. It approaches each property owner within those boundaries and says that it is implementing the plan and it needs to acquire the owner's property. It does or has already had an appraisal done to determine Fair Market Value for each parcel so it quotes that figure as the purchase price.

The property owner either accepts that figure as truly Fair Market Value or tries to negotiate by hiring his own appraiser to come up with what he thinks is the correct value.

Both parties know that at some price the owner must sell -- that's the whole point, of course, of eminent domain -- to the public body.

If the public agency's appraiser can be persuaded that the new appraisal is more accurate -- perhaps some attribute of the property (such as a good view) had not been considered in the appraisal -- then the sale probably proceeds.

If the parties cannot agree, then the public agency has to bring a court action and there is actually a trial in a court to determine the fair market value. Conceivably that value could be even lower than the public agency's appraisal because I don't believe that the court simply says "Which appraisal is better?" but it can start the valuation process afresh, de novo. So there is some real strategizing to be done by both sides. The agency doesn't want the political fall out of a trial, the dealys etc and the owner may end up getting less than initially offered if he goes to Court.

But bear in mind, I have no direct experience. I do know that it can be a very messy and unfair process and public agencys, though they claim the high moral ground of "the public interest." can nevertheless actually be acting on behalf of (in fact) very private interests. I am not even talking any illegality but simpy the fact that it is well-known that public bureaucracies very often get "captured" by private groups.

Condemnation doesn't (I believe) really take into account the value to (say) an ongoing business of the value of a particular location, much less sentimental value for a homeowner and of course you don't usually see condemnation in rich neighborhoods so the poor usually suffer most.

My defense of eminent domain has never been that it is a good thing but simply that it can be (and some, at least, of its abuses could/should be eliminated) the best of many bad ways to create infrastructure. And for certain public facilities like a road or rail line, I am not even remotely persuaded that some of the Rube Goldberg alternatives which are routinely set forth have any chance of working. So society is stuck with balancing benefit to the majority with trying to be fair to the unwilling seller. It's not pretty; but many of the benefits of our society -- I think the creation of Central Park in NYC involved condemnation -- could not exist without it. So take your choice.

I think that's the gist of it but then again I don't know that much about the mechanics.

Comments

[ian]

Thanks David - the process is slightly different in the UK so when I get the time I wil try and do a similar note to yours. One point which may be relevant however is the difference of terminology.

To me the term 'eminent domain' implies that the state, in whatever form, has a prior claim on the ownership of property if it chooses to exercise it. Am I correct or are we separated by a common language again? In the UK, the term used is 'compulsory purchase' which seems more honest but more importantly isn't based on any assumption about superior rights.

I wonder also if you have any data on how often the powers are used in the US - from the 'noise' about it on the Web, the impression is that it is being used all the time.

[David Sucher]

Ian, I think that you are correct about the hiiden assumption with the term "eminent domain" and I agree that "compulsory purchase" is more straightforward and even more honest.

As to how often it is used, I would say that _every_ governmental purchase has eminent domain behind it. Even if the seller is in fact treated fairly and gets every possible dollar of value, behind this "voluntary" purchase is the knoweldge that the public body can "condemn" the property and compel a sale. So I guess I'd say that it is fairly widespread.

What proportion of such purchases go to court? Interesting question and I have no idea.

[David]

I believe that eminent domain is called 'land take' in the USA.

[David]

David Sucher asks what proportion of compulsory purchases go to court : the answer is less than 5%. The proportion of those who are satisfied with the outcome is less. The court is a charade conducted on the government's behalf, but well supported by the professionals involved.