Edited by Robert F. Salvino Jr., Michael T. Tasto and Gregory M. Randolph
Chapter 7: Does the power to use eminent domain for economic development actually enhance economic development?
[H]ousing will almost never afford a community with the economic development benefits that a commercial application will. If economic development as a sole justification for public use is decided using a rational basis test with deference to local legislative bodies, then the door is left open for local governments to abuse their eminent domain powers and take developable land … National Association of Home Builders and National Association of Realtors. In the aftermath of the U.S. housing crisis, attempts by governments to create economic activity have heightened the debate concerning just and efficient use of government power. The Kelo decision in particular led to a backlash of state legislative action in which 37 states acted to update their eminent domain laws (Lopez et al., 2009). Groups historically supportive of economic development and pro-growth policies recognized the long-term threat to an important foundational principle of economic vitality, that of secure private property rights. The National Association of Home Builders and the National Association of Realtors together filed a brief of amici curiae in support of the homeowners attempting to defend their private property rights against the City of New London, CT (Pickel, 2004). Perhaps more than any other argument, the collective stance of the NAHB and the NAR highlights a clear distinction between the reliance on economic development activities per se and a generalized institutional framework supportive of long-run economic growth.
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