Reforming S.C.’s Eminent Domain Law

THE GOVERNMENT CAN TAKE YOUR LAND FOR ALMOST ANY REASON. HERE’S WHAT TO DO ABOUT IT.

In June of 2005 the United States Supreme Court issued its ruling in the now infamous case of Kelo v. New London. In brief, the court ruled in a 5-4 decision that U.S. government bodies could legally seize property under eminent domain law and transfer that property to private interests.

Up to this point government bodies could only seize private property for public use, meaning a public facility – a road, say, or a public park – that all citizens could access and enjoy. In the Kelo decision, however, the court ruled that increased tax revenue from forcefully transferring property from one private owner to another constituted a legitimate public use.

South Carolina’s reformed law

Many were rightfully horrified by this decision. A number of state governments moved to amend their laws and constitutions to clarify that the kind of taking at issue in the Kelo case was not permitted in their state. South Carolina was one of the states that amended its constitution following the Kelo decision. In November of 2006 voters approved an amendment to the constitution that reads:

Article 1 SECTION 13. Taking private property; economic development; remedy of blight.

(A) Except as otherwise provided in this Constitution, private property shall not be taken for private use without the consent of the owner, nor for public use without just compensation being first made for the property. Private property must not be condemned by eminent domain for any purpose or benefit including, but not limited to, the purpose or benefit of economic development, unless the condemnation is for public use.

(B) For the limited purpose of the remedy of blight, the General Assembly may provide by law that private property constituting a danger to the safety and health of the community by reason of lack of ventilation, light, and sanitary facilities, dilapidation, deleterious land use, or any combination of these factors may be condemned by eminent domain without the consent of the owner and put to a public use or private use if just compensation is first made for the property.

This language has received favorable if not outstanding reviews from groups whose stated aim is to protect property rights and/or to fight eminent domain overreach. But while the amendment’s language looks good at first glance, it has potentially consequential problems.

First, although part (A) of the amendment specifies that condemnation via eminent domain may be used only for the purpose of “public use,” the phrase public use has no clear definition in either the South Carolina Code of Laws or the state constitution. In essence, any South Carolina governmental entity, if granted the power of eminent domain, can claim a taking is for “public use.” Whether the argument is valid is up to the courts.

Second, part (B), the “blight” section, leaves a lot to be desired. The definitions of blight, such as lack of light, are extremely vague, and it’s easy to imagine a government agency claiming “blight” for reasons other than public safety. Indeed, the section also allows land condemned for reasons of blight to be put to a private use. This power to transfer land from one private owner to another using eminent domain is precisely what the constitution was supposed to be reformed to prevent.

What to do about it now

The needed reforms are apparent.

There should be a clear constitutional definition of what constitutes public use. The definition would include only projects that are publicly owned and made open and available to all members of the public, such as roads and parks. Any allowance for takings justified by blight should be removed from the constitution.

It’s not unreasonable for municipalities to have the power to demolish a private structure if an expert can certify that the structure is in imminent danger of collapse. Even in such a circumstance, however, demolition of a dangerous structure for reasons of public safety doesn’t warrant the government confiscating the land on which the structure sits. Continued ownership of the underlying land should be guaranteed.

Amending the constitution, however, won’t be enough. A number of eminent domain laws within the South Carolina code will alarm property owners.

Legislators have bestowed the power of eminent domain far and wide within South Carolina’s borders: to all municipalities in the state, as well as to all “state authorities, commissions, boards, or governing bodies” that perform a wide range of functions (developing waterways for the purpose of dam or canal construction, draining flooded lands, producing electric power, improving health conditions in the state, etc.). Moreover, legislators have given these same powers to numerous privately owned entities, including telephone companies, electric lighting and power companies, water supply companies, pipeline companies, and canal companies.

The argument, of course, is that these private companies are actually public utilities and so their takings are justified under “public use.” But it’s unclear why the power to exercise eminent domain should be vested in the companies themselves. Eminent domain is a government power, and any private company (whether a public utility or not) should have the approval of a government body before it can take private land. Similarly, state board or agencies wishing to seize property using eminent domain should have to appeal to a central state government body tasked with determining whether their proposed takings are necessary and appropriate. The larger the number of entities empowered to issue eminent domain condemnation orders, the more we can expect the practice to be abused.

Property rights are the foundation upon which our economic system rests. As property rights grow more secure we can expect the market to operate more efficiently and we can further expect a faster and more stable rate of economic growth. To that end, one of the best ways South Carolina could secure its citizens’ property rights would be to abolish the power of eminent domain altogether. If any entity public or private entity wishes to obtain privately owned property, it should have to pay whatever the current property owners are willing to accept for their property. If the two parties can’t reach an agreement or the current property owner doesn’t wish to sell, then the entity will have to either alter its plans or build around the property.

Neither outcome will mean the end of life as we know it.

Abolition of eminent domain laws should be the goal. In the short term, however, lawmakers should concentrate on making the existing eminent domain law more difficult to abuse.

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