This first part of a two-part blog series explores a new concept, “inclusionary eminent domain,” that has emerged in real estate development. The concept serves to temper and reconcile the interests of various stakeholders involved in eminent domain takings for economic development. The concept has evolved in response to the 2005 landmark United States Supreme Court ruling in City of New London v. Kelo. The Court upheld long-standing jurisprudence supporting municipalities’ broad power to condemn private property under the Fifth Amendment Takings Clause of the United States Constitution, which states “nor shall private property be taken for public use without just compensation.” In Kelo, the Court found that the City of New London (Connecticut) satisfied the public use standard by giving its power of eminent domain to the New London Development Corporation, a private body, to condemn the entire Fort Trumball neighborhood for the public purpose of economic development.

Nearly a decade has passed since the decision caused a public uproar from all sides of the political spectrum, including a wave of state legislative and state constitutional amendments barring or restricting eminent domain takings. The caveat: most of the restrictions focused on mitigating or barring eminent domain takings for economic development, but left provisions for eminent domain takings for blight removal largely intact. Thus, municipalities could veil their motive for economic development by condemning land under the pre-textual justification of blight removal – even if supported with minimal evidence of actual blight. The post-Kelo restrictions, in essence, did little to mitigate the exclusionary effects of eminent domain takings, thus exacerbating the takings debate in large-scale economic development projects. However, barring the practice outright would have curtailed one of the many important land assembly tools for improving gentrifying urban centers.

The origins of staunch opposition to development projects from residential communities derive from decades of displacement and abuse of eminent domain. Underlying much of the contentious stalemate in urban areas today is the loss of, or diminished access to, affordable housing. In many development projects, affordable housing is the centerpiece of the debate between takings that displace housing and takings that replace housing. However, often times uncompromising opposition to development stalls the public support and cooperation that are critical elements in the success of a developer’s revitalization efforts. The challenge is how to constructively strike the right balance of interests between communities, private developers, municipalities and other stakeholders.

Inclusionary eminent domain serves as a framework that provides multiple legal tools (discussed further in part two of this series) to help guide municipalities, private developers and communities to construct or preserve affordable housing projects in takings for economic development. The tools include Community Benefits Agreements (CBAs), Land Assembly Districts (LADs), Community Development Corporations (CDCs), Land Banks (LABs), Community Land Trusts (CLTs) and Neighborhood Improvement Districts (NIDs). Using these tools provides a transparent model to implement and guide contentious development projects. Inclusionary eminent domain is ultimately another form of public private partnership. Used properly, it can encourage private investment in urban neighborhoods and facilitate community cohesion where all parties work together in planning economic development.

For a comprehensive read on the concept of “inclusionary eminent domain” and its practical toolkit, download the recently published law review article at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2238898  Citation: Gerald S. Dickinson, Inclusionary Eminent Domain, 45 LOY. U. CHI. L.J. 845 (2014).