The use of eminent domain has gained national attention recently. But what exactly does eminent domain mean, and how is that power used?
The term “eminent domain” refers to the government’s right to take private property for public purposes. That includes roads, bridges, schools, hospitals, airports, pipelines, water systems, railroads, tollways, and other infrastructure projects. In return for the land taken, the government must pay fair market value for it.
In some cases, cities and counties will offer owners more than the amount needed to satisfy their mortgages. This is called “just compensation.” These offers are often made when a large project like a highway needs to be built quickly.
However, there are situations where the government cannot afford to pay fair market value for a piece of property. For instance, if a flood damages a home, the government may need to buy out the homeowner.
When the government uses its eminent domain powers, it usually pays for the property using tax dollars. However, sometimes the government borrows money from banks and investors to cover the costs.
