This week, Ohio became the latest state to take action to limit the use of eminent domain for economic development purposes:
A bill preventing cities from seizing unblighted land for economic development through 2006 cleared the state legislature easily Wednesday, as lawmakers responded to public concern that a recent U.S. Supreme Court decision could make the practice widespread. The bill, which cleared both the House and Senate unanimously, will go into effect as soon as it is signed by Gov. Bob Taft. Sponsored by State Sen. Tim Grendell, a Chester Township Republican, the legislation creates a 25-person task force to review Ohio’s eminent domain laws in the wake of the high court’s Kelo v. New London decision. In that June 2005 ruling, the court said economic development is a viable “public purpose” under eminent domain law, even when unblighted land is being seized for development that ultimately benefits a company. Eminent domain has traditionally been reserved for such public purposes as roads, schools, military bases, highways or parks. Lakewood, however, gained national attention two years ago when the city threatened to take land for building upscale housing and shops. The 20-acre project, which would have wiped out 700 apartments and 55 houses, collapsed when voters narrowly barred the use of eminent domain.
See Sam Staley’s discussion of the Lakewood situation here, as well as in Reason’s 2005 Annual Privatization Report.