The road to the 2016 presidential election has been full of twists with outside candidates like Ben Carson and Donald Trump leading the polls for the Republican Party.
As of the time of this posting, Trump is the Republican Party’s frontrunner, and this success is making him a public target. Opponents of Trump are examining his past actions, specifically his use and his policy regarding eminent domain.
As a real estate mogul, Trump has been involved in real estate deals that have tried to use eminent domain. Eminent domain is when the government takes private property even if the owner does not wish to sell, and provides compensation in return. As a general proposition, if the government and owner can’t agree, a judge or jury decides the compensation to be paid (depending on the venue of the case). Trump has attempted to use the power of eminent domain by enlisting the support of governmental agencies to exercise the power on his behalf.
Over the past few weeks, allegations and claims have been made that if Trump is elected president, then he may abuse the power of eminent domain and take the land he wants to advance his real estate empire. After all, the argument goes, if Mr. Trump IS the government, there really wouldn’t be any barrier to his ability to use eminent domain to take whatever property he wants, would there?
The purpose of this article is not to question whether Trump should be president, but to examine if these claims are true. Can the federal government take property through eminent domain and then give it to Trump for his private use?
To answer this question, we need to look at a brief history of eminent domain.
The Fifth Amendment
The Fifth Amendment, along with protecting U.S. citizens from self-incrimination, is also the basis for eminent domain law.
This Amendment allows the government to take private land solely for “public use” and only if “just compensation” is given to the landowner.
Just compensation means that the landowner is supposed to receive fair market value for his property. The monetary value is determined by what the property would sell for if the landowner was not pressured to sell.
According to the Fifth Amendment, Trump would not be able to directly take land from private citizens to construct another building for his real estate empire, as that wouldn’t constitute a “public use.” Right?
Not so fast. A United States Supreme Court case from about 10 years ago blurs the issue a bit.
Kelo v. New City of New London
In 2005, in the landmark case Kelo v. City of New London, the Supreme Court ruled on a controversial case that would allow property to be seized for private commercial development.
The court held that the government could now take private land through the use of eminent domain and then sell it to land developers for commercial use. While the government had been using eminent domain to redevelop so-called “blighted” areas for about 50 years prior to that, the Kelo v. City of New London court ruled that eminent domain could be used solely for the purpose of increasing local property and sales tax revenues. In other words, the Court held that the government could take private property and turn it over to a private developer because the resulting increase in taxes from the new development would amount to a “public use.”
Under this ruling, at least in theory, it is possible for Trump to seize private land on a national scale, then sell it to his own company as long as he pays more in taxes. There are, of course, some serious ethical and conflict of interest issues which arise. But the possibility is at least plausible.
The States Speak Up
Shortly after the Kelo case, 44 states acted to restrain or prohibit the government’s ability to use eminent domain to acquire private land and resell it to private parties.
Although many of the states have spoken up, there is still no national law that prohibits the use of eminent domain for the purpose of turning the property over to a private developer. However, taking private property to turn over to private developers is not typically within the realm of the federal government. Instead, this is a practice in which states and local governments might typically engage.
Therefore, it is unlikely that Trump, if he became president, would be able to acquire land through the use of eminent domain to resell it to his company.
Though Trump has tried to use eminent domain in the past, it is unlikely he will be able to do much on a federal scale now or in the future simply because he might be president. In fact, given the ethical and conflict of interest issues which would arise, his becoming president could conceivably make it less likely that he is able to try to use eminent domain for his own ends.
If you are a property or business owner being affected by eminent domain, you can learn more about your options by giving us a call at 866- EM-Domain.