January 27, 2014 Article

Planning or Taking? The Project Influence Rule and Inverse Condemnation

Learn about the two tools to recover real estate devaluation caused by government planning

by Dan Biersdorf and Ryan Simatic

Public construction projects take months, years, or even decades of planning.  For example, the location of a new school may be contested or a county may need to thoughtfully study the alignment of a new highway. While government entities prepare for such public projects, a major constitutional concern lurks in the background:  the public acquisition of private property. 

Public entities can and do acquire property for public projects through negotiation. Sometimes a willing seller has the land needed for a project. Other times a public entity will make an offer that changes an unwilling seller’s mind. But often the seller is unwilling to sell or the government is unwilling to offer a price the owner considers fair. In these latter instances, the government will often seize the property by exercising the power of eminent domain in a process called “condemnation.” This seizure of private property is constitutionally limited: To condemn private property, the government must pay “just compensation.” Albert Hanson Lumber Co. v. United States, 261 U.S. 581, 587 (1923).

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