Are you under the impression people are not compensated by eminent domain?

In fact, a huge portion of the sentimental press stores over eminent domain are attempts by homeowners not to cancel the project, but to increase the payouts. Often the homeowners would be quite sad to see the project cancelled, they just want to milk the settlement via litigation.

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sokoloff a day ago | parent | next [-]

I am under the impression that they are not compensated correctly when their land is taken.

I own the land that I do because I value it more than any other buyer/current bidder. (If that weren’t true, I’d sell it to the higher bidder.)

If, instead of bidding an attractive price for my land like an ordinary buyer, you win a court case or political process that says you can force me to sell my land at a “fair market value”, that previous point establishes that I’m being forced to take a loss, as I am being forced to accept a price lower than my reservation price.

At the same time, eminent domain must exist in order to let continuous projects like power lines and highways be built. I just think that 150% or 200% of what is currently called “fair market value” is a better reference price than 100% of it.

The taking of land against the owner’s will should come at a premium, but that premium should be capped rather than unbounded.

	▲	Ajedi32 21 hours ago \| parent \| next [-]
		Yeah this is basically my take as well. The problem with not having eminent domain is that without it, for any project of sufficient size you'll end up with ~100+ land owners who each individually have veto power over the entire project. If 99 of them freely agree to sell, but 1 is really stubborn and refuses to sell at any price, the project is dead. There's also a prisoner's dilemma problem. Maybe it's not a big deal paying one stubborn guy 100x fair market value for his property to allow the project to continue. But if enough people think they can get 100x what their property is worth if they just hold out a bit longer, that also kills the project. Eminent domain solves all this by making it so the project only has to to clear a few bars the government has set for it, rather than the many bars ~100 individual landowners set for it. But in the process it also erodes property rights and kills the built-in protections the free market has to ensure such transactions are fair. A 1.5x or 2x multiplier on the fair market value would help with that a lot and help ensure eminent domain is only used in cases where it's strictly needed. Or alternately, I sort of like the idea of letting the landowners elect someone to represent them in negotiations with the project developer, and then having a chance to vote yes/no on the final cash offer. Then the final price would still be set by a market of sorts, but there'd be no prisoner's dilemma or individual spoilers. Not 100% sure if that would work better or not though; it is a bit more complicated and there are still some issues with it.
	▲	wahern 21 hours ago \| parent \| prev [-]
		Condemnation proceedings are the exception. Most of the time, the entity taking the land under the threat of eminent domain offers substantially above FMV, if only because condemnation proceedings cost money and, more importantly, time. Some states do require above FMV for condemnation, e.g. 120%. After Kelo in the early 2000s, almost every state passed significant eminent domain reform.

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steele a day ago | parent | prev [-]

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