Land Assemblage Problem

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A final concern in the polemical between eminent domain and preservation of private property rights concerns the "just compensation" issue. Landowners are required under the constitution to receive "'just compensation' based on pre-project objective 'fair market value'" (Lehavi, A. & Licht, A. 2007). Fair market value based on the current assessed or appraised value of a property does not incorporate the future value of the proposed project, which would not be realized if for the eminent domain doctrine. As such "the government or third parties involved in the project may enjoy the entire incremental value created by the land assemblage" (Lehavi, A. & Licht, A. 2007). As the eminent domain policy evolves, policy makers will necessarily grapple with the compensation issue as a function of the pragmatic realities of implementing and completing assemblage projects. One interesting solution proposed by scholars Amnon Lehavi and Amir Licht involves the creation of a Special Purpose Development Corporation which would offer the property owners "a choice between receiving pre-project 'fair market value' compensation or pro rata shares in the SPDC; this would make it more likely that compensation is closely linked to the true economic value of the land" (Lehavi, A. & Licht, A. 2007). This type of innovative solution can assist considerably in the difficult proposition of balancing private and public interest.

Land assemblage through the use of eminent domain is a necessary governmental and public policy function designed to spur "innovation, economic growth, and the realization of genuine public preferences" ((Lehavi, A. & Licht, A. 2007). Yet, the concern over invalidating private property rights as in the Kelo case point to the disparate interests which are in conflict in the assemblage and development process. Government cannot have overarching authority to use eminent domain as an excuse to undertake any projects they see fit as defined by "blight" or public good. However, equally an individual or collection of private property owners must not have "de facto monopoly power" (Lehavi, A. & Licht, A. 2007) to vote down a proposal which would allow use of the "land for its more efficient reorganization" (Lehavi, A. & Licht, A. 2007). Of concern as well in the eminent domain debate is the fair compensation issue for individual property owners. As projects continue to expand in their scope as well as financial value, the question of how landowners will be compensated is of paramount importance. Policy officials will continue to balance these concerns, and the disparate interests of private land owners with those of the public good, in an attempt to continually advance the economic and social agenda of urban renewal.


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