Strengthening Private Property Rights

A week and a half ago, an overwhelming majority of the House approved bipartisan legislation asking voters to strengthen North Carolina’s private property rights.

House Bill 271 calls for a referendum to be placed on the 2022 general election ballot proposing a constitutional amendment which would add a new section to the state constitution’s “Declaration of Rights” clarifying and limiting state government’s “eminent domain” authority. The legislation was sponsored by Representatives Dennis Riddell (Alamance), Dean Arp (Union), Steve Tyson (Craven), and Mark Brody (Union).

Eminent domain is the well-established power of sovereign governments to appropriate private property within its own borders for the common good. Eminent domain authority can be exercised (and often is) by all levels of government: state, local, and federal (and in some cases, private persons or corporations which are authorized by these governments to exercise certain functions deemed beneficial to the public) — a process known as “condemnation.” What typically comes to mind when most people think of property being “condemned” under eminent domain is when the government seizes someone’s land in order to build something like a highway, railroad track, courthouse, public school, or border wall.

The kicker with eminent domain, of course, is that if private property is taken by the government for a public use, the person or persons who owned that property must be fairly reimbursed. In other words, the government can’t just come in and take your home or your land without paying you fair market value.

This fundamental protection is enshrined in the United States Constitution, which states in the Fifth Amendment that “private property shall not be taken for public use without just compensation,” referred to as the “Takings Clause.” The principle was first enshrined in the Magna Carta, the cornerstone of modern democracy, which in 1215 forced then King John of England to pay “immediate” payment for property taken by the crown.

While North Carolina already has laws that outline the conditions and processes for exercising its eminent domain authority (North Carolina General Statutes Chapter 40A), those laws are statutory — meaning they could be changed anytime by a future legislature — a legislature that may not be as hospitable to private property rights as is the current one.

This bipartisan measure, if it eventually becomes law and the referendum language is then approved by voters, would write eminent domain protections into North Carolina’s State Constitution by both explicitly requiring “just compensation” and giving property owners the right to a jury trial in condemnation cases — meaning that twelve normal citizens would determine what monetary compensation would be fair when property is taken, and not just a judge.

North Carolina is the only state in the union which currently lacks these constitutional protections.

“This legislation is necessary to prevent overreach of state government into property takings that are not for a public use, but rather benefit private development,” said Representative Riddell after the House approved the measure.

The proposed constitutional amendment is a direct response to the controversial 2005 U.S. Supreme Court decision in Kelo v. City of New London which said that it was permissable for a government to take one private citizen’s land and then give it to another (in the Kelo case, a developer) for the public “benefit” of increasing city revenues by way of increasing property values — simply because the local government believed the second citizen would pay them more taxes. For an excellent plain-language summary of the Kelo decision and an update on its current status, please read “The Little Pink House, 15 Years Later” [Purple, Matt (July 3, 2020), The American Conservative].

Fortunately, the high court left the door open for states to adopt stricter standards in eminent domain cases; that is exactly what House Bill 271 proposes to do for North Carolina. Since 2015 — and because of the Supreme Court’s infamous Kelo decision — 47 other states have enacted stricter eminent domain legislation or passed similar constitutional amendments.

But House Bill 271 is not merely about just compensation: the legislation also establishes a higher standard for North Carolina and its subordinate local governments. State law currently allows for state and local (county and city) governments to take private property “for the public use or benefit.” This bill would strike the vague — and, under our state’s many radical city councils — potentially expansive “benefit” clause, therefore limiting government takings under its eminent domain authority to only those specific cases where there is a “public use.”

“There is no liberty when the government can take your property, or your freedom, without just cause and due process of the highest standards,” added Representative Arp. “We all understand there are some instances where the government may properly, with just compensation, declare eminent domain and take private property. But we do not want that great power of the government to be used to take your property and give it to someone else. That’s why this constitutional amendment is needed for North Carolina.”

The legislation also makes certain changes to existing statutory law outlining the exact purposes for which property may be taken as a “public use” and clarifies the types of construction projects for which private property may be acquired by eminent domain by both public and private condemnors.

House Bill 271 now heads to the Senate, although its consideration — much less its approval — is by no means a certainty. In 2015, the Senate removed an eminent domain amendment approved by the House from a larger package of proposed constititional amendments which were later put on the ballot in 2016; legislation similar to House Bill 271, which was approved overwhelmingly by the House in 2013, failed to receive Senate consideration.

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