Eminent domain is based on the idea that certain private properties can serve a greater good when put to public use than they can when under their current private ownership. As a result, the use of the term eminent domain refers to the power of government to appropriate privately owned property for public benefit. Public use is considered the greater good under eminent domain.
In the United States, the government's power to exercise eminent domain is restricted by the Fifth Amendment of the U.S. Constitution. The part of the Fifth Amendment which applies to eminent domain states:
"nor shall private property be taken for public use, without just compensation."
The Fifth Amendment adds two important limitations on the government's right to appropriate private property. The first is that private property must be taken for "public use." The second is the private property owners must receive "just compensation" for their property.
Both "public use" and "just compensation" are debated and negotiated by governments and property owners. Court decisions have provided more definition on the meaning of the terms.
Traditionally, public use for the purpose of eminent domain clearly referred to such things as transportation routes, public spaces, and schools. Easements and property for public utilities were also considered public use.
In addition to traditional infrastructure projects, local governments have increasingly recognized eminent domain as a tool to promote economic growth, spur redevelopment, and achieve planning objectives.
As cities and communities encountered economic decline and the degradation of certain neighborhoods, local governments used eminent domain to appropriate private property to revitalize the local economy and increase tax revenues.
This use of eminent domain has sparked controversy as private property that was publicly condemned has ended up back in the hands of private enterprise. Despite this, this use of eminent domain has been reaffirmed in U.S. court decisions such as Kelo vs. City of New London.