Eminent Domain and Property Rights
Don Boudreaux and David Barron in a WSJ Celebrity Death Match. Boudreaux says,
eminent domain is unnecessary. The fact that housing developers routinely acquire large contiguous plots of land without eminent domain — that is, by buying individual plots from private owners — suggests that government doesn’t need eminent domain to build roads and to do whatever else it does.
To which Barron replies,
The government could build a statewide highway by just bargaining with landowners along the route? What about the owner of the last parcel in the road’s path?
To which Boudreaux comes back,
ingenious strategies exist to avoid the hold-up problem. For example, a buyer can negotiate sales contracts contingent upon the buyer acquiring all necessary parcels of land. With such contracts, no one landowner is ever in a position to hold-out strategically for the full value of the project.
And Barron goes on
But we’ve generally recognized that regulation also can create value in property, and for many decades constitutional law has proceeded from that premise. That’s partly why zoning generally raises no constitutional problem. And why eminent domain shouldn’t either.