- Original bill prohibited eminent domain for private development but left open the blight loophole.
- The following year that loophole was closed.
In the wake of the U.S. Supreme Court’s decision in Kelo v. City of New London, Alabama was the very first state to react legislatively to give its citizens stronger protections against the use of eminent domain for private profit. Senate Bill 68 (2005) specified that eminent domain could not be used for “private retail, office, commercial, industrial, or residential development; or primarily for enhancement of tax revenue; or for transfer to a person, nongovernmental entity, public-private partnership, corporation, or other business entity.” The language was a good start to reforming the state’s eminent domain laws.
But while in one clause the law gave home and small business owners, farmers, and ranchers the substantial protection they deserve, a different clause within the same law gave rise to another threat to citizens’ property rights. SB 68 prohibited cities and counties from using eminent domain for private development or for enhancing tax revenue, but it left an exception for the seizure of so-called blighted properties. This would have allowed property to be condemned under blight law if it might become blighted in the future, or if the property is deemed “obsolescent”—usually a code word for “We’d like to have something else here.” And if the property was condemned for blight, cities could still turn it over to private interests.
House Bill 654 was passed in 2006 to pick up where SB 68 left off, significantly closing the blight loophole by narrowing the criteria by which property could be designated as blighted. Under HB 654, blight designations must be made on a property-by-property basis, which prevents vague and abusive blight designations that cover an entire neighborhood. The criteria to determine blight now ensure that only truly unsafe or neglected properties can be acquired and then given to a private developer.
Alabama has proved to be a national leader in eminent domain reform. It is important to note, however, that statutory reforms are at risk of amendment in future legislative sessions. Alabama has excellent constitutional language prohibiting eminent domain for private use. However, the state’s property owners would be best protected if its constitution also included a traditional, narrow definition of public use.