NCPA - National Center for Policy Analysis

LAND GRABS PUT ENTREPRENEURS, POOR IN DIRE SPOT

May 10, 2010

When government seizes land from private owners to serve a purpose preferred by bureaucrats and big business, it directly harms potential entrepreneurs.  That is the finding of a new report from the Competitive Enterprise Institute.  

According to the report's author Marc Scribner: 

  • The consequences of eminent domain abuse are extremely dire for the low income potential entrepreneur.
  • Local officials lack the knowledge and expertise to effectively promote private development, so their political missteps can keep their localities in poverty by undermining entrepreneurship, and forgo the wealth it would have created.
  • Moreover, takings tend to target lower-income areas which in turn decrease profitable opportunities for low income entrepreneurs disproportionately. 

Eminent domain has been a political hot button issue since 2005, when the U.S. Supreme Court upheld New London, Connecticut's decision to condemn several parcels of residential property using the government's power of eminent domain: 

  • City officials wanted a comprehensive redevelopment plan to support a new research facility of pharmaceutical giant Pfizer.
  • The research facility has since been shuttered, and the increased tax revenue and revitalized river district promoted by city officials did not materialize.
  • Now, the land is home to a large vacant lot.  

The report examines other such scenarios that have played out nationwide, and calls for government to stop abusing eminent domain power and allow market incentives that promote economic development. 

Source Christine Hall, "Land-Grabs Put Entrepreneurs, Poor in Dire Spot," Competitive Enterprise Institute, March 3, 2010. 

For study:

http://cei.org/cei_files/fm/active/0/Marc%20Scribner%20-%20This%20Land%20Ain't%20your%20Land.pdf  

 

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