Governments can take private property if it is needed for a public use, such as a new school, road or other public purpose that benefits the community as a whole.

Government can also take property for private redevelopment, but under the New Jersey Constitution this can only happen in areas deemed to be “blighted.”

When government takes private property for redevelopment, it typically sells or transfers that property to a private developer to build new housing or new businesses. This is a formidable government power that must be used cautiously and only as a last resort.

Unfortunately, New Jersey laws governing the use of eminent domain for private redevelopment are inadequate to protect the rights of tenants and property owners and to prevent abuse.

A recent Public Advocate report  found that when the government misuses this important redevelopment tool, people can lose their homes without real evidence that their neighborhood is blighted, without adequate notice or hearings, and without fair compensation.

Eminent domain abuse has resulted in a growing public distrust of the redevelopment process.

The Public Advocate identified recurring abuses in cases involving the use of eminent domain for private redevelopment. These abuses include:

• Bogus blight designations, based on scant evidence, such as chipping paint, loose gutters or weedy patches;
• Due process deprivations, in which towns fail to provide clear notice to residents that their property may be condemned and do not hold fair hearings, leading owners to seek review in court, where the rules are also stacked against them;
• Inadequate compensation and relocation assistance, leaving people uncertain where and how they will find a new home or launch a new business; and
• Potential conflicts of interest raising questions about whether, in either appearance or reality, public officials stand to benefit personally from the takings they approve.

Although we cannot judge the prevalence of such abuse, we are confident that it is the exception rather than the rule. Many towns pursue redevelopment with respect for the rights of property owners, and courts regularly uphold the use of eminent domain against challenges by property owners. 

Nevertheless, our review of court cases reveals startling injustices. And our review of the statute reveals a system that lacks the basic protections necessary to prevent such injustice.

Thus, property owners are left to seek review in the courts, an expensive undertaking with an uncertain outcome. Most of the courts in the cases we discuss in the report ultimately identified and stopped the abuse.

While the property owners in these cases cannot be described as lucky, most at least won vindication through means that are out of reach for those with more limited resources.

Many property owners lack the resources to engage in expensive litigation with towns. So they simply pack up and move.

Because of these serious problems, the Public Advocate has made eminent domain one of the department's top priorities.

The Public Advocate’s first report  on reforming the use of eminent domain for private redevelopment identified three key elements of needed legislative reform:

• Tighten the definition of “blighted area;”
• Make the process for using eminent domain more fair, open and transparent; and
• Require compensation at a level that allows people to remain in their own communities.

These critical reforms are addressed in a pending bill, A-3257, which passed the state Assembly in 2006 by a vote of 51-18, with endorsements from the governor and the Public Advocate.

Now the Senate must pass a measure that enacts these protections as part of comprehensive eminent domain reform.