It's called eminent domain. It's explicitly allowed for in the 5th amendment, so long as the property owner gets just compensation.
Neil Boortz explains it better than I could. The following is an excerpt from Neal's Nuze on August 21, 2003:
DRAW THE LINE IN ALABASTER
Freedom means little without property rights. What good is your freedom to use your talents and your willingness to work hard to acquire wealth if your rights to that wealth can be denied at the whim of a few politicians?
After the fall of Soviet Union much was made of their attempt to create economic liberty for the victims of communism. All attempts to create a free, market-based economy in Russia met with only limited success, however, until laws were instituted to insure the property rights of ordinary citizens.
Our law recognizes that that there are times when government must use its police power to seize the property of private citizens. Although the right to eminent domain is not specifically recognized in the U.S. Constitution. In 1879 the Supreme Court, in the case of Boom Co. v. Patterson, (98 U.S. 403) said that eminent domain "appertains to every independent government. It requires no constitutional recognition; it is an attribute of sovereignty." The Fifth Amendment contains the words "'nor shall private property be taken for public use, without just compensation." This is a recognition of the government's right to take private property, and a stipulation that it must be taken for "public use."
OK .. sorry for the legal lesson, now let me tell you what is going on in Alabaster, Alabama. I've been talking about this for two days on my show. Many of you, however, don't hear my show ... so I've decided to donate a good part of today's Nealz Nuze to this situation. What you read should horrify you. You just need to know that this sort of government assault on property rights is not confined to Alabaster, Alabama. It is going on virtually everywhere in this country.
Alabaster is a community of about 24,000 people. Interstate 65 runs through Alabaster. A private developer named Colonial Properties Trust wants to build a shopping center anchored by a Wal-Mart on one of the corners of the I-65 intersection. The trouble is that Colonial doesn't own all of the land they need. A few private land owners have refused to sell their property to Colonial. That, my friends, should be the end of the story. If one private individual wants to own a certain piece of property, but the legal owner of that piece of property doesn't want to sell it, the private property rights of the owner of the real estate should be recognized, and the person trying to buy the property should back off.
Well, that's not the way it's working in Alabaster. Colonial, you see, has some friends in powerful places ... politicians on the Alabaster city council. Colonial has decided to use that one unique government asset, the right to use force, to accomplish something that it cannot accomplish on its own. Colonial is asking the City of Alabaster to use force to seize the property under eminent domain and then sell that property to them, to Colonial, so that plans for the shopping center can proceed.
The politicians of Alabaster, Alabama are only too eager to cooperate.
Next week the City of Alabaster will file the condemnation proceedings in the Shelby County, Alabama courts. The City of Alabaster will try to seize the land under the principle of eminent domain. But wait! Aren't governments supposed to use eminent domain to seize private property only when that property is needed for a public use? How can these politicians take that property away from its owners and then sell it to a private company to build a privately owned shopping center?
Here's what the Alabaster politicians are saying. They claim that they simply cannot collect enough property taxes in their town of 24,000 to pay for all of the government they believe the citizens of Alabaster need. They need some sales taxes. Trouble is, there aren't enough businesses around town to generate the amount of sales taxes these politicians want. The answer? Hey! Let's get a shopping center in town. A shopping center will generate thousands of dollars in sales taxes, and we'll have all that money to spend! What a concept!
So, Alabaster's "public use" excuse is that the current owners of the land simply don't pay enough taxes. The land needs to be seized and turned over to someone who will generate some more tax payments. Those additional taxes can then be spent on the public. There's your "public use."
You do realize, don't you, that this very same excuse can be used by any government entity anywhere in the United States that wants to increase its tax revenues? Let's say that you're sitting fat and happy in a home that has been in your family for generations. You're sitting on about five acres in a prime location near a major city. A local developer wants your property to build a subdivision of cluster-mansions. You don't want to sell. The developer goes to the county commission and tells them that if he had that property he could build at least 15 homes there worth about $600,000 each. The developer correctly points out to the politician that the county could collect thousands of dollars in additional property taxes if he could just get his hands on that land and build those homes. A few weeks passes and one day you get a letter from the county attorney telling you that your property is going to be seized by the county. Their only excuse is that they can get more tax dollars if your five acres had 15 homes than they can with your 60 year-old farmhouse. The "public use?" More tax revenues.
If governments can abuse the concept of eminent domain in this manner then your private property rights are virtually non-existent. You own your home only so long as the local politicians tolerate that ownership. Let some developer come along with a better idea, and you can kiss your dirt goodbye.
What are the citizens of Alabaster saying about the rights of the property owners? Let's check in with Councilman Tommy Ryals. Ryals, who works in the environmental compliance department of Alabama Power, thinks that these property owners are just being greedy. He says "Sometimes the good of the many has to outweigh the greed of the few." Sound familiar? Wasn't it Hillary Clinton who said "We must stop thinking of the individual and start thinking about what is best for society." Private property rights? The rights of the individual? Hey, these are all to be set aside for the good of the collective. I wonder if Tommy Ryals and Hillary Clinton have ever met. I wonder if Mr. Ryals would tell us that the individual has the obligation to make sacrifices for the community, for his fellow man. If so, he wouldn't be the first person to express that belief. Adolf Hitler said the same thing back in 1933.
Yes, I'm invoking some pretty ugly names here in the defense of the property rights of these Alabaster landowners. That's because I'm passionate about the right to property and to the idea that one of the prime directives to government is to protect those property rights, not to destroy them for the economic gain of another. Property rights are the absolute foundation of economic liberty, and property rights are under assault by Colonial and the politicians of Alabaster, Alabama.
Not an isolated case:
This attack on private property isn't only happening in Alabaster, Alabama. Abuse of eminent domain is happening across the country. The City of Jacksonville Beach in Florida is engaged in a wholesale onslaught against a group of private property owners. Their crime is that they haven't developed their property to the pleasure of the local politicians. Multiple properties are set to be seized and turned over to developers friendlier to the dreams and schemes of city leaders..
In New York City the revered New York Times recently used the police power of government to seize an entire block of city property. This block, which contained a number of small family owned business, will now be used for the new New York Times building.
Several groups have been started to fight the abuse of eminent domain by government. One such group is the Castle Coalition which has a document titled "The Top 10 Abuses of Eminent Domain." Here is a synopsis of those top 10 cases:
1. Removing an entire neighborhood and the condemnation of homes for a privately owned and operated office park and other, unspecified uses to complement a nearby Pfizer facility in New London, Connecticut.
2. Approving the condemnation of more than 1,700 buildings and the dislocation of more than 5,000 residents for private commercial and industrial development in Riviera Beach, Florida.
3. A government agency collecting a $56,500 bounty for condemning land in East St. Louis, Illinois, to give to a neighboring racetrack for parking.
4. Replacing a less-expensive car dealership with a BMW dealership in Merriam, Kansas.
5. Condemning a building in Boston just to help the owner break his leases so that the property could be used for a new luxury hotel.
6. Seizing the homes of elderly homeowners in Mississippi and forcing them and their extended families to move in order to transfer the land to Nissan for a new, privately owned car manufacturing plant, despite the fact that the land is not even needed for the project.
7. Taking the building of an elderly widow for casino parking in Las Vegas, claiming it was blighted but without ever even looking at the building.
8. Improperly denying building permits to a church in New Cassel, New York, then condemning the property for private retail as soon as it looked like the church would begin construction.
9. Condemning 83 homes for a new Chrysler plant in Toledo, Ohio, that was supposed to bring jobs but ended up employing less than half the projected number because it is fully automated.
10. Forcing two families (along with their neighbors) to move for a private mall expansion in Hurst, Texas, while spouses were dying of cancer.
You can get the details of all of those eminent domain abuses at the Castle Coalition website: http://www.castlecoalition.org/