Though work can be done to create
a statutory, constitutional, and jurisprudential structure that provides a more
just system of compensation for property owners aggrieved by governmental
actions, no system of compensation can perfectly replace the value owners attach
to their property. Property often has a higher value to its current owner than
it may have on the market or in the hands of the public. Because subjective
value is impossible to validate when determining compensation, reforms are
forced to use the more objective “market value” standard. When the government
takes land and is required to pay only the market value, however, the current
owner may not be fully compensated. He may be able to put the land to a higher
use than the present market value dictates, or he may be able to sell his
property rights to others who value the property more than the average person in
the market. This potential buyer may be able to put the property to a higher
alternative use than would be served by the governmental regulation.
An even more threatening situation is when property is
taken for private uses. The one using the state to take the land expropriates
this surplus value, thereby creating a dead-weight economic loss. The price the
owner would be willing to accept to part with his property will often be higher
than the average market indicator. The usefulness of contract is that it
creates individualized determinations of value such that both parties to a
contract benefit from the transaction. Only when the state, or a private party
wishing to employ the power of the state, is forced to bargain with a property
owner for acquiring his property or a use of it, can a more balanced scheme of
compensation occur. In a compensation scheme based on market value, the harm
done to property owners by governmental actions may be diminished, but it will
never be eliminated.
For this reason, among others, responsible policy makers
must not work to correct just our definitions of takings and liberalize the
system of compensation, but must work also to minimize the amount of takings
that actually occur. Property owners can truly be protected only when
governmental actions do not affect their property rights in the first place.
Following the intent of the Framers, a policy maker’s first concern should be to
prevent the state from intruding on private property. Property rights should
not be a secondary concern receiving importance only after fulfilling some other
perceived objective of the state.
A system of restrained regulation will not eliminate
remedies for citizens affected by noxious uses of property. The private law of
torts affords the opportunity for individuals to bring suits under nuisance or
trespass to abate harmful uses of property. Broad based governmental
regulations have co-opted this route. Private regulation, however, is superior
in that it allows for specific and individualized controls that address actual
harms. Returning to a system of greater property rights protections will not,
therefore, allow owners to run roughshod over the community by using their
property in ways that will harm others.
A sound protection of property rights is a fundamental
condition for all other liberties. One’s property defines his sovereign
domain as an individual. The ability to labor and exchange and retain the
fruits of those efforts is a primary condition for autonomy. James Madison
warned, “[A]s a man is said to have a right to his property, he may be equally
said to have a property in his rights. Where an excess of power prevails,
property of no sort is duly respected. No man is safe in his opinions, his
person, his faculties, or his possessions." The excessive growth of the
state’s power to control real property has vital implications for the
citizenry’s liberty in general. This growth must be brought in check if our
property in liberty is to be preserved.
Delineation of property rights in our laws, such as those in the Michigan and federal takings
clauses, were understood to be vital to limiting the expansiveness of the state
and to identifying that zone of liberty which the government cannot intrude.
The government should work toward a system, however, where concerns of
compensation diminish as it chooses to conservatively employ its power to take.
The power of eminent domain is, and was always, meant to be only a power of last