Michigan highway construction costs have long been inflated by overly generous
condemnation laws. Current law has allowed developers to buy up land after road alignments
are known, and to receive the appreciated value of the land years later when state
purchases are actually made. This has been a major problem on routes such as M-59.
Landowners should be compensated at land values prior to increases related to the highway
development. In addition, when partial packages are being acquired, the compensation for
the acquired package should be reduced by any increase in value on remaining land that is
due to the new highway project. Attorneys should also be prevented from receiving
excessive compensation related to highway condemnation cases. Currently, attorney fees are
based on the difference between the MDOT appraised value and the actual settlement value
even though MDOT may initially offer more than the appraised value. Changing this
provision to the difference between the initial offer and the settlement value would be a
step in the right direction.
Currently, MDOT has a bill in the final stages of drafting for introduction in the
Legislature. While there are no MDOT estimates available on the potential savings from
this bill, it would seem reasonable to assume a 10% savings on annual land acquisition
costs of $57.5 million, or $5.8 million.