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Eminent domain (or compulsory purchase in the UK) is designed to keep fair market value fair though. Otherwise there is an escalating cost of acquisition for ea

Eminent domain (or compulsory purchase in the UK) is designed to keep fair market value fair though. Otherwise there is an escalating cost of acquisition for each subsequent parcel of land - the cost to abandon the project rises with each previous purchase and every delay caused by an individual seller and the last to sell is in a position to obtain a very substantial surplus over the natural market value, simply because that one asset holds the entire remainder to ransom. This might be natural, unfettered markets in action, but it's also rather close to extortion for my taste.

anthuswilliams 16y ago
It's important to note that the valuation assigned by government appraisers is often well below what the property would be worth on the open market. When I was young, my grandparents were caught up in an eminent domain suit. They were to be paid about two thirds the worth of their home (the worth of their home, in this case, being based on mortgage appraisals[1]). If they had run a business, they would have also had to factor in relocation costs, downtime, etc. Insofar as the seizing body is an interested party, or operates via political pressure from an interested party, the "fair market value" is prone to work in the buyer's favor. [1] - obvious disclaimers - This is anecdotal evidence, and it happened in the 90s. Perhaps there was a tendency amongst lending institutions to inflate their appraisals so as to justify offering loans with higher profit margins. But I still think my point holds.
- eftpotrm 16y ago
  But this is surely an argument for better valuation rather than against the principle of forced sale per se. I'm not at all arguing that people should be forced to surrender for less than the true value, but I'm also well aware (my ex worked in this area) that each and every vendor will have an explanation for why they should get more money than it might seem at first. The customer who needs the land for whatever public good is just as restricted as the person required to sell and the whole point of this system is to ensure the seller gets a fair valuation while the customer isn't at the mercy of vendors gold-plating special cases for why they need more money.

anthuswilliams 16y ago

It's important to note that the valuation assigned by government appraisers is often well below what the property would be worth on the open market. When I was young, my grandparents were caught up in an eminent domain suit. They were to be paid about two thirds the worth of their home (the worth of their home, in this case, being based on mortgage appraisals[1]). If they had run a business, they would have also had to factor in relocation costs, downtime, etc. Insofar as the seizing body is an interested party, or operates via political pressure from an interested party, the "fair market value" is prone to work in the buyer's favor. [1] - obvious disclaimers - This is anecdotal evidence, and it happened in the 90s. Perhaps there was a tendency amongst lending institutions to inflate their appraisals so as to justify offering loans with higher profit margins. But I still think my point holds.

eftpotrm 16y ago
But this is surely an argument for better valuation rather than against the principle of forced sale per se. I'm not at all arguing that people should be forced to surrender for less than the true value, but I'm also well aware (my ex worked in this area) that each and every vendor will have an explanation for why they should get more money than it might seem at first. The customer who needs the land for whatever public good is just as restricted as the person required to sell and the whole point of this system is to ensure the seller gets a fair valuation while the customer isn't at the mercy of vendors gold-plating special cases for why they need more money.