Equitable Market Value: How the Government Cannot Afford the Loss of Black Wealth, Culture, and Joy When Calculating Just Compensation for Eminent Domain Proceedings

I. Introduction

Under the Takings Clause of the Fifth Amendment of the United States Constitution, just compensation equates to the property’s fair market value.^[1] The displacement of African Americans dates back to 1526 and continues to the present day in the United States. The Atlantic Slave Trade, slave auctions, the arguably involuntary Great Depression, redlining, and eminent domain all resulted in the expulsion of African Americans from their land, their home. New case precedent is necessary to acknowledge the African American experience of losing claim to American soil and the “manifest injustice” that eminent domain has forced on the community. Current case precedent states that compensation is a measurement of suitable uses of the property for its environment or what is reasonably expected of the land in its immediate future; however, it does not encompass “imaginary uses” or “speculative schemes” for the property.^[2] Considering this precedent, some scholars challenge the fair market value equation by either expanding the factors to consider when measuring just compensation or presenting alternatives to just compensation, such as “dignity restoration,”^[3] and compensating for the property owner’s mental distress^[4] from losing their land. Other proposals include having property owners and developers communicate directly to collaboratively plan the future of the land,^[5] as well as an option to provide replacement housing^[6] for such landowners to prevent instability. These recommendations are race-neutral and lack attention to the massive disparity African Americans experience in land ownership.^[7]

Eminent domain abuse, especially in communities with a majority of Black property owners, has oppressed Black property ownership, evident through racist history and current practices. The premise of this Note is to raise the bar for just compensation to encompass the full extent of the Black landowner’s losses in the forced sale: their generational wealth, sense of place, and joy. To achieve this option, I suggest African American property owners, undergoing eminent domain, ideally those with a rich cultural tie to their land, such as those with enslaved ancestors, sue the government under the Fifth Amendment’s Due Process Clause to justly retain the wealth, joy, and culture that property bestows to Black communities, under the right to just compensation.^[8] The Supreme Court has acknowledged the impact of eminent domain on particular communities^[9]—an acknowledgment that emboldens the discussion of this Note, which emphasizes that the Supreme Court should revise the fair market definition and calculation to stop the cycle of eminent domain abuse in these communities and address the systematic undervaluation of Black property. This is crucial because of the significance of property to African Americans and the need to fairly compensate this population, given their struggles to claim property, maintain ownership, and find comparable properties to continue building generational wealth. African Americans have lacked stability and the full potential to claim a stake in this country. In the wake of resiliency, Black landowners should be protected from having to leave their property without “just” compensation and discontinue the cycle of disadvantaging African Americans on their journey of liberation from blatant anti-Blackness via policies and laws that keep Black communities oppressed.

Part II surveys the history of “legalized abuse” within the Black land struggle—tracing Supreme Court interpretations of “public use” and the trajectory of Black land ownership in America—to highlight how eminent domain has and continues to be weaponized against Black communities. Part III examines the current limitations of “just compensation,” contending that the “willing seller fiction” and traditional fair market value standards fail to account for the value of generational wealth, joy, and culture attached to property. Part IV argues that a Due Process claim can serve as a procedural vehicle to compel the Supreme Court to address eminent domain abuse in Black communities. This Note posits that discriminatory valuation—which ignores the subjective value of generational wealth, joy, and culture—infringes upon the fundamental right to just compensation. To remedy this, Part IV introduces the “equitable market value,” a reparative valuation theory that incorporates these traditionally excluded elements to truly make the property owner whole. The Note contends that the Court must consider “withintrification”—a resident-led revitalization model—as a less restrictive alternative to the total displacement of Black property owners. This Note concludes in Part V by asserting that the equitable market value is not optional, but a mandatory requirement to meet the constitutional requirement of just compensation.

II. Legalized Abuse: Eminent Domain and the Black Land Struggle

A. Supreme Court Interpretation of “Public Use” and Just Compensation

Eminent domain is “an exercise of the power of government or quasi-government agencies to take private property for public use.”^[10] Or simply put, “eminent domain is the power of the government to take away someone’s private property,” for what they deem a better use.^[11] Eminent domain has origins traced to the Magna Carta of 1215, which limited the King’s power to take property from its owner for public use without compensation.^[12] This law was intended to protect landowners and limit government power.^[13] The United States federal government has expanded its purpose of acquiring property for public use through the Constitution’s Fifth Amendment Takings Clause, which is traditionally used to “facilitate transportation, supply water, construct public buildings, and aid in defense readiness.”^[14] The definition of “public use” is expansive, made possible through the following key cases: Berman v. Parker (1954), Hawaii Housing Authority v. Midkiff (1984), and Kelo v. New London (2005). The Berman, Midkiff, and Kelo cases exemplify how the Supreme Court advances the marketplace value of property by expanding the meaning of public use, further jeopardizing marginalized communities, particularly Black wealth, joy, and culture. The Court’s advancement keeps the Black community subordinate to the benefit of others’ wealth accumulation via property ownership, particularly in economic development takings.

1. Berman v. Parker

In Berman v. Parker,^[15] the Supreme Court determined the District of Columbia Redevelopment Act of 1945 did not violate the Fifth Amendment when authorizing the use of eminent domain in pursuance of a comprehensive plan to eliminate and prevent slums, substandard housing, and blighted areas for the redevelopment. Congress stated that “the acquisition and the assembly of real property and the leasing or sale thereof for redevelopment pursuant to a project area redevelopment plan . . . is hereby declared to be a public use.”^[16] The redevelopment plan included the establishment of new homes, schools, churches, parks, streets, and shopping centers.^[17] The Court said legislative branches, whether Congress or individual state legislatures, have the authority to determine whether communities should be beautiful and sanitary, and it is not the Court’s determination of what housing is desirable or not.^[18] The Court also stated that “[i]f those who govern the District of Columbia decide that the Nation’s Capital should be beautiful as well as sanitary, there is nothing in the Fifth Amendment that stands in the way.”^[19] The Act lacked a definition of slums or blighted areas.^[20]

The appellants in Berman owned a department store within the designated blighted area.^[21] They objected to the appropriation of the property for the project’s purpose of beautification and slum clearance, as the land was commercial property, not slum housing.^[22] The appellants claimed that their property would be taken and put under the management of a private agency to redevelop the property for private use.^[23] They believed their land should not be taken because it did not fit the kind of land targeted, nor should it be transferred to a private entity.^[24] The Court stated that because the redevelopment plan eliminated slums and “blighted areas that tend to produce slums, . . . [p]roperty may, of course, be taken for this redevelopment, which, standing by itself, is innocuous, and unoffending.”^[25] The Court also stated that Supreme Court Justices cannot say that “public ownership is the sole method of promoting the public purposes of community redevelopment projects.”^[26] The power of eminent domain is simply a means to an end, and Congress has the sole power to determine the means of executing a project once the public purpose has been established.^[27] The Court said, “the public end may be as well or better served through an agency of private enterprise than through a department of government—or so the Congress might conclude.”^[28] In Berman, Congress concluded that the public end, beautification and sanitation, was best served by eminent domain, even if it meant that end requires selling the property to private developers.^[29] Just compensation was used to satisfy the rights of the property owners.^[30] Essentially, the word “public use” was transformed to mean “public purpose” in Berman.^[31]

2. Hawaii Housing Authority v. Midkiff

The Supreme Court in Hawaii Housing Authority v. Midkiff found that a justified, rather conceivable, public purpose validates taking property from one person “for the benefit of another private person” via eminent domain with paid compensation.^[32] The Court gave deference to the legislature in determining what is public use “unless the use be palpably without reasonable foundation.”^[33] The Hawaii legislature created the Land Reform Act of 1967 to “reduce the perceived social and economic evils of a land oligopoly traceable to their monarchs,” said to be a practice of a State’s police powers.^[34] The Act authorizes the Hawaii Housing Authority (“HHA”) to condemn lots where many people want to buy but cannot purchase land at fair prices.^[35] The HHA could “limit the number of lots any one tenant can purchase and . . . use public funds to ensure that the market dilution goals will be achieved” to correct the “market failure.”^[36] The Act allowed for the condemnation of residential tracts and the sale of land titles from the HHA to the existing lessees after compensating the lessor to reduce the concentration of fee simple ownership in Hawaii.^[37] Here, the private taking of property was a legitimate purpose of government because it attacked the “certain perceived [evil] of concentrated property ownership”; therefore, using condemnation power was rational.^[38] The Supreme Court made it clear that “[it] is not essential that the entire community, nor even a considerable portion, . . . directly enjoy or participate in any improvement in order [for it] to constitute a public use.”^[39]

3. Kelo v. New London

The Supreme Court did not find an illegitimate purpose in condemning residential property to transfer it to a private party for economic revitalization for the broader public in Kelo v. New London.^[40] The City of New London approved a development plan to “create in excess of 1,000 jobs to increase tax and other revenues, and to revitalize an economically distressed city.”^[41] The city wanted to transfer the land to a private nonprofit organization, New London Development Corporation, for the land to be developed as a new Pfizer facility, to increase tax revenue, and provide jobs.^[42] Susette Kelo, amongst other local property owners, refused to sell their land.^[43] The State claimed that taking the land was a “public use” and in the “public interest.”^[44] Therefore, their properties were condemned only because they were located in the development area, not because they were blighted or in poor condition, like the property targeted in Berman, nor did the development plan address “certain perceived evils of concentrated property ownership” as in Midkiff.^[45]

The majority opinion acknowledged that the dissenting judges called for a heightened standard of judicial review for economic development takings.^[46] In Justice Clarence Thomas’s dissent, he discussed how the definition of “public use” has strayed from the natural reading, “that the government may take property only if it actually uses or gives the public a legal right to use the property.”^[47] Justice Thomas, in referencing the landmark case United States v. Carolene Product Company, stated that the justification for intrusive review is to protect “discrete and insular minorities,”^[48] which should align in principle with the Public Use Clause, meant to protect “powerless groups and individuals.”^[49]

Although the question of just compensation was not before the Court, the majority’s opinion understood that just compensation would not “minimize the hardship condemnations may entail.”^[50] Such hardship includes emotional injuries and social distress that “can stem from difficulty in finding a new residence, sentimental attachment to the property, and questionable usefulness of the property to the community.”^[51] Justice Thomas dissenting states that “[s]o-called ‘urban renewal’ programs provide some compensation for the property they take, but no compensation is possible for the subjective value of such land to the individual displaced and the indignity inflicted by those uprooting them from their homes.”^[52] Such takings for public purposes disproportionally fall on poor communities and those least politically powerful.^[53] Justice Thomas supported his point when citing Berman v. Parker in his acknowledgment of “Negro Removal.”^[54] During the time of Berman, “urban renewal” meant “Negro removal.”^[55] Over 97% of persons in Project Area B, the project of concern in Southwest Washington, D.C., were African American or Black, referred to as “Negroes” in the Berman opinion, were ultimately forcibly removed when the Court upheld the project.^[56] Justice Thomas predicted that the decision would exacerbate such effects on African Americans.^[57] Institutional racism has historically forcibly detached African Americans from their property, resulting in the loss of their wealth, culture, and joy, with one of the early displacements of Black people in America being the promise of “40 Acres and a Mule.”

B. Pawns of War: 40 Acres and a Mule

On January 12, 1865, General William T. Sherman and Secretary of War Edwin M. Stanton met with twenty ministers and asked them: “What do you want for your own people?”^[58] They said, land to establish themselves.^[59] The order identified 400,000 acres of land in South Carolina, Georgia, and Florida.^[60] The land was intended for a Blacks-only settlement, and Sherman later promised to loan mules to the settlers.^[61] In the fall of 1865, President Andrew Johnson overturned the order, which returned the land to the previous white landowners who supported the Confederacy; the action displaced tens of thousands of Black settlers resulting in the white landowners driving away Black property owners with guns and federal troops forcefully evicting others.^[62] About two thousand African Americans retained their land and worked the land, as initially envisioned by the twenty ministers.^[63] The dispossession of land from African Americans is a cycle rooted in the legacy of chattel slavery, where the denial of ownership was a core tenet of enslavement. After emancipation, this struggle to build and retain land-based establishments continued through a combination of violence, discriminatory policies, and exploitation.

C. The Peak and Fall of Black Land Ownership

Black land ownership peaked in the early twentieth century, with approximately fifteen to sixteen million acres of land accumulated between 1865 and 1919.^[64] Much of that land was owned by farmers.^[65] African Americans acquired land in various ways during this period. They “leveraged relationships with white landowners, squatted on unused land, and saved hard-earned ‘Sunday money’ (extra wage labor done on the weekends) for a piece of land to call their own.”^[66] Also, the Homestead Acts, mainly the Southern Homestead Act of 1866, helped more recently emancipated enslaved persons acquire land.^[67]

1. Homestead Acts

However, the Homestead Acts of 1862 and 1866 did not catalyze Black land ownership. President Abraham Lincoln signed the first Homestead Act of 1862, which offered citizens public land to cultivate.^[68] Some African Americans, as early as 1865, had success homesteading in the Great Plains under the first Homestead Act.^[69] The Homestead Act offered hope to those seeking a fresh start and to be regarded as landowners.^[70] The Southern Homestead Act of 1866 encouraged land ownership for freed slaves and poor whites.^[71] The latter act offered forty-six million acres of public land in the American South: Alabama, Mississippi, Louisiana, Arkansas, and Florida.^[72] The 1866 Act actually hindered land ownership for the formerly enslaved because the reserved land was “mostly swampy, poorly drained, and unsuitable for settlement without large expenditures, all of which were major deterrents to homesteading.”^[73] Less than six thousand African Americans were successfully homesteaded by 1876 out of the nearly four million freed African Americans at the time of emancipation.^[74] The 1866 Act was repealed at the end of the Reconstruction Era in 1876, while the 1862 Act lasted until 1976.^[75]

2. The Decline of the American Dream

The American Dream is anchored in ownership, particularly property ownership. As of 2022, African Americans wholly own 1.1 million acres of land.^[76] The legal system, amongst other factors like white violence, harmed Black landowners through estate planning, partition sales, the Torrens Act, and tax sales.^[77] The failure to write wills, which often control land passage via heirs’ property law, led to the loss of much Black-owned land.^[78] And white developers prey on families by using the Torrens Act to prompt partition sales amongst relatives.^[79] Partition sales occur when one property owner wants to sell while the others refuse—by filing a partition action; the sale is forced.^[80] The Torrens Act, upheld in North Carolina and other states with their own versions, allows “an adverse possessor [to] claim ownership of a land parcel when one physically ‘possesse[s] the property under known and visible lines and boundaries adversely to all other persons for 20 years; and such possession so held gives a title in fee to the possessor, in such property, against all persons not under disability.’”^[81] The Torrens Act is meant to settle “muddled” titles, and various versions have been adopted in several states.^[82] This process does not require the adverse possession claim to go through the traditional judicial proceeding, meaning none of the other family members are informed that they lost their land.^[83] Additionally, some owners on fixed income who could not afford high annual property taxes had their properties auctioned off through tax sales upon default.^[84]

D. The Problem: Eminent Domain Abuse in Black Communities

Urban renewal displaced African Americans at a disproportionate rate.^[85] The following stories are examples of eminent domain abuse against Black property owners. Eminent domain abuse occurs “when the government or its entities seize private property for purposes other than genuine public use or fail to provide fair compensation to the property owner.”^[86] Such abuses are exemplified when property is taken for private benefit—property owners are inadequately compensated, denied due process, or targeted based on their protected status, such as race (described as arbitrary or discriminatory takings).^[87]

A prominent historical example of a discriminatory taking is the seizure of Bruce’s Beach. In 1912, Willa Bruce and Charles A. Bruce owned a Black beach resort, Bruce’s Beach,^[88] located in Manhattan Beach, Los Angeles County, California.^[89] After experiencing racial violence from white landowners, their property was condemned because of “community animus and racial intolerance” under the guise of proposed park that never manifested on their former property.^[90] Willa and Charles Bruce died in poverty^[91]—working as cooks in someone else’s restaurant with Willa losing her mind from the stress of it all—and their grandson Bernard Bruce spent decades fighting to restore the family’s legacy, dying of Covid-19 in January 2021, eighteen months before the County of Los Angeles returned the land to their great-grandsons, Marcus and Derrick Bruce, who subsequently sold it back to the County for nearly $20 million.^[92] Attorney George Fatheree III stated that the descendants of the Bruces were robbed of their birthright to the land that their ancestors set up for them.^[93] The implications of this decision are examined in Part III.D, infra.

In the 1960s, a Black community within Newport News, Virginia, lost most of its homes so the city could intentionally build and expand Christopher Newport University to extinguish the Black community’s desire to expand their neighborhood along the Shoe Lane area.^[94] The Shoe Lane Community encompassed a church, farmland, and around twenty Black families.^[95] Residents had jobs as teachers, dentists, a high school principal, and an engineer at the National Aeronautics and Space Administration (“NASA”).^[96] The Newport News City Council disregarded homeowners’ and civil rights advocates’ protests, which. Included suggestions for more suitable and less expensive sites for the college.^[97] The city council paid property owners 20% less than what an independent appraiser valued.^[98] Previous Black property owners, James and Barbara Johnson, have files and photo albums; one album is titled “The Demise of a Community,” and depicts what the Shoe Lane community used to be and might have become.^[99] The true measure of racial harm lies not just in what happened, but in all that was prevented. Christopher Newport University’s all-white status, until 1965,^[100] was the physical manifestation of the absence and disregard of Black wealth, joy, and culture.

The town of Lakeland was incorporated into College Park, Maryland, despite the ,majority of residents’ opposition and their suspicion that it was a political move to take their land to expand the university.^[101] Most Lakeland residents voted against the merger, with 173 votes against it and 9 votes for it.^[102] A Department of Housing and Urban Development (“HUD”) urban renewal project, supported by the city council and the University of Maryland-College Park, demolished 104 of 150 homes, including the east side of Lakeland, which is now a man-made lake.^[103]

The legislature has great deference in eminent domain proceedings by delineating what constitutes public use, and these historical incidents support the prevalence of discrimination in property takings that led to the loss of Black wealth in Bruce’s Beach, Newport News, and Lakeland. Eradicating eminent domain pursued against marginalized populations would be a challenging case to make if the purpose adheres to a narrow meaning of public use. The Supreme Court cases, Berman, Midkiff, and Kelo, have exemplified how expansive “public use” is to qualify a property for eminent domain, originating as government-promoted projects such as clearing space to develop trainways and highways, to clearing the way for private developments. There needs to be heightened scrutiny of what is “public use” to control the taking of property, especially when just compensation is not sufficient for the loss of Black wealth, joy, and culture.

The following argument examines the fair market equation. The majority opinion in Kelo already acknowledged that just compensation may not be sufficient to compensate for hardship, thereby raising the question of whether fair market value constitutes “just” compensation.^[104] Expanding just compensation is an avenue to prevent more incidents of eminent domain abuse against Black property owners. If the compensation amount is inadequate, the taking of property would be unconstitutional, preventing a court from allowing the eminent domain proceeding to successfully take and save another property owner from hardship.

III. The Limits of Just Compensation: Takings, Fair Market Value, and Subjective Value

Just compensation is used to acknowledge and justify the involuntary dispossession of one’s property, partially or entirely, by the government for public use, which is legally referred to as a taking. The following section will discuss: (A) what a taking is and what economic development takings are; (B) how the Supreme Court interprets fair market value; (C) how fair market value is calculated; and (D) the failure to “justly” compensate African American property owners.

A. Takings: The Requirement of Just Compensation

The Supreme Court has “invariably found a taking” when “faced with a constitutional challenge to a permanent physical occupation of real property”^[105] There are two types of takings: possessory and regulatory.^[106] Possessory takings, or physical takings, occur where the “government confiscates or occupies property.”^[107] Possessory takings can consist of a seizure of portions of land, a seizure of land in its entirety, or creation of an easement.^[108] An easement is “a legal right that gives its holder a non-ownership interest in land that someone else owns.”^[109] Regulatory takings occur “when government regulation leaves no reasonable economically viable use of the property.”^[110]

1. Economic Development Takings Displaces Black Community for Corporate Gain

Economic development takings occur “when the government condemns property through the power of eminent domain and then transfers that property to a new private owner, citing the possibility of ‘economic development’ as the sole justification,” which can include uses such as improvement to the local economy, increased employment, and increased tax revenue.^[111] This subsection illustrates and discusses economic development takings against landowners, beginning with a Black community at risk of losing their land in Tennessee, currently.

Ford Motor Company is venturing to create its BlueOval City, “an automotive manufacturing ecosystem,” in Tennessee.^[112] BlueOval City is a $5.6 billion campus in Stanton, Haywood County, Tennessee, for battery and electric vehicle manufacturing, projected to employ six thousand people, on land previously owned by the State of Tennessee.^[113] The Tennessee Department of Transportation is looking to construct road connections in the surrounding counties of Haywood, Tipton, and Fayette using eminent domain because the commuter and freight traffic is anticipated to increase when the project is fully developed and operational.^[114] Eminent domain has been historically used to create the highway system we know today, as the Federal Aid Highway Act of 1956 routed highways through Black and brown neighborhoods, sometimes intentionally, displacing residents and seizing their homes.^[115] The development of BlueOval City is an example of current-day eminent domain attempts to take entire plots or portions of Black-owned land for private use.

Rosa Whitmore-Miller, a Black landowner in Stanton, Tennessee, was initially offered $8,000 for the farmland her family purchased in 1958—Rosa and her ten siblings worked on the farm to pay off the property and rent it to a local farmer.^[116] Another family in Stanton, the Sanderlins, whose ten acres of land is in the path connecting the BlueOval City to the interstate, received a state land appraisal letter stating each acre was worth between $3,500 and $10,000.^[117] The family was offered the lower end of the scale at a total of $35,000 for all ten acres, of which two of the acres host their timber business that saved them through a rough farming period.^[118] Haywood County is the only affected county that has a majority Black population,^[119] but it also has a rich history between Black people and land ownership. For example, the Haywood County Farm Project, a federal Farm Security Administration initiative, provided African American residents with small rental farms and the option to buy between 1939 and 1940.^[120] Thirty-nine families participated in the project.^[121] Farmland represented more than just a material asset or income, but a “means of self-determination, self-sufficiency, and a foundation for economic and political power” to Black families.^[122] The value of land should not be limited to its physical worth.

Residents have recognized the current and future impacts of BlueOval City’s development, including rising housing costs, environmental concerns regarding water and air quality, and “predatory land grabs in historically [B]lack agricultural communities.”^[123] Black property owners across the three counties, especially Haywood County, are set to lose not only their physical land, but also the stability and heritage their land provides as the government seeks to undermine another federal government project meant to empower Black residents. The State of Tennessee and Ford Motor Company should find a different route to create access into BlueOval City before it becomes fully operational, by improving the current transit network to accomodate the anticipated traffic growth and considering the environmental impact on the health of nearby residents and the surrounding land.

Tennessee is one of many states that have not banned economic development takings. However, the State of Michigan amended its state constitution to limit economic development takings after permitting such takings in Poletown Neighborhood Council v. Detroit (1981) and overturing that very ruling in County of Wayne v. Hathcock (2004).^[124] The Michigan Supreme Court ruled that the court must inspect with heightened scrutiny what is required for claims where the public interest is the predominant interest being advanced in condemnation power.^[125] The Michigan constitutional requirement of “‘public use’ . . . prohibit[s] the state from transferring condemned property to private entities for a private use.”^[126] The Michigan Supreme Court, in Hathcock, found that the condemnation in Poletown was unconstitutional as the condemnation benefited General Motors, a private entity, which outweighed public use.^[127] The court found that the transfer of condemned property to a private entity is appropriate in one of the three following situations:

(1) [W]here public necessity of the extreme sort requires collective action; (2) where the property remains subject to public oversight after transfer to a private entity; and (3) where the property is selected because of facts of independent public significance, rather than the interests of the private entity to which the property is eventually transferred.^[128]

Like many other states, Michigan’s constitution still leaves a “loophole” for blighted areas to be vulnerable to economic development takings.^[129] Blight is often a trigger word for urban renewal.^[130] James Baldwin said, “urban renewal means negro removal,” and Justice Thomas acknowledged this in Kelo.^[131] The Institute for Justice found that cities usually target communities of color with lower levels of income and education for condemnations, “as government officials know the residents there rarely have the political clout or the financial means to fight back.”^[132] More protection is needed for Black communities, especially those susceptible to condemnations and in the path of economic development plans often not meant to primarily benefit them. This can be done by finding that the enforcement of eminent domain against Black communities is discriminatory. In addition to a discriminatory finding, Black property owners constitute “discrete and insular minorities,” which would require the U.S. government to provide more just compensation that accounts for both the history of Black land loss and the value of property to Black people beyond fair market value.

B. Defining "Just Compensation: The Willing Seller Fiction and the Exclusion of Compensating for Intangible Value

The Supreme Court found just compensation to be the standard fair market value.^[133] Fair market value is the “price which property will bring when offered by a willing seller to a willing buyer, neither obligated to buy or sell,” which is contradictory in nature, as eminent domain proceedings are literal forced sales.^[134] The Supreme Court of the United States affirmed the Supreme Court of Oklahoma’s use of the willing buyer and seller hypothetical to define fair market value with consideration of “all purposes, present and prospective, for which the land was adapted and might in reason be applied.”^[135] “The owner is to be put in the same position monetarily as he would have occupied if his property had not been taken,”^[136] and given the “fair market value of the property at the time of the taking.”^[137] Compensation is a measurement of suitable uses of the property to its environment or what is reasonably expected of the land in its immediate future; however, it does not encompass imaginary or speculative potential plans of use.^[138] Just compensation can also be alternatively measured “when market value is too difficult to find, or when its application would result in manifest injustice to owner or public.”^[139]

The Court in United States v. Commodities Trading Corporation raised the question: “What compensation is ‘just’ both to an owner whose property is taken and to the public that must pay the bill?”^[140] The undervaluation of the Black land loss crisis hinders Black wealth growth and leads to the loss of joy and culture for displaced Black owners.^[141] This represents an injustice, and the cost of just compensation is too high for the public to afford.

C. A Flawed Standard: How Traditional Property Valuation Undermines Black Property Ownership

There are four options to determine fair market value: selling price or cost, sales of comparable assets, appraised value, or price per square foot.^[142] An agreed price between a willing buyer and seller is based on the parties’ “reasonable knowledge of the property and current market trends.”^[143] This method is hypothetical, as eminent domain is a forced sale, triggered specifically because the property owner is not a willing participant in the land transaction. Comparable assets are incorporated into a comparative market analysis in which the property is compared to similar properties, often recently sold.^[144] Homes in Black neighborhoods are undervalued by 21–23% compared to their value if they were in non-Black neighborhoods.^[145] The cycle of undervaluing homes diminishes the wealth-building power of homeownership by creating a barrier to profit in voluntary sales and underestimates the true fair market value if the valuation of the home is already low.^[146]

Land appraisal is a “professional assessment of the value of a piece of land.”^[147] A land appraiser considers several factors when determining the value of land, such as the property’s location, size, shape, zoning, land use regulations, access, topography, environment, market conditions, legal and regulatory issues, and potential for development or use.^[148] Appraisers may use a sales comparison approach (comparable asset valuation), an income approach for income-generating properties, or the land residual technique, which includes subtracting the development cost from the projected sales value.^[149] Homes in majority Black neighborhoods are appraised 15% lower in value than neighborhoods with a 1% Black population.^[150] To calculate the price per square foot, divide the selling price by a comparable property’s square footage, then add all the square footage rates for each similar property and divide that number by the number of comparable properties assessed to yield the average rate per square foot for the property in question.^[151] Next, multiply that average rate by the total square footage to determine the property’s fair market value.^[152]

Comparable market analysis is the traditional option for determining fair market value.^[153] However, fair market value cannot truly be accurate because there is a strong presumption that property valuation derived from a comparable market analysis, land appraisal, and price per square foot is undervalued, given that land in Black neighborhoods is undervalued.

D. The Failure to Justly Compensate for Joy and Culture Attached to Property

Regardless of how fair market value is calculated, just compensation will always be an inaccurate analysis of actual value of Black land because it is dependent on a biased valuation. Professor Ilya Somin, a professor of law at George Mason’s Antonin Scalia Law School, wrote:

Undercompensation is particularly likely in the case of “low value” properties of the kind often occupied by poor minority group members. Even when fair market value compensation is paid, owners are still not compensated for losing the “subjective value” they attach to their property over and above its market valuation. Subjective value includes such elements as community ties and business good will that are often lost when victims of eminent domain are forced to move their homes or businesses.^[154]

The closing and taking of Bruce’s Beach exemplify the impact that the loss of subjective value has on the Black community. In February 1912, Willa A. and Charles Bruce bought a 33-foot by 100-foot plot of land along the Manhattan Beach coastline for $1,225;^[155] in 1920, they purchased an adjacent lot.^[156] The couple, with their son, fled west to California from New Mexico and were one generation distant from slavery in hopes of the American Dream.^[157] Amid Jim Crow, the Bruces established a Black-only beach resort on their land—open to Black beachgoers as a space to dine, swim, and socialize.^[158] The Bruce Beach Front establishment symbolized Black wealth and prosperity, representing a disruption of the white-majority neighborhood. White neighbors surrounding the resort had to witness Black joy, even under the existing segregation of beaches, and responded with harassment and Ku Klux Klan violence.^[159]

After twelve years, the threat of eminent domain would affect the co-existence of a cultivated Black space and white agitation. In 1924, the Manhattan Beach City Council voted to seize Bruce Beach and surrounding lots, including four other Black-owned properties totaling thirty lots, to build a park on the soon-acquired land.^[160] The pressure to condemn the resort came from racist white residents and a petition from local white real estate agents and civic leaders to force the Bruces to give up their property.^[161] After a lengthy battle to stay in Manhattan Beach, Willa A. and Charles Bruce valued their property at $70,000 and asked for an additional $50,000 for damages because they could not buy any other property in Manhattan Beach.^[162] The family was given $14,500 as “just” compensation in 1929 and left town.^[163] Willa A. and Charles Bruce died in poverty, and their entire family moved out of Los Angeles County.^[164] The Black community fought for the dream that the Bruces worked for: a haven to enjoy the ocean. In 1927, the National Association for the Advancement of Colored People organized a “swim-in,” one of several peaceful protests, in response to the exclusionary practices on the shoreline of Manhattan Beach.^[165] Due to the protests, the city ended an illegal lease between the Board of Trustees and Oscar Bessonette, a local businessman, on the land that provided access to the beach, which was intended to help “keep out undesirable visitors,” later admitted to keep Black people off the beach.^[166] Bruce Beach Front was more than a business; it was an inclusive venue for Black beachgoers in the time of Jim Crow, a haven to enjoy the ocean.

IV. From Footnote to Holding: How a Due Process Claim Can Compel SCOTUS to Address Eminent Domain Disparities

The current definition of just compensation, fair market value of property at the time of the taking, under the Fifth Amendment, is not truly a “just” remedy when taking property from African American owners. Former President Barack Obama once said, “[o]ur Constitution places the ownership of private property at the very heart of our system of liberty.”^[167] African American property owners have endured a centuries-long struggle to obtain and maintain property, as discussed in Part II. This Note further argues that subjective value should be required to calculate just compensation for African American property owners to make redress genuinely equitable. A due process claim that values life, liberty, and property could require the Supreme Court to respond to their predictions of eminent domain abuse, and the inadequate compensation of value given to “discrete and insular minorities” without leaving such legal conflict to simmer in dissenting opinions and footnotes.^[168] This would compel legislatures and government actors to cautiously consider from whom they take property. African American property owners should pursue a due process claim for just compensation to reevaluate whether subjective value should be included in fair market value assessments. This argument can encourage more cautious urban and rural planning to prevent disrupting African American ownership and the explicit and implicit bias involved in the undervaluing of Black-owned land.

A. Due Process Claim: The Right to Just Compensation

Due process ensures that “[n]o person shall . . . be deprived of life, liberty, or property without due process of law” by the federal government^[169] or individual states.^[170] The lack of “just” compensation, when traditional methods of land valuation are racially discriminatory,^[171] and the inconsideration of Black wealth, joy, and culture cultivated through land ownership, is an undeniable deprivation of property because the Fifth Amendment requires “just compensation” for “private property . . . taken for public use.”^[172] The government must also justify a violation of an individual’s substantive or procedural due process rights. Procedural due process requires that “when the government takes away a person’s life, liberty or property, it must provide adequate procedures,” for example, providing notice and a hearing before terminating custody.^[173] The right to just compensation is not a procedural issue. Substantive due process requires that “the government must justify an infringement by showing that its action is sufficiently related to an adequate justification.”^[174] Therefore, the infringement of the right to just compensation is a substantive due process issue when the standard means of calculating the amount of compensation systemically harms Black landowners.

When an individual raises a due process violation claim of an enumerated right, the government will need to meet the highest judicial review standard, strict scrutiny.^[175] Under substantive due process, strict scrutiny requires that the government show that terminating the fundamental right is necessary to achieve a compelling purpose.^[176] Courts analyze four main issues to determine whether there is a due process violation: (a) Is there a fundamental right?; (b) Is the constitutional right infringed?; (c) Is there a sufficient justification for the government’s infringement of a right?; and (d) Is the means sufficiently related to the purpose?^[177]

1. Just Compensation is a Fundamental Right

An enumerated right is a right specifically mentioned in the U.S. Constitution or is “fundamental to the operation of the nation and liberties enjoyed by the people.”^[178] The Fifth Amendment enumerates the right to just compensation as a fundamental right: “Nor shall private property be taken for public use without just compensation.”^[179] This clause makes it clear that property owners have the right to receive just compensation from the government when their land is taken for public use. The Court should agree that the right to just compensation is an enumerated right and should next analyze whether the current definition of fair market value infringes on the right to just compensation.

2. The Infringement on “Just Compensation” through Discriminatory Valuation

Case precedent has narrowed the definition of just compensation to the fair market value of property at the time of the taking. As discussed in Part III of this Note, traditional practices of calculating fair market value tend to undervalue African American-owned property. Additionally, the Supreme Court has not overturned Chicago, Burlington & Quincy Railroad that excludes owning land as generational wealth from being included in fair market value: “[I]t is well settled that ‘mere possible or imaginary uses, or the speculative schemes of its proprietor, are to be excluded.’”^[180] The Supreme Court has not recognized that the subjective value of property should be included in fair market value; therefore, consideration of subjective value is not required within a just compensation analysis.

Until subjective value is included in a fair market value computation, most African American owners will not be fully compensated for their forced property sale.^[181] Currently, the Court identifies fair market value as the minimum value of just compensation;^[182] therefore, my solution is to require the inclusion of subjective value in a fair market evaluation, equating to a new theory: equitable market value. The term “fair” in fair market value invokes an equal application of how property is valued. However, property ownership is different for African Americans compared to other racial groups. African Americans were legal chattel for approximately four centuries, and only within recent history were able to establish and retain actual land ownership in the United States.^[183] This transition and the obstacles faced throughout should be considered when the government seeks to exercise a taking of Black-owned land. Taking such land without cautious calculation of what encompasses “just” compensation, would infringe on the right to just compensation in direct violation of the Fifth Amendment, especially in light of such a disadvantaging history.

The directness and substantiality of an interference are considered when a violation of a fundamental right is raised.^[184] The strict boundaries of fair market value are a direct and substantial interference on the right of just compensation from the perspective of African American owners. Requiring a standard of fair market value is a direct legal obstacle because it prevents subjective value from being calculated in that equation, which would make the compensation “just.” Preventing such calculation is also substantial, considering the significance of property ownership for the African American community in the wake of the Black land loss crisis and the racial wealth gap valued in the trillions of dollars.^[185] This argument now turns to whether the undercompensation of African American property owners constitutes a sufficient justification for the infringement of the right to just compensation.

3. Lack of Affordability Infringes on Justly Compensating Property Owners

The violation of the right to just compensation requires the government to carry the burden of proving that such infringing serves a compelling government interest. The compelling interest must be “important enough that it justifies the infringement on a fundamental right.”^[186] Justice Hugo L. Black stated that in considering just compensation, the question remains: “What compensation is ‘just’ both to an owner whose property is taken and to the public that must pay the bill?”^[187] The compelling interest in infringing on the right to just compensation lies in balancing what is affordable for the public and what is equitable for the owner. Why should the owner have to sacrifice their land for the public, especially when considering the disproportionate rate of eminent domain abuse that African American owners experience, and given the evolution of public use, which may permit land to be transferred for private use? A public budget should not be given greater importance over someone’s stability, sense of home, and opportunity for generational wealth. Given the weakness of this suggested potential compelling interest, this argument moves to the next issue: considering whether the right to infringe on just compensation is sufficiently related to its purpose of making the owner “whole.”

4. Forcing Some People Alone to Bear the Burden of “Public Use”

The objective of providing just compensation, in exchange for taking private property for public use, is to “bar [the] Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.”^[188] However, in juxtaposition with this objective, footnote 15 of Kirby Forst Industries v. United States acknowledges that fair market value may not compensate for the special value landowners hold in their property.^[189] The Kirby Court notes that “occasional inequity” is tolerable given the difficulty assessing the value of property to each individual, and due to the need for a “clear, easily administrable rule governing the measure of ‘just compensation.’”^[190] I would question the Court’s “tolerance” measure and query on what qualifies as “occasional inequity.” Given the history of eminent domain abuse, Black communities have disproportionately faced challenges and continue to do so, since traditional, current-day fair market value evaluations often undervalue African American-owned property. This disparity is not merely “occasional” inequity, and continuing such disparity is a “manifest injustice” on African American owners who were separated from their property at below equitable market value for questionable public use.

a. “Withintrification” as a Less Restrictive Alternative to Shortchanging Black Property Owners

Lastly, under strict scrutiny, the government must prove it has a compelling interest in infringing on the fundamental right and has chosen the least restrictive means to achieve that goal.^[191] If an alternative approach that is less restrictive on the fundamental right exists, the government must use that alternative.^[192] The Supreme Court should recognize, given eminent domain abuse, that there are less restrictive means to improve communities rather than continuing to allow the undercompensation of Black property owners by using the traditional just compensation model.

An alternative method, especially for economic development takings, is the practice of “withintrification.” Withintrification, a term coined by Professor and Pastor John Wallace, allows current residents to revitalize the area under their direction to prevent displacement.^[193] Gentrification originates when the “interests lie with outside developers, often at the expense of displacing current residents.”^[194] However, withintrification occurs when “community investments are led by the interests of current residents” to improve their community without displacing themselves.^[195] The concept involves “identifying assets in the community, bringing them together under common objectives, and raising the value of the place from within at a pace appropriate for revitalizing the existing community, not displacing it.”^[196] Keeping long-standing residents in their community helps ensure owners are not forced to give up their homes and can reap the benefits of “public use” or “renewal.” Most withintrification efforts require investments in the targeted communities such as creating streetscapes, parks, museums and other projects for historic and cultural preservation, affordable housing, job creation, culturally appropriate zoning overlay, community benefits agreements, property rehabilitation, and using grant funding from local government or philanthropic foundations managed by non-profit organizations.^[197] Withintrification focuses on community-driven revitalization that strengthens existing residents and their needs, in contrast with gentrification.^[198] Eminent domain can be a tactic to facilitate gentrification, where governments use the power to acquire property in areas targeted for redevelopment, ultimately leading to displacement and the replacement of low-income communities with more affluent populations.

V. “It Is So Ordered”: The Inclusion of Subjective Value is Not an Optional Component in Just Compensation Calculation

The Supreme Court should recognize that subjective value is required beyond the fair market value of a property at the time of taking, in a due process claim for just compensation, to include equitable market value (subjective value within the calculation of fair market value) as the minimum cost of just compensation, not an optional component. Therefore, equitable market value is the baseline for determining just compensation. There are numerous reasons why the legal meaning of just compensation, the fair market value of property at the time of taking, is not an equitable remedy for eminent domain, particularly for African American property owners. First, the Black Land Crisis from 1919 to 1997 debilitated generational wealth for African Americans. Second, eminent domain abuse affects African American owners and residents at a disproportionate rate compared with owners in other racial groups. Third, the inaccuracy of appraisal methods undervalues property in predominantly Black neighborhoods. And fourth, the racial wealth gap in America between Black and White citizens continues to alienate Black people from the American Dream, which is founded on property ownership.

Eminent domain is antithetical to the American Dream. Again, moving from being chattel property to real property owners, African Americans have tried to forge a sense of belonging and stability—an intangible realization of the American Dream. Eminent domain places the American Dream for sale, often undervaluing Black-owned property, and with it, the trials and tribulations of the property owners’ ancestors who struggled to survive in this country to allow their descendants to participate in the “dream.” Accounting for the generational wealth lost because of the government’s taking is necessary to make a property owner’s sacrifice of property and the American Dream wholly compensatory. The American Dream cannot survive if the property owner is undercompensated, and therefore not made whole, because of “occasional inequity.” The government either must find alternative property or support withintrification until the public can honestly afford to equitably compensate the owner, therefore not continuing to force marginalized property owners to forsake their “dream” to bear the cost of public use.