On June 23, 2005, the Supreme Court handed down Kelo v. City of New London , one of its three property rights decisions during the 2004-2005 term. In Kelo , the Court addressed the City's condemnation of private property to implement its area redevelopment plan aimed at invigorating a depressed economy. By 5-4, the Court held that the condemnations satisfied the Fifth Amendment requirement that condemnations be for a "public use," notwithstanding that the property, as part of the plan, might be turned over to private developersâa private-to-private transfer. The property owners argued for a flat rule that economic development is not a public use.
In Kelo v. City of New London , decided June 23, 2005, the Supreme Court held 5-4 that the city's condemnation of private property, to implement its area redevelopment plan aimed at invigorating a depressed economy, was a "public use" satisfying the U.S. Constitutionâeven though the property might be turned over to private developers. The majority opinion was grounded on a century of Supreme Court decisions holding that "public use" must be read broadly to mean "for a public purpose." The dissenters, however, argued that even a broad reading of "public use" does not extend to private-to-private transfers solely to improve the tax base and create jobs. Congress is now considering several options for responding to the Kelo decision.