Takings: an Overview
When a government actually or constructively takes private property for public use, that goverment must pay "just compensation" to the property's former owners.
Sources of Law
Government use, regulation, and seizure of private property is governed by rules set by legislatures. In addition, the Fifth Amendment requires the government to pay "just compensation" when taking property for public use. This requirement applies to the states as well as the federal government.
Types of Takings
Many types of government action infringe on private property rights. Accordingly, the Fifth Amendment's compensation requirement is not limited to goverment seizures of real property. Instead, it extends to all kinds of tangible and intangible property, including but not limited to easements, personal property, contract rights, and trade secrets.
The Fifth Amendment's just compensation rule applies not only to outright government seizures of private property, but also to some government regulations. "Property is taken in the constitutional sense when inroads are made upon an owner’s use of it to an extent that, as between private parties, a servitude has been acquired either by agreement or in course of time.” United States v. Dickinson, 331 U.S. 745 (1947).
It is not always clear which regulations constitute takings, and why. The government absolutely must compensate property owners for regulations requiring a physical invasion of private property, even if it is a small invasion. On the other hand, the government generally does not need to compensate for the effects of health and safety regulations or simple changes in the law. See the CRS Annotated Constitution for more details.
Land Use Regulation
Many regulatory takings disputes arise in the context of land use regulation. The Supreme Court does not require government compensation where such regulations "substantially advance[s] legitimate governmental interests," and so long as the regulations do not prevent a property owner from making “economically viable use of his land.” Agins v. City of Tiburon, 447 U.S. 255 (1980).
In the past, courts narrowly interpreted the Fifth Amendment to only allow the goverment to seize property for highways, government offices, military bases, and the like. Now, courts more broadly interpret the amendment to allow the government to seize property if doing so will increase the general public welfare, such as when the government uses eminent domain to seize private property to facilitate a private development that will raise the government's tax revenues. See Kelo v. City of New London, 545 U.S> 469 (2005).
How much Compensation is Just?
Generally, the government must pay the market value of seized property. There are, however, many exceptions. The government need not compensate a property owner for the portion of the property's value created by that government. For example, in United States v. Fuller, 409 U.S. 488 (1973), the Supreme Court held that when the federal government condemned a rancher's grazing land, it did not owe compensation for the portion of the land's value derived from its proximity to adjacent, federally owned grazing land.