In Kelo v. City of New London, decided June 23, 2005, the Supreme Court ruled 5–4 that the City of New London, Connecticut, could use eminent domain to seize well-maintained private homes and transfer the land to private developers as part of an economic redevelopment plan. The majority read the Fifth Amendment’s “public use” requirement to include projected job growth and tax revenue, even when the condemned property would end up in private hands. The decision remains binding federal law, but it provoked one of the largest state legislative backlashes to any Supreme Court ruling in American history.1Justia U.S. Supreme Court Center. Kelo v. City of New London
The Homes, the Plan, and the Lawsuit
By the late 1990s, New London had been losing population and jobs for decades. When Pfizer announced in 1998 that it would build a global research facility next to the Fort Trumbull neighborhood, city officials saw an opening. They authorized the New London Development Corporation, a private nonprofit, to assemble land in Fort Trumbull for a sweeping plan that included upscale housing, office space, a hotel, and a waterfront park.2Connecticut General Assembly. New London Eminent Domain Case and Proposed Legislation
The NLDC bought out most owners. Seven families holding fifteen properties refused to sell. None of the homes were blighted. Susette Kelo, who had bought and renovated a pink Victorian cottage in 1997, became the public face of the resistance. When the NLDC moved to condemn the holdout properties, Kelo and her neighbors sued, arguing that a forced transfer of well-kept homes to a private developer was not a “public use” the Constitution allowed.1Justia U.S. Supreme Court Center. Kelo v. City of New London
The Question Before the Court
The Fifth Amendment says private property shall not “be taken for public use, without just compensation.”3Constitution Annotated. Amdt5.10.2 Public Use and Takings Clause No one disputed that New London had to pay fair market value. The fight was over what “public use” means. The homeowners argued the phrase requires actual use by the public, or at least something closer to it than a commercial redevelopment run by a private developer. The city argued that jobs, tax revenue, and neighborhood revitalization were public benefits that satisfied the clause.
How the Court Ruled
Justice John Paul Stevens wrote the majority opinion, joined by Justices Kennedy, Souter, Ginsburg, and Breyer. The Court held that promoting economic development is a traditional government function, and it saw no principled reason to treat it differently from earlier takings the Court had already approved. Two decisions did most of the work.
In Berman v. Parker (1954), the Court upheld the condemnation of an entire blighted Washington, D.C. neighborhood for urban renewal, even though some individual buildings were sound. Justice Douglas wrote that “the concept of the public welfare is broad and inclusive” and that courts should defer to legislative judgments about how to achieve it.4Justia U.S. Supreme Court Center. Berman v. Parker Thirty years later, in Hawaii Housing Authority v. Midkiff (1984), the Court upheld a Hawaii statute that forced large landowners to sell to their tenants, holding that breaking up a land oligopoly was a legitimate public purpose even though the property moved directly from one private party to another.5Justia U.S. Supreme Court Center. Hawaii Housing Authority v. Midkiff
Reading those cases together, the Kelo majority said “public use” effectively means “public purpose,” and courts should defer to local officials on whether a plan meets that standard. Three points carried the opinion. The development plan was comprehensive rather than a favor to a single party. It had gone through a deliberate process. And judges were not well positioned to second-guess a Connecticut city about whether it needed a research park more than existing homes. Stevens acknowledged that a broad reading of “public use” risks allowing takings that shift property to wealthier owners who pay higher taxes, but he pointed out that states remained free to impose stricter limits under their own laws.
Kennedy’s Concurrence and Why It Matters
Justice Kennedy provided the fifth vote and wrote separately to mark a limit the other four in the majority did not draw. He agreed that rational-basis review applied, but insisted it still had teeth. A taking designed to “confer benefits on particular, favored private entities, and with only incidental or pretextual public benefits” would violate the Fifth Amendment even under a deferential standard.6Legal Information Institute. Kelo v. City of New London – Kennedy Concurrence When a landowner can point to real evidence of favoritism dressed up as public benefit, Kennedy said, courts should look at the record. He also left open the possibility that certain economic-development takings might warrant stricter scrutiny in future cases. That concurrence is the practical opening for property owners trying to defeat a taking without asking the Court to overturn Kelo.
The Dissents
Justice Sandra Day O’Connor, joined by Chief Justice Rehnquist and Justices Scalia and Thomas, wrote the dissent that resonated most with the public. Under the majority’s logic, she argued, nothing stopped a city from taking a Motel 6 and giving the land to a Ritz-Carlton, because the fancier use always generates more revenue. She warned that the beneficiaries would be well-connected developers and corporations, and the losers would be people with less political power to fight back. O’Connor read Berman and Midkiff as different in kind: those cases involved correcting a specific harm, not simply upgrading a neighborhood’s tax base.1Justia U.S. Supreme Court Center. Kelo v. City of New London
Justice Thomas filed a separate dissent taking a stricter position. He argued that “public use” should mean what it says: property must actually be used by the public, like a road, a military base, or a park. Tracing the phrase to the founding era, Thomas said the broad “public purpose” reading in Berman was itself wrong. He also noted that urban renewal programs had historically displaced African American communities and other politically vulnerable groups at disproportionate rates.1Justia U.S. Supreme Court Center. Kelo v. City of New London
What Happened to the Fort Trumbull Land
The development that justified the takings was never built. After the homes came down, Pfizer announced in November 2009 that it was closing its New London research facility and moving roughly 1,400 jobs across the river to Groton.7CT.gov. EB Is Busy Making Pfizer Site Its Own The city had already spent roughly $78 million clearing the land and installing infrastructure. No hotel, no office complex, and no upscale housing ever materialized. A decade after the ruling, the Fort Trumbull site was an empty field.
Susette Kelo’s pink cottage was spared demolition. The city and state agreed to let the house be moved, and it was relocated to a new site in downtown New London.
The State Legislative Backlash
Public reaction to Kelo crossed party lines, and state legislatures moved faster than they have on almost any other Supreme Court decision. Within a few years, 45 states had enacted some form of eminent domain reform. The reforms took several shapes:
- Outright bans on takings whose primary purpose is increasing tax revenue or promoting commercial development.
- Narrower definitions of “blight,” requiring a direct threat to public health or safety rather than mere economic underperformance.
- Constitutional amendments in states including Florida, Louisiana, Michigan, and New Hampshire prohibiting transfers of condemned property to private parties for economic development.
- Procedural protections, such as a right of first refusal for original owners if a project is abandoned, and public votes by elected officials before redevelopment condemnations can proceed.
Not every reform has real force. Some laws that sound protective contain broad blight exceptions that permit the same kinds of takings under a different label. Whether a given state’s reform actually restrains eminent domain depends on how narrowly it defines blight and whether it carries enforcement mechanisms.
The Federal Response
On June 23, 2006, exactly one year after the ruling, President George W. Bush signed Executive Order 13406, declaring it federal policy to limit takings to situations that benefit the general public “and not merely for the purpose of advancing the economic interest of private parties to be given ownership or use of the property taken.”8GovInfo. Executive Order 13406 – Protecting the Property Rights of the American People The order lists permitted categories including public roads, military reservations, utilities, environmental hazard mitigation, and public health emergencies. Its reach is limited: it binds federal agencies, not state or local governments, which carry out the vast majority of eminent domain actions.
Where the Law Stands Now
Kelo is still good law at the federal level. The Supreme Court has not overruled it, and the Fifth Amendment’s public-use requirement is still read broadly enough to reach economic development. What changed is everything underneath. With 45 states having tightened their own rules, most property owners now hold stronger protections under state law than the federal Constitution provides. The practical limit on government power over private land is set in state capitols. Kennedy’s concurrence still gives owners a federal argument when a taking looks pretextual, but the main battleground has moved. If you are trying to understand what protects your home from condemnation for a private redevelopment, start with your state’s eminent domain statute and constitution, not the Fifth Amendment.