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An Empirical Study of Compensation Paid in Eminent Domain Settlements: New York City, 1990-2002

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  • Yun-chien Chang

Abstract

No large-scale empirical study on condemnation compensation has been done in the past 30 years. Several state legislatures, in response to Kelo v. City of New London, have changed laws to increase condemnation compensation, despite the lack of empirical grounds. To fill in the empirical gap, I use hedonic regression models and about 80,000 sales to estimate the fair market value (FMV) of 430 condemned properties whose owners reached compensation settlements with the condemnor, New York City, between 1990 and 2002. More than 50 percent of these condemnees were compensated with less than FMV, about 40 percent received more than FMV, and less than 10 percent received FMV. Owners of residential properties and nonresidential properties alike often received extreme compensations that are less than 50 percent or more than 150 percent of FMV. Extreme compensation results from bias-prone and inaccurate appraisal methods. Using the available data, I find that compensation level does not correlate with any factor. (c) 2010 by The University of Chicago. All rights reserved.

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  • Yun-chien Chang, 2010. "An Empirical Study of Compensation Paid in Eminent Domain Settlements: New York City, 1990-2002," The Journal of Legal Studies, University of Chicago Press, vol. 39(1), pages 201-244, January.
    • Handle: RePEc:ucp:jlstud:v:39:y:2010:i:1:p:201-244
    DOI: 10.1086/605095
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    2. Hu, Jianfeng & Low, Kelvin F.K. & Zhang, Wei, 2022. "The value of fiduciary duties: Evidence from en bloc sales in Singapore," International Review of Law and Economics, Elsevier, vol. 72(C).
    3. Glaeser, Edward L. & Ponzetto, Giacomo A.M., 2018. "The political economy of transportation investment," Economics of Transportation, Elsevier, vol. 13(C), pages 4-26.
    4. Zillante, Artie & Read, Dustin C. & Seiler, Michael J., 2020. "Assembling land for urban revitalization in the presence of linchpin parcels and information asymmetries: An experimental investigation," Land Use Policy, Elsevier, vol. 99(C).
    5. Paradza Partson & Yacim Joseph Awoamim & Zulch Benita, 2021. "Consistency and Fairness of Property Valuation for Compensation for Land and Improvements in Zimbabwe," Real Estate Management and Valuation, Sciendo, vol. 29(4), pages 67-84, December.
    6. Carl Kitchens, 2014. "The use of eminent domain in land assembly: The case of the Tennessee Valley Authority," Public Choice, Springer, vol. 160(3), pages 455-466, September.
    7. Portillo, Javier E., 2019. "Land-assembly and externalities: How do positive post-development externalities affect land aggregation outcomes?," Regional Science and Urban Economics, Elsevier, vol. 77(C), pages 104-124.
    8. Chen, Daniel L. & Yeh, Susan, 2016. "Government Expropriation Increases Economic Growth and Racial Inequality: Evidence from Eminent Domain," TSE Working Papers 16-693, Toulouse School of Economics (TSE).
    9. Winn, Abel M. & McCarter, Matthew W., 2018. "Who's holding out? An experimental study of the benefits and burdens of eminent domain," Journal of Urban Economics, Elsevier, vol. 105(C), pages 176-185.
    10. Enwei Zhu & Stanislav Sobolevsky, 2018. "House Price Modeling with Digital Census," Papers 1809.03834, arXiv.org.
    11. Uyanik, Metin & Yengin, Duygu, 2023. "Expropriation power in private dealings: Quota rule in collective sales," Games and Economic Behavior, Elsevier, vol. 141(C), pages 548-580.
    12. Ronit Levine‐Schnur, 2023. "Is the government exhausting its powers? An empirical examination of eminent domain exercises in New York City pre‐ and post‐Kelo," Regulation & Governance, John Wiley & Sons, vol. 17(2), pages 449-468, April.

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