In a major victory for municipalities and land developers, the U.S. Supreme Court ruled in 2005 that local governments may seize private property in the name of economic development--and even transfer it to a private developer--as long as landowners receive compensation.

While the U.S. Constitution's "eminent domain" clause grants that governments can seize private property for "public use" without consent of the owner, the law normally has been restricted to the development of roads, airports, and "blighted areas." Local governments have found it increasingly convenient, however, to use eminent domain for development projects that enhance the tax base, and some analysts claim the new ruling has opened the door to an all-out land grab by the state.

As expected, the court's decision sparked a nationwide backlash from citizens and lawmakers alike. Though Americans generally accept that homes may be condemned in order to build highways or railroads, they cringe at the notion that eminent domain may be used to enrich corporate developers and fill government tax coffers.

Yet while an overwhelming majority of Americans consider the new ruling outrageous, some city officials and developers praised the court's decision. Such individuals argue that economic development is necessary to stimulate job growth and compete in a global market.