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Infrastructure Plan to Boost Eminent Domain Activity

by | Nov 9, 2021

Eminent domain activity is expected to strengthen as a result of the Biden administration’s infrastructure bill. The bill be used to fund one of the largest public-use building programs in the nation’s history.

Eminent domain gives government entities the power to take private land for public use. In exchange, property-owners are compensated for the fair market value of their property.

On November 5, the House passed the infrastructure package, which allocates $1 trillion to finance a wide array of projects. They range from improving deteriorating roads and bridges to expanding the country’s aging and inadequate electrical power grid. The magnitude of rebuilding the nation’s infrastructure would likely require the government or other entities using eminent domain to meet project demands. Some of those projects include:

  • Roads and bridges – The infrastructure bill proposes $110 billion to repair and upgrade roads and bridges. The nation’s roads and bridge were built several decades ago, many of which are in disrepair due to the expanding volume and weight of cars and trucks. According to a White House report, approximately 20 percent, or 173,000 miles, of the country’s highways and major roads and 45,000 bridges are in poor condition.
  • Transit and rail systems — The legislation would invest $105 billion for public transit and rail transportation. A large portion will be given to Amtrak, the federally supported passenger train service.
  • Electric power – The spending plan would provide $65 billion to modernize the nation’s electric power grid, installing new power lines and increasing renewable energy resources. Another $15 billion will be allocated to boost the use of electric vehicles. The addition of new power transmission lines is critical to expanding the use of electric vehicles as many urban and suburban areas lack adequate infrastructure to meet power requirements needed to charge large numbers of these vehicles.
  • Upgrading broadband – The infrastructure bill would invest $65 billion in upgrading broadband, which would improve internet access in rural areas. This would most likely require using right-of-way acquisitions for the installation of fiber optic cable in rural and remote areas. Right-of-way, a type of easement, is another way eminent domain can be used in acquiring properties for public use.
  • Airports and seaports – More than $40 billion is expected to be allocated to fund the upgrade and expansion of airports and seaports. Airports will require additional land acquisitions to extend runways and aerial easements over private properties. Increased lighting, parking and other airport upgrades will also be needed. Funds also will be used for repairs and maintenance, and to limit traffic congestion near seaports and airports.
  • Other infrastructure projects – The legislation will provide billions of dollars for other infrastructure projects in need of repairs, upgrades and expansion including water and sewage systems, environmental remediation, flood mitigation, and pedestrian safety programs.

Work on projects could begin as early as next year. The plan’s initial phase, however, would probably be limited to smaller infrastructure projects.

The condemnation of private land for some of these projects could endure lengthy delays as eminent domain litigation slowly winds its way through the courts. This problem could be exacerbated by the current backlog of eminent domain cases resulting from pandemic-related restrictions imposed on the court system.

“Quick take” eminent domain, however, could help solve a bottleneck in settling eminent domain cases. Many states have “quick take” authority that allows government entities and companies to take immediate possession of private property before paying the property owner. The property’s valuation is established at a later date so that the project isn’t delayed due to protracted legal proceedings in eminent domain cases.

The current slowdown in oil and gas projects has led to excess capacity of firms specializing in eminent domain and right-of-way valuation services. But they are likely to find plenty of business with the long list of projects, many of which will take years to complete. And given the plan’s size and scope, there could be shortage of infrastructure valuation professionals to handle all of the proposed projects.

To help prepare for this challenge, organizations like the International Right of Way Association, a trade group of infrastructure real estate practitioners, are providing training and other resources to appraisers interested in this type of work.

BBG, which has extensive expertise in right-of-way and eminent domain work for both public and private concerns, is busy recruiting qualified appraisers to handle the imminent boom in infrastructure projects. The firm is seeking experienced appraisers with right-of-way experience in transportation, oil, gas, and other utilities. For those who are interested in this opportunity, please contact BBG at careers@bbgres.com for more details.

Mr. Turner is a Managing Director at BBG’s Jackson, Miss. office. BBG is a national valuation and assessment commercial real estate services firm.