When property is taken under eminent domain, there must be payment of just compensation, whereas a taking under the police power (such as zoning) does not require compensation.
Eminent Domain – The right of government (both state and federal), public corporations (school districts, sanitation districts), public utilities, and public service corporations (railroads, power companies) to take private property for a necessary public use, with just compensation paid to the owner. Generally, however, the law will not allow compensation for lost profits, inconvenience, loss of goodwill, and the like, although severance damages may be awarded for a loss in value to the remaining property that is not actually condemned. Through eminent domain, the state may acquire land (fee, leasehold, or easement) for streets, parks, public buildings, public rights-of-way, and similar uses. No private property is exempt from this exercise of government power.
If the owner and the government cannot negotiate a satisfactory voluntary acquisition of the property, the government can initiate a condemnation action to take the property. In such case, an owner’s main grounds for complaint would usually be that the intended use is not a sufficient public use or that the valuation given the property in the condemnation proceeding is unjust.
Compare to a property owner’s loss of use when their property is down-zoned from multi-family to single family use.
Police Power – The constitutional authority and inherent power of a state to adopt and enforce laws and regulations to promote and support the public health, safety, morals, and general welfare. Such laws must be uniform in operation and nondiscriminatory, and cannot be advantageous to any one particular person or group. In essence, it is an authority derived from individual state constitutions, which also vest the power in counties, cities, and municipalities to adopt and enforce appropriate local ordinances and regulations that are not in conflict with general laws.
Some examples of police power are the right to tax, the right to regulate land use through a general plan and zoning, the right to require persons selling real estate to be licensed, the right to regulate pollution, environmental control, and rent control.
Although police power permits the state to regulate the use of an individual’s property in order to protect public health, safety, and welfare, such regulation has its limits. If it goes too far, it is recognized as a “taking” which requires that the state pay just compensation to the individual affected.
A related concept is Condemnation, defined as a judicial or administrative proceeding to exercise the power of eminent domain; the action of the government (federal, state, local, improvement district) to take private property for public use. The agency taking the property is the condemnor, and the person whose property is being taken is the condemnee. In the taking of private property for public use, a fee simple estate or any lesser right, such as an easement, may be acquired. A common example of condemnation is the taking of an owner’s access to a street entrance when the county builds a highway or dedicates the area for county use.
The right of eminent domain is limited by the Fifth Amendment to the U.S. Constitution, which states: “No person shall be deprived of life, liberty, or property without due process of law; nor shall private property be taken for public use without just compensation.” Private property may be taken without the consent of the owner, whose defenses may be that the land was not taken for a sufficient