A few days ago, the Washington Post had an extremely interesting article about the US Army's efforts to potentially use eminent domain to take some 418,000 acres of property belonging to Colorado ranchers in order to expand a key training area for its troops (hat tip - VC reader Howard Owens, whose relatives are among those who may lose their land):

The U.S. Army wants 418,000 acres of private ranch land to triple the size of its Piñon Canyon Maneuver Site, a training area considered suitable — some would say essential — for preparing American warriors to do battle in the Middle East and Afghanistan. The 1,000-square-mile facility would be 15 times the size of the District.

Several dozen ranchers and members of 15 county commissions that voted to oppose the project find themselves pitted against the Pentagon and Colorado business interests in a struggle over property rights, personal heritage and the contested priorities of national security.....

[T]he government's appeal to patriotism when ranchers could be forced to sell property that has been in their families for generations leaves many landowners cold. They remain skeptical of the claims of national security and frustrated by the lack of answers....

The land under discussion is an arid plateau that occupies a sparsely populated slice of Colorado near the New Mexico border.....

Brian A. Binn, president of the military affairs committee of the Colorado Springs Chamber of Commerce, said the benefits to the state economy and national defense are clear. If the ranchers triumph and the training site is not created, he added, other states would be all too willing to accept the troops and the business.

"We have to look sometimes at what's better for the national defense, the greater good," Binn said. "It is a national security issue. The men and women of our armed services deserve nothing less."

Bob Hill, a rancher forced to sell his land to the Army 25 years ago, said caustically, "I find the city people are really patriotic with our property."

As a legal matter, there is no doubt that this potential use of eminent domain is constitutional. Even those - like myself - who favor a narrow interpretation of the Public Use Clause of the Fifth Amendment agree that the government may condemn property in a case where it intends to retain ownership of the land itself rather than transfer it to a private party.

However, the fact that the Army's plan is constitutional doesn't necessarily mean that it is equitable or efficient. Undoubtedly, military training is an urgent national priority, particularly in a time of war. Thus, if the ranchers' property is the best available site for an expanded training facility and the land can't be obtained through voluntary transactions, there would be some justification for using eminent domain.

Nonetheless, there remains the question of whether a facility of comparable quality could be built without resorting to condemnation. The U.S. government already owns hundreds of millions of acres of desert property in the Western states, much of which is not being used. Perhaps the Pentagon could build a new training facility on land the federal government already owns; if so, that would be far preferable to displacing private property owners.

It is of course possible that the Colorado site really is superior to any potential alternative. I lack the expertise to judge that issue. If so, there is a strong case for paying the owners compensation above the market value of the land. According to the Supreme Court, the Constitution's requirement of "just compensation" only mandates that the government pay the owners of condemned property "fair market value." However, market value compensation often fails to fully replace the owners' losses. If they valued the land at the market price or less, they presumably would have sold it already; their decision to hold onto it is an implicit signal that they place a "subjective value" on the property above its market price.

In this case, subjective value concerns are particularly serious. Many of the owners' families have lived on the land for generations, and would lose most of their livelihood if forced to move. Even if the Court is right to hold that fair market value compensation is all the Constitution requires, this is one case where the feds should pay more.

At Concurring Opinions lawprof Kaimipono Wenger raises some interesting points in response to my post on the US Army's efforts to use eminent domain to take over 400,000 acres of land belonging to Colorado ranchers in order to build a new training ground for troops. In particular, he questions my suggestion that the Pentagon should build its new training facility land already owned by federal government rather than using eminent domain, and my argument that - if eminent domain is used - the ranchers should be compensated for the "subjective value" they place on the property as well as its market value.

I. Using Land Already Owned by the Government as an Alternative to Eminent Domain.

Wenger argues that I am wrong to believe that the new facility should, if possible, be built on land already owned by the government rather than on property taken from unwilling private owners. He notes that, in some instances, using land already owned by the government will be inefficient or excessively costly. However, I did not claim that land already owned by the state should be used in every conceivable scenario. To the contrary, I noted in my original post that using eminent domain might be the way to go if "the [privately owned] Colorado site really is superior to any potential alternative." My argument was merely that using government-owned land or land purchased from willing private sellers should be preferred to eminent domain if other considerations are relatively equal. I would also add that some degree of efficiency could be sacrificed to avoid using eminent domain in cases where the harm to private owners is very great or if the efficiency gains of eminent domain are outweighed by the costs of the takings process itself (including litigation, enforcement, and opportunity costs, among others).

II. Compensation for "Subjective Value."

Wenger also questions my suggestion that the government should compensate the Colorado property owners for their loss of "subjective value" - the value that they attach to their property over and above its market price. Current legal doctrine requires the government to pay only "fair market" value to owners who lose their property to condemnation. This approach leads to the infliction of uncompensated losses on owners and in some cases leads to the use of condemnation in cases where the benefits to the government are actually smaller than the losses suffered by the owners (if subjective value is taken into account).

Wenger does not deny any of the above. But he argues against compensation for subjective value because "[t]hat would be a major change in takings law, and would affect vast numbers of takings, since many property owners attach some subjective value to their property." Wenger seems to assume that I advocate having courts try to ascertain and require compensation for an exact subjective value for each owner in every condemnation.

Trying to calculate subjective value on a case by case basis would indeed probably be unworkable. But there are many other ways to provide at least some compensation for subjective value. For example, courts could require the government to pay a set premium (say 10-15%) above the market price of condemned property, as is done in Britain and Canada. Alternatively, it could establish rules of thumb regulating the size of the required premium based on the type of property being condemned(perhaps more for homes and small businesses than for investment property). Even if we reject all potential judicial efforts to require compensation for subjective value, one could still argue that the legislature should undertake to provide such compensation on its own initiative.

The fact that the right level of compensation for subjective value is difficult to ascertain and that such compensation not required by current American legal doctrine, doesn't mean that we should simply assume that that value is zero and leave it completely uncompensated. As Wenger himself puts it, "[P]roperty owners often attach subjective value to their property, and thus the value to an owner is often greater than market value. That's why the property is still in the hands of _these_ owners, after all."

That said, I am myself skeptical of theories that claim that increasing compensation can solve all the problems created by eminent domain. For my explanation of that skepticism, see this article (pp. 214-18). In many situations (as I explain in the article), the difficulties involved in estimating and compensating subjective value strengthen the case for abjuring the use of eminent domain altogether.

UPDATE: Wenger also raises some other issues, mostly related to my own uncertainty about whether the potential Colorado taking is justified on grounds of its utility to the Army. I can't address them because I lack the needed expertise on the factors involved in choosing locations for military training facilities. As I noted in the original post, I chose not to discuss them precisely because "I lack the expertise to judge."

Wenger also misinterprets my post as implicitly advocating some sort of general rule of takings based on an analysis of equity and efficiency. No such general point was intended, though I can to some extent see how my original post could be misinterpreted in this way.