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Texas and Eminent Domain Law: Better Than Elsewhere, but Still Room for Improvement

by Steven Greenhut, Josiah Neeley
July 9, 2026
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issues: State Policy, Texas

The concept of eminent domain might seem odd in a nation based on the rights of individuals and the importance of property rights; however, the founders did embed the doctrine in the U.S. Constitution. Derived from the Latin words dominium eminens (“supreme lordship”), it means that all governments, whether federal, state, or local, have the right to seize property from private owners as part of their authority to promote the public good.

The Roots of Eminent Domain

Dutch jurist Hugo Grotius first enunciated the term in 1625: “The property of subjects is under the eminent domain of the state, so that the state or he who acts for it may use and even alienate and destroy such property, not only in the case of extreme necessity, in which even private persons have a right over the property of others, but for ends of public utility …”

While Grotius’ phrasing should rankle individualists, the resulting doctrine was quite limited—at least in early America. Traditionally, the U.S. Department of Justice explains, eminent domain has been used “to facilitate transportation, supply water, construct public buildings and aid in defense readiness.” It’s hard to imagine constructing America’s intercontinental railway or interstate highway systems, Western dams and water systems, or even prisons and courthouses without it.

Fortunately, the Fifth Amendment imposes limits on governments by ensuring that no one is “deprived of life, liberty or property, without due process of law; nor shall [their] private property be taken for public use, without just compensation.” This means that:

But eminent domain has had its share of controversies and abuses, even when contained to its proper sphere. For instance, the federal government handed eminent-domain powers to railroad barons, who sometimes planned circuitous routes that seemed designed to grab as much prime property as possible for private gain. In the 1920s, Los Angeles County built a public highway through a private ranch for the express purpose of creating public access to the scenic Pacific view rather than to fulfill any transportation necessity. And in the early 2000s, a California school district attempted to seize land developed by a private high school after the work was already completed.

In all such cases, litigants focused their arguments on whether a particular taking was indeed for public use and whether owners were afforded due process and granted an appropriate amount of compensation. Unfortunately, that doesn’t mean every legitimate use is a wise or just one.

Public Use vs. Public Benefit: The Slippery Slope

In 1945, the District of Columbia Redevelopment Land Agency developed a plan to acquire private property via eminent domain for an urban renewal project. At the time, cities, states, and the federal government were looking at ways to uplift urban slums—a process that would gain steam two decades later as part of President Lyndon B. Johnson’s Great Society programs. The successes, failures, and unintended consequences of those programs are far beyond the scope of this analysis; suffice to say that the expanded use of eminent domain was a crucial part of that process.

A 1954 U.S. Supreme Court decision, Berman v. Parker, set the stage for the eminent-domain battles our nation is still fighting today. Per an analysis by the Connecticut General Assembly:

The Court ruled that the government can transfer property from one private party to another as part of a redevelopment plan that serves a public purpose (i.e., to promote the general physical, aesthetic, sanitary, or economic quality of an area) under the Fifth Amendment and the constitution only requires payment of just compensation to a property owner.

The key issue lies in the subtle distinction between the terms “public use” and “public benefit.” The first, as stated in the Constitution, involves government ownership and use. Should the government take land to build a publicly owned train station, that would constitute a public use—even if some argued the train station was unnecessary or that other, better sites might not have required a taking. It would be far murkier if the government were to give public property to private developers to create a new privately owned office park. This could open the door for governments to use their takings power for any project they claim will benefit the public.

Many debates over that concept transpired post-Berman; however, in 2005, the U.S. Supreme Court addressed the issue head on in its Kelo v. City of New London decision. In this case, the redevelopment agency in New London, Connecticut, seized an entire neighborhood of waterfront-adjacent properties, providing the land to a large pharmaceutical company that planned (but never actually built) a headquarters on the site. Though this project was clearly a private enterprise, the city claimed it would benefit the public as a whole by revamping a prime downtown area.

The court’s decision was significant not just for local residents, but for cities across the country. Almost every state (and many cities) have used redevelopment agencies to combat blight and improve decrepit neighborhoods. Tax-increment financing—whereby agencies float bonds to pay for related infrastructure improvements and then collect the upswing in property taxes following redevelopment—was typically used to pay off the bonds. Eventually, cities learned they could use lax eminent-domain laws to help auto malls, shopping centers, cinemas and even big-box stores build their facilities simply by citing “blight.” Often, the goal was to gain sales-tax revenue rather than to improve genuinely downtrodden areas.

In Kelo, the court ruled such behavior acceptable. Writing for the majority, Justice John Paul Stevens declared: “Just as we decline to second-guess the City’s considered judgments about the efficacy of its development plan, we also decline to second-guess the City’s determinations as to what lands it needs to acquire in order to effectuate the project.” It’s no surprise that the decision quoted extensively from Berman.

The most prescient part of the case came from Justice Sandra Day O’Connor’s dissent: “Any property may now be taken for the benefit of another private party, but the fallout from this decision will not be random. The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms. As for the victims, the government now has license to transfer property from those with fewer resources to those with more.”

The only good news from the majority opinion was that “nothing … precludes any state from placing further restrictions on its exercise of the takings power.” Indeed, many states—spurred largely by widespread public outrage sparked by the decision—decided to tighten up their eminent-domain laws to limit the ability of governments to seize private property on behalf of private developers. The Institute for Justice (IJ), the public-interest law firm that has fought many of these battles on behalf of property owners, reports that since Kelo, 47 states have reformed their eminent-domain laws, 12 put tougher restrictions in their state constitutions, and 11 state supreme courts reined in at least some of the fallout.

So, What About Texas?

Four years after Kelo, Texans approved Proposition 11—which amended Article I, Section 17 of the Texas Constitution to place additional limitations on eminent-domain power—by an astounding 89 percent to 11 percent margin.

IJ gave Texas a grade of B- in its latest review of state eminent-domain laws, explaining that Proposition 11 “bans condemnations based on bogus claims of blight” and requires the government to “declare blight on a property-by-property basis” rather than making “area-wide blight designations,” which “will likely stop large-scale redevelopment based on so-called blight removal.” Additionally, it only allows “for incidental private uses” of the acquired properties. IJ also noted that while the measure restricts governments from using economic development as a primary purpose of a taking, it doesn’t stop them from “circumvent[ing] such language by claiming an alternative primary purpose.” But it’s still better than California (grade D), which passed a post-Kelo measure that incorporates only a few superficial restrictions into the old system.

Texas’ eminent-domain laws require the comptroller to maintain an internet database detailing any government entity that uses eminent domain and any publicly available information about the proceeding, which serves as a public check on eminent-domain misuses. Nevertheless, several areas of controversy remain.

Economic Development by Another Name

Despite better-than-average property rights protections, Texas has not been immune to ongoing controversy surrounding the use of this police power. The state has seen numerous conflicts—especially between business interests and rural landowners—in its pursuit of an aggressive pro-growth strategy emphasizing energy development and infrastructure expansion. While Texas governments are largely restricted from taking properties to facilitate the construction of shopping malls, for instance, they continue to battle over some gray areas in the public-use doctrine. One particular issue centers on the amount of deference the courts should provide to municipalities when determining whether a particular project constitutes public use.

“In Texas, a condemning authority’s own determination of public use presumptively establishes the project’s public purpose in the absence of an abuse of discretion, fraud, or arbitrary and capricious conduct,” wrote Houston-based condemnation attorney Charles McFarland in a recent Bloomberg Law article. “While the rule affording deference to legislative determinations of public use endures in Texas, its hold is crumbling. Dissenting opinions in the Texas Supreme Court have called for a sweeping rejection of the deferential standard, and even majority opinions applying the rule appear only to be waiting for the right case to abandon it altogether.”

McFarland is upset by high-court dissents, namely one case in Rowlett, Texas, where the dissenting Texas high-court justices quote liberally from O’Connor’s brilliant objections in Kelo. They cite one Texas case that makes this point particularly well: “The protection of property rights, central to the functioning of our society, should not—indeed, cannot—be charged to the same people who seek to take those rights away.” Despite our fundamental differences of opinion, McFarland is correct that Texas’ “commitment to public infrastructure … increasingly conflict[s] with conservative and populist notions of when the government should be able to take private property.” Various conservative factions are clearly on a collision course, even in a conservative state like Texas.

Public Use, Private Company

While the Texas Constitution does not allow the condemnation and transfer of property to private parties for economic development purposes, it still allows the state to grant eminent-domain authority to private entities in some circumstances. For example, utilities and some natural gas pipeline companies may use eminent domain for the construction of infrastructure that will serve the public.

The wielding of eminent-domain authority by a private entity is inherently controversial, and it will certainly raise the hackles of those who have witnessed government abuse of this authority. However, it’s important to remember that these pipeline projects are (at least arguably) public infrastructure—and Texas has indeed imposed restrictions designed to limit abuses. A developed natural gas infrastructure is necessary to meet growing energy demand and maintain America’s high standard of living. Some parts of the country—notably California and the Northeast—have seen a significant fall-off in new pipeline construction. The lack of pipeline capacity has raised electric reliability concerns in New England and may drive up prices for electricity and for things like home heating and cooking. By contrast, Texas continues to see robust growth in pipeline capacity. Absent a nationalization of the pipeline industry (which would be undesirable, to put it mildly), private companies will be the ones doing this buildout, for which some form of eminent-domain authority may be necessary.

To square this circle, we must ensure that pipeline companies exercise eminent domain only where doing so serves the public. In Texas, pipeline companies can only receive eminent-domain authority if they are to be “common carriers” that will transport product from any source on non-discriminatory terms once operational.

There have been concerns in the past about how pipeline companies demonstrate their common carrier status. For example, in 2012’s Texas Rice Land Partners v. Denbury Green Pipeline, the Texas Supreme Court held that the then-existing procedure whereby a company merely had to check a box on a form stating their intent to be a common carrier in order to receive eminent-domain authority was insufficient. Today, pipeline companies whose exercise of eminent-domain authority is challenged bear the burden of demonstrating a reasonable probability that they will act as a common carrier.

Signed by Gov. Greg Abbott in 2021, HB 2730—the latest major legislative eminent-domain package—created a Landowner’s Bill of Rights that imposed various conditions regarding timing, compensation and notices on condemning entities. A seemingly reasonable compromise, this bill of rights also applies to ongoing battles over the expansion of electrical lines in the Permian Basin (with a project that could involve the acquisition of 4,000 linear miles of land), as well as to disputes over the construction of a high-speed rail project that would connect Dallas and Houston.

Still, the issue is unlikely to dissipate. Last December, the Texas Republican Party called on the state to enact a litany of eminent-domain restrictions, including proposals that would change the term “public use” to “public necessity” and an outright ban on the use of eminent domain by any private companies that stand to profit from the acquisition.

Abusing Eminent Domain via “Land Banking”

With Texas’ tough post-Kelo rules, one would think residents wouldn’t have to worry about local efforts to promote urban renewal by demolishing entire neighborhoods. However, at least 20 states—including Texas—allow “land banking.” According to the National Housing Conference, land banks are created when local jurisdictions “hold abandoned, vacant and tax-delinquent properties for future development.” These types of projects are ripe for eminent-domain abuse.

In theory, the Texas Constitution’s requirement that condemning authorities specify their planned public use for seized property should preclude land banking in the state—but this is not so clear in practice. In Freeport, located south of Houston along the Gulf Coast, eminent domain was used to demolish most of the historically Black East End neighborhood and make way for possible further expansion of the city’s fast-growing Port Freeport. We say “possible” because although the port’s role in transportation allowed it to use eminent domain under the state’s public-use laws, there were no specific plans in place. While the situation doesn’t involve a municipal land-banking entity, it still constitutes land banking—acquiring properties for some future, undetermined use—and warns us what these policies can do.

As the Houston Chronicle reported last year, although an appeals court rebuked Port Freeport, most of the neighborhood had already been cleared away by the time the residents’ property rights were upheld. Nevertheless, the decision might prevent similar abuses in the future. Per the court:

Even when this case proceeded to discovery, the Port never could identify a specific public use. It admitted that it did not have ‘any specific plans for what will be developed’ because the land would be developed by third party businesses—in fact, said the Port, it would be impossible to plead with any more specificity because the Port doesn’t know what will happen to the property until it is condemned. The Constitution does not condone this take now, plan later approach. The government must tell the court what it plans to do with property so the court can exercise its constitutional duty to assess public use.

Mandatory Flood Buyouts

An emerging eminent domain issue involves attempts to deal with flooding along the Texas coast. Flooding is a recurring problem in Texas; in fact, some properties have flooded so frequently that the government has determined it would be cheaper to buy them than to repeatedly pay out funds for disaster relief and rebuild under state-run flood and storm insurance programs. Ideally, government would not be involved in subsidizing people to live in flood-prone areas in the first place. But as long as this is happening, some type of voluntary buyout program might make sense. Over 1,000 counties have already implemented such programs, relocating around 50,000 households to safer homes.

Of course, a voluntary buyout program doesn’t implicate eminent domain. But what happens when people refuse to accept the buyout? According to the Hazard Mitigation and Relocation Assistance Act, passed by Congress in 1993, local governments have the authority to implement a mandatory buyout program for flood-prone areas. The largest such program to date is currently taking place in Harris County, Texas, where the government is anticipated to forcibly purchase 585 households and 390 businesses to turn the land into green space.  

Moving Forward

Texas has made progress on reining in eminent-domain abuse via Proposition 11 and other measures, but there are further changes to consider. The last session of the biannual Texas Legislature, which concluded last June, failed to pass SB 291 (which would require condemning agencies to disclose appraisals) and SB 292 (which would further expand public disclosures of the survey process). Beyond this, Texas should consider laws restricting the use of land banking and preventing forcible condemnations to minimize flood or windstorm insurance payouts.

Eminent domain will likely always be a source of controversy because it pits two fundamentally important concepts against each other: private property rights and economic growth. While such tensions can never be fully resolved, there are ways to minimize the pain without throwing up needless barriers that would undermine the sources of Texas’ economic success. These battles might never end, but property owners are at least in a better position to fight for their rights in Texas than in the majority of other states.