Three months ago, the Supreme Court had another chance to fix one of the worst decisions it's issued this century. On March 24, 2025, the justices declined to hear Bowers v. Oneida County Industrial Development Agency — a case in which a New York government agency seized a developer's contracted land and handed it to a business competitor for a parking lot. The Institute for Justice asked the Court to use the case to overrule Kelo v. City of New London. The Court said no. This Tuesday marks the 21st anniversary of the original ruling, and there's still no federal correction in sight.
Here's what Kelo did: it took the Fifth Amendment's plain phrase "public use" — roads, schools, genuine public infrastructure — and let courts read it as "public purpose," meaning whatever a city council decides looks promising on a spreadsheet. As Justice Sandra Day O'Connor wrote in dissent, "Under the banner of economic development, all private property is now vulnerable to being taken and transferred to another private owner..." She wasn't being hyperbolic. She was describing the law as it now exists.
I've spent 30 years in the rooms where capital actually gets deployed: structuring private equity deals, advising family offices, testifying as an expert witness on fiduciary duty and property matters across multiple states. Property rights aren't an abstract theory to me. They're the floor that lets working families build something durable, pass something on. Kelo told those families their floor was subject to renegotiation whenever a more tax-productive tenant could be found.
Susette Kelo and her neighbors in Fort Trumbull, Connecticut, weren't squatters. Some had owned their homes for generations. New London wanted the land for a development plan anchored by a new Pfizer research facility: hotels, condos, offices, a revitalized waterfront, and hundreds of jobs. Classic government optimism. The 5-4 majority, written by Justice John Paul Stevens, held that economic development qualified as a public use under the Fifth Amendment. Justice Clarence Thomas was sharper in dissent: he warned that these takings fall hardest on the poor and politically weak — the very people the Takings Clause was written to shield. Not from private actors. From the government itself.
Here's the punchline. New London won in court, bulldozed the neighborhood, and spent the next two decades staring at a vacant peninsula. Pfizer pulled out in 2009 before its tax abatements even expired. Development finally began in 2022-2024 — and only after a developer asked the city for $6.5 million in tax breaks over 20 years to make the numbers work. The attorney representing the developer told the city council the site had been "vacant and not generating property taxes for literally a generation." That's the public-purpose machine at full speed.
Thomas's dissent aged well. These takings don't target wealthy, connected neighborhoods. They target blocks where resistance is cheap, and lawyers are scarce. I've watched the same dynamic in California, where 400 redevelopment agencies spent decades seizing property for hotels, auto malls, and big-box retailers — all under the banner of blight elimination. California dissolved those agencies in 2012, then quietly resurrected them in 2015 under a new name with fewer restrictions. Kelo gave constitutional cover to the idea that your property exists at the sufferance of whoever controls the zoning board this cycle.
Justice O'Connor saw this coming with uncomfortable precision in her dissent: "The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms." She was quoting a scenario. Thomas Sowell would recognize it as a pattern — what he calls the vision of the anointed, the assumption that officials and their preferred private partners know better than you what your property should become. The Founders built the Public Use Clause precisely to block that assumption from becoming enforceable government policy. Five justices in 2005 disagreed.
The public backlash after 2005 was real. Forty-seven states strengthened their eminent domain laws through legislation, constitutional amendments, or court decisions — twelve went all the way and amended their constitutions to bar economic-development takings outright. That's the good news. The bad news: three states changed nothing, loopholes survive in many of the 47, and federal courts still operate under Kelo's permissive standard. The Bowers case showed exactly how the doctrine enables abuse wherever state law didn't close the door. The Supreme Court's refusal to take that case in March means the federal baseline is unchanged.
The fair objection is that most local governments don't run around seizing homes for private developers on a regular basis. Eminent domain, properly used for genuine public infrastructure, is a legitimate and constitutionally grounded tool with a long history. But a doctrine doesn't have to be routinely abused to be dangerous. The standing invitation is what matters. A budget-strapped city, a well-connected developer, and a credulous planning commission are all that's required. The standard the Court set in 2005 — and reaffirmed by inaction in March 2025 — supplies the rest.
Milton Friedman understood that secure property rights are the bedrock of both freedom and economic productivity. When people can't be confident that what they own will still be theirs next year, investment dries up, communities stagnate, and the productive are punished for building things worth taking. Twenty-one years after Kelo, that principle hasn't dated. States must keep closing loopholes. Congress should pass meaningful federal limits on economic- development takings. And the next time a case lands at the Supreme Court that gives the justices a chance to read the Fifth Amendment as written, they should take it — and correct what five justices got badly wrong in 2005.
As a business owner and father of a West Point graduate, I was raised with a straightforward understanding of rules: they exist to protect people, not to give the powerful an orderly process for taking from the weak. You don't seize a man's home because someone else might generate more tax revenue from the parcel. That's not governance. The little pink house in Fort Trumbull became a national symbol because it told a truth most Americans recognized on sight: without property rights, all other rights are negotiable. Twenty-one years on, that truth is unchanged. What's changed is that we're running out of excuses not to fix it.
Jay Rogers is President of Alpha Strategies and a financial professional with more than 30 years of experience in private equity, private credit, hedge funds, and wealth management. He has a BS from Northeastern University and has completed postgraduate studies at UCLA, UPENN, and Harvard. He writes about issues in finance, constitutional law, national security, human nature, and public policy.