Considering its modern importance, the original purpose of the Takings Clause is surprisingly obscure. Most provisions of the Bill of Rights were requested in some form as the states ratified the original Constitution. The Takings Clause was not. Representative James Madison added it for unexplained reasons as he sifted through the requested amendments to propose a slate of them. There were a few historical precedents for the clause. The Northwest Ordinance contained a just-compensation requirement. Two colonial charters and two state constitutions had such a requirement as well. Other states sometimes provided just compensation by custom or due process. But there was virtually no recorded discussion about the Takings Clause itself.

The origins of the clause are still more enigmatic in light of the background of limited federal power. It has been argued that the original Constitution did not grant Congress the power of eminent domain within the boundaries of a state. Indeed, in 1845, the Supreme Court declared that “the United States have no constitutional capacity to exercise . . . eminent domain” in the states. Pollard’s Lessee v. Hagan (1845). Under this theory, neither Congress’s enumerated powers nor the Necessary and Proper Clause grants a general power of eminent domain.

Whether or not that is so, Congress did not generally exercise such a power. For the first seventy-five years of the republic, when Congress authorized federal roads, lighthouses, fortifications, or military bases, it relied upon the states to exercise eminent domain over land for the federal project. Congress did exercise eminent domain in areas where it had plenary power under the Constitution, such as the District of Columbia and occasionally the territories. It also may have occasionally taken property in other ways, such as the temporary impressment of personal property for military purposes. But neither of these methods was commonplace. Hence, the clause’s purpose and original scope can sometimes be difficult to discern.

Under modern doctrine, the Takings Clause is of much greater importance and its zone of application is much broader. Beginning with its decision in Kohl v. United States (1875), the Supreme Court has recognized a federal power of eminent domain. The Court has alternately suggested that the power is granted by the Necessary and Proper Clause, United States v. Gettysburg Electric Railway Co. (1896), that it is granted by implication of the Takings Clause itself (despite the Ninth Amendment), or that it is an inherent power of sovereignty whose specific enumeration is unnecessary, United States v. Jones (1883). Whatever its source, the power is seated in Congress, not the executive. Furthermore, the clause, like most of the Bill of Rights, has been held to be incorporated by the Fourteenth Amendment and thus applicable to the states. In fact, a requirement of just compensation was the first element of the Bill of Rights held to be part of the Fourteenth Amendment’s Due Process requirement. Chicago, Burlington & Quincy Railroad Co. v. Chicago (1897). Thus, the clause applies today to takings by any government—federal, state, or local. A state’s power to exercise eminent domain derives, like the police power, from the state’s inherent sovereignty.

The Fifth Amendment’s protections are triggered only when the property at issue is “taken” and when it is “property” as defined by applicable state or federal law. For purposes of the clause, property need not be land (real property), but can be personal property, such as bank accounts, Webb’s Fabulous Pharmacies v. Beckwith (1980) or intangible property, such as trade secrets. Ruck-elshaus v. Monsanto Co. (1984).

There are a range of government actions that affect the value or use of property—some of which are clearly takings, some of which are more subject to doubt. It is easiest to see that there has been a taking when the government formally “condemns” property and takes legal title to it. Such an exercise of eminent domain is the paradigmatic example of a taking. But as noted above, the federal government rarely exercised eminent domain in the generations after the Founding, and today the hard takings questions occur when there is no formal condemnation.

Even when there has been no formal condemnation, the courts have held that there is a taking any time the government authorizes a “permanent physical occupation,” even of only part of the property. Loretto v. Teleprompter Manhattan CATV Corp. (1982). The Supreme Court made a similar ruling as early as 1871, concluding that a government-authorized flooding was a taking of property. Pumpelly v. Green Bay & Mississippi Canal Co. (1871). There is some historical basis for this rule: state courts frequently confronted similar problems in the nineteenth century under state “mill acts,” which let one landowner dam a river for a mill, permanently flooding neighboring properties.

Temporary physical occupations can also be takings for purposes of the clause, First English Evangelical Lutheran Church v. Los Angeles County (1987), but temporary occupations are judged by a less categorical analysis. Recent Supreme Court decisions have said that they “are subject to a more complex balancing process to determine whether they are a taking,” and that there is no “magic formula” for evaluating them. Arkansas Game & Fish Comm’n v. United States (2012).

Regulations of land pose even harder questions. There were regulations of land at the Founding, but there is no evidence that land-owners were compensated during this period. At the Founding, regulations of land generally did not give rise to claims for compensation. But in the early twentieth century, the Supreme Court created a doctrine of so-called “regulatory takings.” Justice Oliver Wendell Holmes wrote for the Court that “while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking.” Pennsylvania Coal Co. v. Mahon (1922). The doctrine has been criticized for lacking a historical basis, especially in light of the Founding-era practice of uncompensated regulations, and an opinion for the Court by Justice Antonin Scalia has conceded that “early constitutional theorists did not believe the Takings Clause embraced regulations of property at all.” Lucas v. South Carolina Coastal Council (1992).

On the other hand, some scholars have suggested that the implications from the history are not so clear cut. It is possible, for example, that the early regulations were consistent with a background theory that still prohibited some regulatory takings. In particular, it has been argued that early uncompensated regulations were limited to those consistent with the owners’ natural rights, whereas regulations that violate natural rights require compensation. Alternatively, it has been argued that the purpose and structure of the Fourteenth Amendment, as well as judicial decisions between the Founding and the ratification of that amendment, justify a doctrine of regulatory takings against state governments under the Fourteenth Amendment, even if none was originally established against the federal government under the Fifth Amendment.

At any rate, under modern doctrine, regulations of property are sometimes, but not frequently, held to be takings. The general principle is that the government is forbidden “from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.” Armstrong v. United States (1960). In making this “essentially ad hoc” determination, the Court has particularly emphasized “the economic impact of the regulation on the claimant,” the interference with “distinct investment-backed expectations,” and “the character of the government action.” Penn Central Transportation Co. v. City of New York (1978).

In practice, courts rarely find that a regulation qualifies as a taking under this test. Zoning regulations, for example, are almost never held to be takings. Village of Euclid v. Ambler Realty Co. (1926). However, there are a few specific types of regulation that are categorically considered takings—for example, a regulation that deprives an owner of all economically viable use of the land, Lucas v. South Carolina Coastal Council, or a regulation that unfairly conditions the grant of a governmental permit upon the forfeiture of a physical property interest or the exaction of inappropriate fees. Nollan v. California Coastal Comm’n (1987); Dolan v. City of Tigard (1994); Koontz v. St. Johns River Water Management District (2013).

The Takings Clause has also long been held to require that the taking be “for public use.” In other words, it must not take property from one person and give it to another for purely private gain. As a purely textual matter, the clause is ambiguous about such a requirement. It is possible to read the clause as simply describing the conditions under which property will be taken. Indeed, one might say that the enumerated powers doctrine independently requires all federal takings to be for a public use, and hence that any federal taking that is within the enumerated powers is necessarily one for public use. One could also read the clause as limiting compensation to takings for public use, while providing no compensation if the taking is for private use.

The conventional reading of the Takings Clause, however, infers an independent public use requirement. This avoids rendering the “public use” phrase redundant and avoids the strange result of leaving takings for private interest without compensation. It is also the view taken by many state courts throughout the nineteenth century in the course of interpreting their own state constitutional law. As with the regulatory takings doctrine, it is possible that the original meaning of the Fourteenth Amendment incorporates a public use requirement against the states even if the Fifth Amendment was not originally understood to apply it against the federal government.

There has been controversy over how to define a “public use.” As an original matter, given the text’s focus on “use,” one might have thought that the property taken must be usable by the public—either by a government entity or a private entity obligated to grant access on broad and neutral terms, like a common carrier. Again, many nineteenth-century state courts interpreted the requirement in this fashion, as when the courts allowed eminent domain for railroads to claim a right-of-way or for flooding under the “mill acts” mentioned above.

Throughout the twentieth century, however, the Supreme Court has only required the taking to have a public purpose rather than requiring that the property be used by the public, and it has gradually adopted a more relaxed view of that public-purpose requirement. In Berman v. Parker (1954), it upheld the use of eminent domain to condemn blighted property for urban renewal, saying that “the legislature, not the judiciary, is the main guardian of the public needs to be served by social legislation.” In Hawaii Housing Authority v. Midkiff, (1984), the Court unanimously approved the State of Hawaii’s breaking up of large landed estates to transfer titles from the landowners to smaller lessees on the principle that the people of Hawaii were breaking up a “land oligopoly traceable to their monarchs.”

Most recently, the Court invoked the “diverse and always evolving needs of society” to conclude that governments have “broad latitude in determining what public needs justify the use of the takings power.” Kelo v. City of New London (2005). In Kelo, the Court allowed a local government to take a private home and give it to a private corporation for purposes of economic development. It was a closely divided and extremely controversial decision, prompting Justice Sandra Day O’Connor to write in dissent, “The specter of condemnation hangs over all property.” The unfavorable reaction to the five-to-four decision in Kelo resulted in state laws designed to increase protection for property holders throughout much of the country.

When property has been taken for public use, the Takings Clause mandates “just compensation.” At bottom, the exercise of eminent domain is a forced sale. Obviously, the amount of this compensation requires a case-specific inquiry. In principle, the Court has said, just compensation means that the owner “is entitled to be put in as good a position pecuniarily as if his property had not been taken.” Olson v. United States (1934). It has also said, however, that “serious practical difficulties” preclude giving “this principle of indemnity . . . its full and literal force.” Instead, the owner is awarded the “fair market value” of his property, even if that is less than his true loss. United States v. 564.54 Acres of Land, More or Less (1979).

A few kinds of takings, as a matter of law, are non-compensable. The confiscation or destruction of property during military hostilities, for example, is normally non-compensable. United States v. Caltex (1952). But when compensation is due, in normal takings situations, the amount awarded may well depend on who awards it, judge or jury. Early eminent domain proceedings varied as to whether juries, judges, or other officials were in charge of determining just compensation. More recently, the Supreme Court has said that “there is no constitutional right to a jury in eminent domain proceedings,” United States v. Reynolds (1970), but in the different context of a “regulatory taking,” landowners do have the right to a jury trial. City of Monterey v. Del Monte Dunes at Monterey (1999).