Final answer:
Severance damages compensate for the reduction in value of the portion of property remaining after a governmental entity uses eminent domain to take part of the property. This forms part of the just compensation required by the Fifth Amendment to ensure fair recompense to the property owner.
Step-by-step explanation:
The compensation for loss of value to the remaining portion of property after a partial eminent domain action is known as severance damages. The principle of just compensation under the Fifth Amendment requires that a property owner is fully compensated not only for the property taken but also for any decrease in the value of the remaining property as a result of the condemnation. This compensates the property owner for both the physical taking of part of the property and any negative impact on the value of the remainder of the property. Cases like Albert Hanson Lumber Company v. United States have showcased disputes over what constitutes fair compensation. Moreover, the use of eminent domain has evolved over time to include not just public infrastructure projects but also economic developments, as seen in controversial cases like Kelo v. City of New London, and statutes like the Private Property Rights Protection Act aim to adjust and define the extent of eminent domain applications.