Final answer:
The government exercises eminent domain when it takes private property for public use, ensuring the property serves the community and providing just compensation. The practice can cause controversy, especially when used for economic redevelopment that benefits private entities. Laws like the Private Property Rights Protection Act aim to restrict such uses of eminent domain.
Step-by-step explanation:
When the government condemns a property and causes it to be sold for the greater good, it exercises eminent domain. Eminent domain is the power of the government to take private property for public use while providing fair compensation to the property owners. This process is subject to a rigorous public benefit test to ensure that the property is being taken for use that serves the entire community, such as transportation infrastructure or economic development.
In cases such as Kelo v. City of New London, the Supreme Court ruled that eminent domain could be used for economic development if it provided a 'public purpose' like jobs or increased tax revenue. This decision and the general concept of eminent domain can be contentious, especially when it involves taking property from one private party and giving it to another, which can be seen as favoring businesses over individual property owners.
Legislation such as the Private Property Rights Protection Act was passed to restrict the use of eminent domain for private economic development, differentiating it from its use for public projects like building roads or hospitals.