Executive summary

Across U.S. jurisdictions, the headline story is not one single “land grab” mechanism but a portfolio of property-transfer pathways—tax foreclosure, eminent domain, civil forfeiture, and code/blight enforcement—that can convert private assets into public revenue, redevelopment land banks, or private investment returns. Courts have recently tightened constitutional constraints in some lanes (notably tax-foreclosure surplus equity and permit-fee takings doctrine) while being more deferential in others (notably the “baseline” due-process timing requirements in civil forfeiture). 

1) The main seizure pathways and why they’re attractive to governments

A. Tax foreclosure and “surplus equity” retention (the post-Tyler battlefield)

Mechanism: Owner falls behind on property taxes → government (or a tax-lien buyer) takes the property → historically, in some places, the government or investor kept the full value even if it far exceeded the debt.

Why jurisdictions used it: It is administratively simple and financially lucrative, and it can be defended as “just tax collection.”

What changed: The Supreme Court unanimously held in Tyler v. Hennepin County (2023) that keeping value above the tax debt implicates the Takings Clause; the decision recognizes a property interest in surplus equity that cannot simply be confiscated. 

Trend now (2024–2026): A wave of state and local law revisions and litigation over compliance mechanics—how surplus is calculated, notice procedures, claims windows, and whether “reforms” are functionally illusory (e.g., narrow deadlines or procedural traps). Advocacy and practitioner commentary show states actively retooling foreclosure statutes and processes. 

Who benefits (when the old model persists):

Tax-lien investors (high interest rates + the chance to capture equity). Local governments (revenue, reduced admin burdens, sometimes redevelopment leverage). Redevelopment purchasers (properties acquired below market through pipeline effects).

Who benefits (under Tyler-aligned reforms):

Delinquent owners (or heirs) retain equity rather than losing generational wealth. 

B. Eminent domain for redevelopment via “blight” or “economic development”

Mechanism: Government declares an area blighted or designates a redevelopment plan → condemns private property → transfers land to a public project or (controversially) to private developers.

Why jurisdictions use it: It consolidates parcels for large projects; local leaders often see it as a way to expand tax base, add housing, and “reset” underperforming corridors.

Trend now: While the Kelo backlash produced many state-level reforms, blight designations remain a durable workaround, and courts often defer heavily to legislative findings of blight/public use. A recent Missouri redevelopment fight illustrates how “blight” can still function as the gateway to condemnation of operating small businesses. 

Who benefits:

Developers and project financiers (assembled land, reduced holdout risk). Municipalities (new tax base, visible “wins,” infrastructure modernization). Politically connected stakeholders (contracting and planning ecosystems).

Who tends to lose:

Small businesses and homeowners with place-specific value that “fair market compensation” often fails to capture (customer base, relocation friction, community ties). 

C. Civil asset forfeiture (seizure tied to suspected wrongdoing)

Mechanism: Government seizes cash/vehicles/real property alleged to be connected to crime; forfeiture can proceed without a criminal conviction in many regimes.

Why jurisdictions use it: It is a funding stream and an enforcement tool; proceeds may flow to law enforcement budgets depending on state rules.

Courts’ recent direction: In Culley v. Marshall (2024), the Supreme Court held that due process requires a timely forfeiture hearing, but does not require a separate preliminary hearing as a constitutional baseline. Legislatures can still impose stricter safeguards, but the Court did not constitutionalize them. 

Trend now: Continued state-by-state reforms (higher burdens of proof, more transparency, conviction prerequisites in some contexts) alongside ongoing litigation over procedural fairness and incentives. For example, Washington enacted changes slated to take effect in 2026, raising standards and tightening processes. 

Who benefits:

Law enforcement agencies where statutes allow retention/sharing of proceeds. Task-force ecosystems (especially where “equitable sharing” or multi-agency arrangements exist).

Who bears the risk:

Owners not charged (or not convicted) who nevertheless face high friction to recover property, especially when vehicles are essential for work. 

D. Land-use exactions and impact fees (a “soft seizure” of value)

Not every property “seizure” is a deed transfer. Some systems extract value through permit conditions and fees that function like taking a slice of the property’s economic value.

Key development: In Sheetz v. County of El Dorado (2024), the Supreme Court rejected the idea that legislatively imposed fees are categorically exempt from Nollan/Dolan scrutiny; legislative vs. administrative origin doesn’t end the takings analysis. 

Practical effect: Expect more litigation about impact-fee proportionality and nexus—especially in high-growth jurisdictions.

2) What courts are “tending to decide” (a realistic synthesis)

Where owners have gained ground

Tax foreclosure surplus equity: Tyler has become a strong anchor for challenges to “equity theft” regimes and for forcing statutory redesign.  Legislative permit-fee scrutiny: Sheetz broadens the set of fees that may face heightened takings analysis. 

Where deference remains common

Eminent domain via blight/public use: Even after reforms, courts often defer to legislative findings—meaning the fight shifts to (a) statutory constraints, (b) procedural compliance, and (c) the politics of “blight” labeling.  Civil forfeiture baseline process: Culley sets a floor (timely hearing) but does not mandate the stronger protections many critics want; therefore, outcomes hinge heavily on state statutes and local practice. 

3) The beneficiaries map

A useful way to see the pattern is to ask: who captures the “spread” between what an owner owes (or is accused of) and what the asset is worth?

Tax foreclosure (pre-Tyler / noncompliant regimes): Government or investors capture the spread between tax debt and property value.  Eminent domain redevelopment: Developers and municipalities capture uplift from assembled parcels and changed zoning/uses; owners get “just compensation,” which may not cover subjective or relational value.  Civil forfeiture: Agencies can capture value directly (depending on statute), with owners facing procedural and financial barriers to recovery.  Exactions/fees: Jurisdictions capture value indirectly through mandated payments/conditions tied to permissions. 

4) What to watch next (2026-facing)

Compliance litigation after Tyler: lawsuits and settlements where states were slow to reform, plus fights over “claim procedures” that effectively re-create equity loss through process.  Blight as the next major battleground: more “corridor redevelopment” cases testing how elastic blight definitions remain in practice.  State forfeiture reforms vs. federal baselines: jurisdictions raising burdens of proof, tightening timelines, and restricting proceeds distribution—often a legislative, not judicial, story.  Impact-fee challenges post-Sheetz: more suits arguing lack of nexus/proportionality for standardized fee schedules. 

5) Policy options that reduce abusive outcomes without disabling legitimate public aims

Tax foreclosure: automatic surplus return; clear notice; long, simple claim periods; judicial oversight before title transfer; hardship/repayment plans for small arrears.  Eminent domain: narrow blight definitions; heightened proof standards; relocation and business-interruption compensation; independent review of redevelopment-benefit claims.  Civil forfeiture: require conviction for most forfeitures; redirect proceeds away from seizing agencies; prompt post-seizure hearings by statute (even if not constitutionally required); transparency dashboards.  Fees/exactions: publish nexus studies; periodic recalibration; refund mechanisms when projects don’t materialize; individualized review pathway for outliers.