Most people are generally familiar with the legal concept of eminent domain, whereby the government can take private property for public use, upon the payment of just compensation to the property owner. It is found in the Fifth Amendment to the U.S. Constitution, and similarly found in the Iowa Constitution at Article 1, Section 18. The Iowa Legislature has provided that the power of eminent domain to be enjoyed by state agencies and local governing bodies shall be as delegated by legislative act. In the Iowa Supreme Court case of East Oaks Development, Inc. v. Iowa Department of Transportation ("DOT"), 603 N.W.2d 566, (Iowa 1999), the Court determined that the Legislature has not extended this power of eminent domain for development of recreational trials, stating: "...the DOT has no general eminent domain authority for establishing recreational trails or bikeways." Ultimately, the Court determined that the DOT could exercise eminent domain to re-develop a road by placing a bike trail next to it, since such placement of the trail helped improve traffic on the road. The takeaway from the East Oaks case, however, is that the State does not have eminent domain power for the creation of recreational trails.
As property owners, sometimes we are faced with situations where the government (state, county, municipal, etc.) does something that permanently affects the way we enjoy our property. If the property owner is not compensated for this, the legal method through which the property owner can receive compensation is called "inverse condemnation." See Kingsway Cathedral v. Iowa Department of Transportation, 711 N.W.2d 6 (Iowa 2006). Iowa courts have reviewed a wide array of inverse condemnation situations, including: property that consistently floods following road construction projects, ordinances that prohibit nuisance lawsuits for odors emanating from confined animal feeding operations (CAFOs), and zoning actions affecting the use of a property. If successful, the property owner is entitled to the difference in market value of the property before and after the government's action.