Analysis of Right-of-Way Acquisition Costs: Case Studies in Minnesota

Urban counties and cities spend a significant amount of transportation projects budget on right-of-way (ROW) acquisition and it continues to become more expensive, difficult, and time consuming for project implementation. This study analyzes the cost of ROW acquisition and the pattern of condemnation cases before and after the eminent domain law change in 2006 in Minnesota. The eminent domain law is supposed to protect property owners from the government taking their property at unreasonable value. However, many practitioners believe that the law change has caused a significant cost increase to the ROW acquisition process. ROW acquisition costs may include market value of parcel, cost damage done to the remainder of the land, condemnation or litigation costs, and delay costs associated with acquisition of the parcel. To investigate the historical trends of ROW acquisition costs, case studies are conducted at three different levels: 1) state highway agency, 2) urban counties, and 3) individual projects. It is found that urban counties are facing more condemnation cases for parcels located in urban area when compared to ROW acquisition cases in rural areas. As such, the case studies were carefully selected to identify the barriers that hinder the ROW acquisition process. The historical trends indicate that there is a significant difference between the acquiring agency’s initial appraisal and the final award amount in condemnation cases. This difference has caused a significant increase in the agency ROW acquisition costs. The study also identifies the root causes of ROW acquisition cost increases. Additionally, potential solutions for minimizing the negative impacts of ROW acquisition are also proposed. A total of six barriers and their root causes are identified.