Economic Analysis of Social Issues 1st Edition by Alan Grant

Exercise 31

Klaus owns the oldest house in Montgomery County. His house, a site of historical significance, is the only remaining example of Greek Revival architecture within a 200-mile radius. Visitors often drive through town just to see his house. Lately, Klaus has been complaining about the high cost of heating and cooling such an architectural reli c. Yesterday he announced plans to demolish the house and replace it with a small, energy-efficient home. There are 10,000 people in town, each of whom is willing to pay $30 to save the original structure. Klaus would be willing to sell his house and move to a different neighborhood for $250,000. Explain why Klaus's home is likely to be demolished. Should the county use its takings power to seize Klaus's home? Would such a taking satisfy the constitutional requirements for eminent domain?