Eminent domain is known as a taking—property is taken by the government for “public use.” According to the Constitution, “just compensation” is due the owner when such a taking occurs. However, the value of property can be diminished through other government actions, such as regulations, while the owner retains title to the property. This has been a source of great controversy and is known a regulatory taking.
Wikipedia describes a regulatory taking as
a situation in which a government regulation limits the uses of private property to such a degree that the regulation effectively deprives the property owners of economically reasonable use or value of their property to such an extent that it deprives them of utility or value of that property, even though the regulation does not formally divest them of title to it.
The controversy surrounds the question of when compensation is due the owner. How much value must be destroyed by the regulation before compensation is due?
The issue of regulatory takings has existed for some time. As an example, see in Mugler v. Kansas (1887). But as an explicit doctrine, it first arose in a Supreme Court case titled Pennsylvania Coal Company v. Mahon (1922). Prior to this case, the Court did not regard regulations as a taking.
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