Sawgrass,
<I am curious about how those people are compensated for loss in value due to market effeciency caused by external influences. Clearly, houses were not originally built next to a highway,dump, train station,etc
Housing developments occasionally encroach on public nuisances, like smelly slaughter houses. When homeowners attempt to receive compensation from slaughter house owners in such situations by suing for public nuisance, judges routinely apply the doctrine of "coming to the nuisance" and throw the case out of court because the slaughterhouse was there first.
When a public thoroughfare requires you to sacrifice your property, the doctrine of eminent domain is applied and you are entitled to fair market value plus, I assume, reasonable relocation costs.
And when the smelly slaughterhouse attempts to first enter your neighborhood, you sue in equity for an injunction prohibiting it on grounds of public nuisance, or else all nearby property owners privately settle with the slaughterhouse for cash in return for giving up the right to sue.
But when a freeway is built near your house, but not on it, you will not be able to claim that it is a public nuisance. Usually the freeway raises the value of your property by making it more accessible (whether you want this or not) and your only remedy is to sell at a profit and look for another piece of paradise. But if you can make a case for real economic damages, you can request compensation as this is a "Taking". And there is a clause in the constitution, I believe, saying that the government shall not take private property with just compensation. Our founders didn't care for the practice of armies camping out on the lawns of wealth citizens and helping themselves to their crops, livestock, and wealth.
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