What legal term describes a situation in which a government action reduces the value of private property?

The situation where a government action reduces the value of private property is best described by the term "inverse condemnation." Inverse condemnation occurs when a property owner asserts that their property has been effectively taken by a government action that has not resulted in formal condemnation proceedings. This situation arises when, typically through zoning changes, infrastructure projects, or other government actions, the value of the property decreases, leading the owner to seek compensation for the loss in value.

Eminent domain, on the other hand, is the government's power to take private property for public use, with compensation offered to the owner. While it is related to government actions affecting property, it specifically involves an official taking of property, which is different from the reduction of value without a direct taking.

Regulatory taking is a concept that describes when a government regulation limits the use of private property to the extent that it effectively deprives the owner of all economically viable use of their property, which may lead to the necessity for compensation. While similar, it is not the most accurate term for a situation where value is simply reduced.

Fair market valuation refers to the process of determining the value of property based on what it could sell for on the open market, which does not address the impact of government actions on property