WASHINGTON – New York officials, property developers, and residents are closely watching the outcome of a landmark property rights case that comes before the Supreme Court today.

The battle between a handful of Connecticut homeowners and a municipal government that wants to turn their homes over to a commercial developer has the potential to change the ground rules for property disputes nationwide, and it could affect battles over Columbia University’s expansion into Harlem and Bruce Ratner’s proposed Atlantic Yards development in Brooklyn.

The court is being asked to decide whether the broad purpose of “economic development” – and the promise of new jobs and higher tax receipts – justifies the destruction of otherwise unblighted homes whose owners do not want to give them up.

Governments have long enjoyed the right to condemn rundown houses to make way for railroad tracks, highways, and other “public uses” such as military bases. But critics say allowing governments to take private property merely to create a higher tax base takes government power too far and puts a vast array of private property at risk.

The cause of seven homeowners fighting the forced sale of their homes by the City of New London, which wants to make way for a commercial development adjacent to a new research facility built by Pfizer, has drawn the impassioned interest of a rainbow of allies, from free-market advocates to churches and civil rights groups like the NAACP.

The City of New York is among the municipal governments that have filed briefs with the court in the case, known as Kelo v. City of New London. The cities argue that the Constitution permits them broad discretion to condemn land for public use, and that it can be necessary to revitalize economically depressed areas.

Among the supporters of the cities’ view is a group called Brooklyn United for Innovative Local Development, which argues in its brief that the use of eminent domain can be “indispensable” to development and that the Supreme Court must not permit every proposed development to be dragged into federal court by its opponents.

New London claims that the development will create thousands of jobs and generate up to $1.2 million in tax revenues. The homeowners say they have a right to stay in their homes. One resident, Wilhelmina Dery, has lived in her house since she was born there in 1918. The house has been in her family since 1901.

The homeowners are appealing a 2004 ruling of the Connecticut Supreme Court that favored the city.

They have been joined in asking the court to take a narrower view of the government’s powers by groups from across the political spectrum. They include a Brooklyn group, Develop Don’t Destroy Brooklyn, which is fighting a proposed sports arena and commercial development in Prospect Heights, Brooklyn, and the West Harlem Business Group, an association of property owners who do not want to sell land to Columbia University.

“This case will determine whether the State of New York can take my home or the homes of thousands of New Yorkers for private use and private profit,” said a spokesman for the Brooklyn group, Daniel Goldstein.

A civil rights attorney representing the groups, Norman Siegel, said the residents and business owners fear the city could eventually invoke the power, known as “eminent domain” to force them to sell their property. “We face the same issues that the people in New London are facing. If they win, we potentially win,” Mr. Siegel said.

At issue is the proper interpretation of the Takings Clause of the Fifth Amendment, which states, “neither shall property be taken for public use without just compensation.”

Courts across the country have taken differing views of what activities qualify as “public use.” Today’s case asks the court to decide whether “public use” includes the broad category of economic development.

“If nothing more is required to constitute a public use than listing expected tax revenue and job growth that might result from private development, then there is scarcely any private use or business for which the power of eminent domain could not be used,” states the court brief on behalf of the Connecticut families, represented by the Institute for Justice, a legal group.

Houses of worship are also concerned that allowing the Connecticut decision to stand would “declare open season on the taking of religious institutions of all faiths and functions,” according to a brief filed by a public interest law firm dedicated to protecting religious expression, the Becket Fund for Religious Liberty.

“Religious institutions will always be targets for eminent domain actions under a scheme that disfavors nonprofit, tax-exempt property owners and replaces them with for-profit, tax generating businesses,” they wrote in a court brief.

The National Association of Home Builders and the National Association of Realtors have filed a brief arguing that land slated for residential development could be at risk since commercial developments offer higher tax revenues.

The Connecticut decision is “dangerous” for racial minorities, the elderly, and low-income people, argue the NAACP, the seniors’ group AARP, and the Southern Christian Leadership Conference, a civil rights group founded by Dr. Martin Luther King Jr. They argue that the power has been used to target minority neighborhoods.

A specialist on property rights and the Constitution at the University of Chicago, Richard Epstein, authored a brief on behalf of the libertarian think tank the Cato Institute. It asks the Supreme Court to put an end to what they consider to be an incorrect and overbroad reading of governmental power.

As long as economic development is sufficient justification for a taking, then “no property is free from the overhang of state condemnation, which creates massive uncertainties for property owners and discourages private investment that could spur the economic improvements that routinely elude the flat-footed public planners,” wrote Mr. Epstein.

Not all governments are supportive of the power sought by the municipalities.

The Bush administration was expected to file a brief siding with New London, but it did not do so after conservative leaders told the White House in an October letter that, “Filing a brief against property owners in this case would be both disastrous to property rights and a serious affront to the promise of ‘expanding property ownership’ the Administration champions.”

A decision in the case is expected by the end of June.