The State of Iowa wants to construct a new major highway, which will pass through the edge of a residential subdivision. As a result, the state is exercising eminent domain to acquire those properties that are located where the highway will now sit. The property owners argue that their compensation should be based upon the value of prime commercial property; the state argues that compensation should be based upon the value of residential property.

Is this a proper exercise of eminent domain power that a court would uphold? Why?