You buy the land from individuals and pave it. Eminent domain is relatively rarely used in most road construction - at least in the Northeast, almost every road here used to be a dirt trail two hundred years ago.
There is a natural equilibrium between consumer resistance to selling their land and market demand for roads. If you did not have eminent domain being used to compel home sales for new roads, you get this chain of events:
1. Existent road usages increases and grows congested.
2. Private road companies start offering residents to buy their lots to build new roads, because there is now a profit motive off building new roads, and one of two things happens:
A. They can build the road, increasing capacity, making money, and spurring economic growth.
B. They cannot build the road, and the area withers as businesses and people migrate away to avoid the congestion.
Either way, congestion solves itself, and for the landowners the optimal time to sell would be to sell to a road company - it means your land is at peak value, when demand for new infrastructure is high enough to justify investment, which means your property is as valuable as it is going to get.
It is important to remember when talking about things like private roads that we look at it through the biased lens of a society that has been erected on public roads, where you get told how much you get when your house gets eminent domained and the best you can do is appeal to a court that is also a part of the same state that took your land.
I would also imagine that a lot of homeowners associations would emerge naturally, that make it a stipulation of living in the neighborhood that in the event of sufficient demand for new road construction you be willing to sell at some multiple of inflation-adjusted property value, to guarantee that everyone has some price rather than having holdouts who just refuse for any amount. But it would still be your decision to move into such arrangements, and a lot of people probably would not, but businesses would likewise strongly consider the growth prospects of neighborhoods without strong homeowners association sale bindings on property in the area and avoid regions where they know it is unlikely infrastructure expansion could organically keep pace with demand.
There is a natural equilibrium between consumer resistance to selling their land and market demand for roads. If you did not have eminent domain being used to compel home sales for new roads, you get this chain of events:
1. Existent road usages increases and grows congested.
2. Private road companies start offering residents to buy their lots to build new roads, because there is now a profit motive off building new roads, and one of two things happens:
A. They can build the road, increasing capacity, making money, and spurring economic growth.
B. They cannot build the road, and the area withers as businesses and people migrate away to avoid the congestion.
Either way, congestion solves itself, and for the landowners the optimal time to sell would be to sell to a road company - it means your land is at peak value, when demand for new infrastructure is high enough to justify investment, which means your property is as valuable as it is going to get.
It is important to remember when talking about things like private roads that we look at it through the biased lens of a society that has been erected on public roads, where you get told how much you get when your house gets eminent domained and the best you can do is appeal to a court that is also a part of the same state that took your land.
I would also imagine that a lot of homeowners associations would emerge naturally, that make it a stipulation of living in the neighborhood that in the event of sufficient demand for new road construction you be willing to sell at some multiple of inflation-adjusted property value, to guarantee that everyone has some price rather than having holdouts who just refuse for any amount. But it would still be your decision to move into such arrangements, and a lot of people probably would not, but businesses would likewise strongly consider the growth prospects of neighborhoods without strong homeowners association sale bindings on property in the area and avoid regions where they know it is unlikely infrastructure expansion could organically keep pace with demand.