Plain Avenue, New Rochelle, is a run-down suburban road with two dozen houses, a couple of workshops, a tiny church called St Paul's Refuge Tabernacle and a storage yard for Southern New York Bus Sales. Lying just off Interstate route I-95, a half-hour drive north of New York, it is not what an estate agent would term a highly desirable location. But for people like social worker Sharon Jones it is home. Ms Jones (53) has been living in a two-story wooden house with grey-brick facade on Plain Street since 1964. Her three children were born there. "It's quiet. There are few cars. People look out for each other," she said in her front room, surrounded by framed family photographs.

Ms Jones is so attached to the diverse community - 40 per cent black and 60 per cent white and Hispanic - that when the Swedish furniture company Ikea announced in 1997 that it planned to flatten the area to construct a superstore on a 17acre site centred on Plain Avenue, she joined in a furious campaign to stop them. The Plain Avenue residents had the support of middle-class professionals from gracious homes in the prettier New Rochelle suburbs like Larchmont, who fretted about the impact on home values of 1.1 million cars a year arriving at Ikea. Parents, lawyers and community groups crowded into public meetings and started phone chains and a leaflet campaign, arguing that an Ikea store would jam the quiet streets with unwanted traffic.

There are already two Ikeas in the New York metropolitan district, buildings as big as aircraft hangers selling ready-to-assemble furniture to shoppers from all over the city. A public hearing on Ikea's environmental impact statement in November had to be extended for five nights and, in the end, only four people spoke in favour of the project with 222 against.

A columnist in the local Journal News called Ikea a "smiley-faced satanic sign of incipient urban sprawl" that must be stopped "if there is a shred of justice left in this money-obsessed world". Despite the furore, the Swedish company began buying up property around Plain Avenue, spending millions of dollars to acquire 70 per cent of the site - which comprised 34 homes with 160 residents, 29 businesses and two churches. It offered to build a new church and to allow residents a year rent-free to look for other accommodation.

Some householders sold out because they grew tired of the uncertainty. Limousine owner Mr Ismael Victoria said Ikea "liberated" him by buying his problem-ridden three-family house at a better price than he could have got on his own. But, overwhelmed by the fierce opposition from the majority of New Rochelle residents, Ikea suddenly announced last week that it was pulling out and going elsewhere. Mr James Gdula, a spokesman for Ikea, appeared with New Rochelle Mayor Timothy Idoni to tell reporters that Ikea could not address the concerns of the residents, or afford revised proposals to build a direct access road from I-95 to a car park. "The proposal is not in our mutual best interests," he said. The decision represented a major victory for communities through suburban America, where concern is growing about the erosion of the quality of people's lives resulting from the arrival of big stores and malls.

It was also a triumph over the perceived misuse of the power given to local government to seize people's homes. Under the laws of eminent domain in the United States, government entities have the right to impose a compulsory purchase order on private property to make way for a public facility like a school, hospital or roadway, as long as the home owner is compensated at fair market value. In recent years, government officials have increasingly condemned property to make way for car plants, hotels and casinos, arguing an industry that creates employment could be considered a public facility. In practice it often strips one property owner of land to enrich another private owner. Opposition to such decisions by local authorities is growing, and in many cases succeeding. Property developer Mr Donald Trump tried to use eminent domain to force out the owners of a boarding house, a pawn shop and an Italian restaurant in Atlantic City, New Jersey, so he could expand his Trump Plaza Hotel and Casino. After years of litigation, a Superior Court judge ruled that New Jersey's casino development authority could not use eminent domain to condemn the properties just so that the lots could be turned over to the casino. In Pittsburgh, Pennsylvania, Mayor Tom Murphy refused to rule out using eminent domain to clear 60 houses for a $522 million (€561 million) shopping and entertainment district downtown, but scrapped the project in November in the face of intense opposition. In 1999 New Rochelle officials declared the area around Plain Avenue to be blighted, the first legal step for eminent domain proceedings. The fear of eminent domain in Plain Avenue drove some people like 80year-old Ms Bertha Sumner to sell to Ikea rather than wait for probably less-generous state compensation. She is now looking for a nursing home to take her in. Ms Jones, wearing a tee-shirt with the words "Walk your body - stretch your mind" said angrily that it was no use offering cash compensation to people who could not cope with moving. Ikea officials approached her with an offer for her house but she wouldn't sell. "For me this home has a lot of memories and it is not convenient to pack up and relocate just because a furniture store is coming," she told me. "I said to Ikea: `The only way you get me out of here is you get me a new house.' " Ms Jones and her neighbours are not rejoicing as much as the residents of the more affluent avenues nearby. Plain Avenue has become more run down since Ikea started buying up lots, and property values have suffered. "I am greatly relieved," she said, "but I wonder what does the city have waiting for us?"

New Rochelle officials still plan to offer the entire 17-acre Ikea site for smaller developments, though the mayor said that some residential areas might be allowed to remain. "We have not ruled out eminent domain, but that doesn't mean we're going to come flying in and do it," he said.