Prop. 90 purports to protect property owners, but it could also do much harmBy Ray RingBackers of Proposition 90 on California's November ballot describe it as a campaign to rein in a government power called eminent domain that has fallen into disrepute. But the measure would have more widespread - and more pernicious - impact.
Governments at all levels use eminent domain occasionally, when they condemn private property and force the owners to accept a buyout to make room for utility lines, urban renewal and other projects that benefit the public. The practice dates back centuries, but it's become the target of public outrage recently, thanks to a 2005 U.S. Supreme Court ruling that allowed a Connecticut city to condemn the homes of Susette Kelo and six others to make room for a global drug company's 100-acre manufacturing complex. The court didn't endorse the condemnation; it only said Connecticut can enforce its eminent domain laws without federal interference.
Since then, more than 30 state legislatures have either passed or considered laws limiting eminent domain power. An effort stalled in the California Legislature this year when cities and planning advocates argued that eminent domain has not been widely misused and that it's a necessary tool.
Meanwhile, ballot initiatives to reform eminent domain have sprung up in six Western states, including California. And there's a pattern to them, because it's really a single campaign.
The initiatives have titles like the Protect Our Homes Act (in California) and People's Initiative to Stop the Taking of Our Land (in Nevada), as if the government is about to come in with bulldozers to sweep everyone off their property. Yet governments use eminent domain on behalf of developers only a few thousand times per year nationwide.
Reforming eminent domain is partly a smokescreen. The multistate campaign has a bigger target: It aims to choke off governments' ability to pass land-use regulations affecting millions of property owners.
The libertarian Reason Foundation of Los Angeles revealed the strategy in an April policy paper that recommended pushing "Kelo-plus" initiatives to capitalize "on the tremendous public and political momentum generated in the aftermath of the Kelo ruling. ..."
What is the "plus" in these initiatives? Libertarians and property-rights activists believe that many common government regulations on real estate, such as zoning and subdivision limits, take away property value. Therefore, they say, government should either compensate the owners or back off.
This may sound like a good idea, on the face of it. But here's how regulatory takings work: If you could fit 20 houses on your land, plus a junkyard and a gravel mine, and government regulations limit you to six houses, then the government would have to pay you whatever profit you would have made on the unbuilt houses, junkyard and mine. Of course, the government can't afford to pay you, so it would have to drop its regulations, allowing the maximum development, no matter what your neighbors think.
The text of Prop. 90 runs four pages, and almost all the wording plays up the eminent domain angle. The regulatory-takings "plus" is tucked into a few sentences that talk about paying property owners for regulations that damage their property. It says the damage includes downzoning and even "limitations on the use of private air space." The Web site for Protect Our Homes likewise hardly mentions land-use regulations while playing up the specter of bureaucrats who want to take away your home by invoking eminent domain.
This anti-regulation campaign is not as populist as it would like to appear. A few big financial backers have provided almost all the campaign money so far. The pro-Prop. 90 campaign raised and spent about $2.4 million through the end of June. Of that total, $1.5 million came from Howie Rich of New York, who grew wealthy in real estate and owns apartments across the country. He funnels his political money through his Fund for Democracy, which is based in his home. Following the money trail, an additional $600,000 of Prop. 90's war chest came from a Montana group whose supporters include a Chicago-area Libertarian group called Americans for Limited Government, where Rich is chairman of the board of directors; and $200,000 came from Fieldstead & Co., an Irvine conduit for Howard Fieldstead Ahmanson, Jr., a savings-and-loan heir who also backs efforts to establish a "Christian nation" and oppose gay marriage and stem-cell research.
In all, Rich's Fund for Democracy and Americans for Limited Government have given more than $2.75 million to the eminent domain initiatives in California, Nevada, Arizona, Washington, Idaho and Montana. Petition circulators were paid as much as $4 per signature, which gave them an incentive to be persuasive.
For specific evidence of what regulatory takings could mean in California, check out Oregon.
Libertarians and property-rights activists persuaded Oregon voters to approve Measure 37 in 2004. Oregon had the nation's toughest land-use regulations, and some loosening-up was needed, but Measure 37 blew huge holes in Oregon's system. It allowed many longtime landowners to escape regulations for protecting landscapes, the environment and neighborhoods.
Despite delays in Measure 37's implementation caused by court fights, Oregon property owners have already filed about 2,700 Measure 37 claims, aiming to develop about 143,000 acres. The claimants demand that governments either waive land-use regulations or pay nearly $4 billion in compensation. In almost all of the 700 or so claims settled to date, governments have waived the regulations.
Oregon property-rights advocates say Measure 37 will work out fine, rolling back a heavy-handed, inflexible land-use system. "We've had a centralized planning system for so long, it created a lot of animosity in people," said Dave Hunnicutt, president of the state's leading property-rights group, Oregonians in Action.
But many Oregonians - including thousands of neighbors who have written official comment letters on the claims - say the new law is a disaster. Many say the campaign was deceptive.
"The way Measure 37 was presented to the public, prior to the election, they paraded the little old lady who had 20 acres in the ads, they had (her) saying, 'Well, my retirement was going to (rely on the) 20 acres, and I was going to sell 5 acres, and the land-use laws won't let me,' " says Ted Schroeder, a doctor in the rural Grande Ronde Valley in northeast Oregon. "In my naiveté, I thought I was voting to help relieve those sorts of situations." Now, a neighboring family, operating as Terra-Magic Inc., has filed a Measure 37 claim seeking to brush aside agricultural zoning and subdivide 1,400 acres of prime farmland into 335 home sites.
Bill Rose, who breeds specialty grasses on 2,100 acres in the Willamette Valley, about 20 miles south of Portland, says he voted for Measure 37 because he wanted to relax regulations enough to allow modest subdivisions on hilly, unfarmable rural land. Then one of his neighbors filed a Measure 37 claim to convert a 40-acre berry farm into lots one-seventh of an acre for a total of 280 houses. The developer wanted Clackamas County to waive the agricultural zoning or pay him at least $3.6 million. The county had no choice but to approve the claim. Now Rose is making a last-ditch attempt to persuade the county to limit the number of new septic tanks. He says Measure 37 claims "will destroy this valley - the best place to live and farm that I know of."
"It's happening all over Oregon," says Renee Ross, who lives on 32 wooded and pastured acres near Molalla, southeast of Portland. Two of her neighbors have filed Measure 37 claims: One wants to build nine houses on 60 acres, and the other wants to dig a gravel mine on 80 acres. Handcuffed by Measure 37, the Clackamas County government approved both claims. "We went from having a very strict land-use policy to having no policy," Ross says. "We don't have any rights at all. It leaves us no say in the types of surroundings we live in, the undesirable businesses that can be put in right next to our property."
The initiatives on state ballots this year vary in their specifics. California's Prop. 90 would affect all new land-use regulations, other than the bare-bones protections for public health and safety. But like Oregon's Measure 37, Prop. 90 doesn't explain where governments would get money to pay affected property owners. The measure is really intended to prevent any new regulations.
Many California communities have land-use regulations that are not as tough as Oregon's, and many regulations need regular tune-ups. Prop. 90 would essentially freeze the communities' planning efforts, with no chance of altering the rules in the future, even when they are hit with population booms and other significant changes.
Under Prop. 90, it's tough luck if citizens want a new regulation in the future to protect their properties or neighborhood from intrusive development, to put conditions on a Wal-Mart Superstore, to protect stream banks from new construction or to require developers to do anything for open space and affordable housing.
Don't be fooled by ads like those in Oregon in 2004 that featured victims of regulations - or, even more compelling, victims of eminent domain.
In Oregon, a huge coalition opposed Measure 37, including environmentalists, governments, planners, architects, nurses, labor, neighborhood associations, the Oregon PTA and the American Cancer Society. They won endorsements from every daily newspaper in the state. They spent twice as much money as the property-rights side. And they still lost, on what consultants called "the fairness issue" -- the Measure 37 campaign managed to portray government as the enemy of property owners.
To defeat Prop. 90, California's advocates for planning and neighborhood rights will have to win on the fairness issue. They need to find compelling examples of people who are helped by land-use regulations. They need to communicate to voters that one person's rights can be another person's ruin, and that strong regulations often raise property values rather than lower them.
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