What Would California Proposed Initiative 07-006 Do?: Pacific Legal Foundation, 3/20/07

The California League of Cities — the opposite of a property rights group — has put forward a ballot initiative which you can read now on the Attorney General's website. I've been asked to explain what this initiative would do.

First, the initiative is limited solely to "owner-occupied residences," and prohibits them from being transferred to "a private person." It does not protect small businesses, residents of apartments, churches, farms, or any other property. (Also, it applies to residences only if the residents have lived there for at least a year before the condemnation.)

Of course, it's small businesses that are the most common target of eminent domain abuse. Redevelopment occurs in business districts, not in residential areas, so it is rare to see homes taken for redevelopment. But why should a small business — like Ahmad Mesdaq's cigar store, or John Revelli's tire shop — receive no protection? People invest time, energy, and feeling into their businesses just as they do in their homes. A person's self-owned business is virtually the definition of The American Dream.

As James Chen so movingly writes, the reward of owning a small business "comes in personal satisfaction, in autonomy, in deliverance from office politics, in the freedom to make [one's] own mistakes instead of being forced to execute the misjudgments of others. Living by your wits can be risky, but it also makes you feel more alive." Yet although the overwhelming majority of the 223 incidents of eminent domain abuse between 1998 and 2003 involved small businesses, this proposed initiative would do nothing to protect them.

If the reason for this is that homes have greater sentimental attachment than do businesses — a highly questionable prejudice —t hen why are not the residents of apartment buildings protected? Or people who have lived in their homes for less than a year?

Last year, a representative from the California Redevelopment Association testified to the state legislature that they don't condemn homes. Thus this provision would seem quite clearly to be a meaningless sacrifice intended to avert strong property rights protection.

Section (c) of the League of Cities' initiative would creates an exception to the meager protection provided by the initiative. It would allow government to take property and transfer it to private entities whenever doing so was "incidental to" a "public improvement" such as a library, a park, a recreational facility, a train station, &c. In other words, under this proposal, a city could condemn property to build, say, a museum or a public ampitheater, and then surround it with a shopping center built on land taken from private property owners through eminent domain.

Anyone familiar with Victoria Gardens in southern California will find it easy to imagine such a project. Victoria Gardens features a public theater and public library, surrounded by private stores and restaurants. While I don' know whether eminent domain was involved in that project, it would be easy under Proposed Initiative 07-006 for cities to copy that formula and to use eminent domain in the process, even taking owner occupied residences.

What' more, the initiative prohibits the transfer of owner-occupied homes to private persons, but does not define "prvate persons." It defines "persons," but it does not explain the difference between a "private" person and a "public" person. It seems likely that a government-business partnership so common in the world today could qualify as a "public" person, and thereby again evade the restrictions of this initiative.

Sections 3 and 6 of the League of Cities' ballot initiative seem internally inconsistent and potentially dangerous to California property owners. Section 3 says that the initiative is not intended to change the definition of "public use" in California law. This means that the initiative would have no legal effect on Kelo-style takings in California except for the limitation on taking homes for "private persons."

Section 6, on the other hand, says that the term "public use" — which is not defined in the initiative — would be interpreted to be consistent with the law in effect on January 1, 2007, which of course includes the Supreme Court decision in Kelo. Although the initiative is not very clear on this point, it would be easy for California courts to interpret this language as incorporating the Kelo definition of public use (as meaning "public benefit") into the state Constitution.

This is deeply troubling because at present it is not clear that California courts would follow the definition of "public use" provided in Kelo. It is still possible for a property owner to contend that the California Constitution's public use clause should be read as limiting the eminent domain power more strictly than its federal counterpart. Yet this initiative would seem to forcelose that possibility.

Given that, after Kelo, property owners can only hope for protection under their state constitutions, passage of this initiative would seem to expose the owners of California's businesses, the residents of California's apartments, California's churchgoers and farmers, to the abuse of eminent domain, stripped of their last constitutional protection.

Pacific Legal Foundation: https://www.pacificlegal.org