The 2005 Supreme Court decision in the case of Kelo v. City of New London was shocking to many people, but most especially to conservatives and libertarians. For the first time in American history, local governments now have the right to take property from its owner and resell it to someone else, for whatever reason they deem appropriate. In the years since Kelo, hundreds of local governments have done exactly that, taking homes, apartments, and businesses and reselling them to developers to make shopping malls, more upscale dwellings, hotels, etc.
In a backlash against Kelo, many states have already passed laws to restrict legislatively the new-found eminent domain rights that the Supreme Court “discovered” hidden in the Constitution. These laws vary widely in their form and substance, ranging from restoring the situation to pre-Kelo conditions to very small changes. In this election cycle, California has two propositions designed to limit Kelo takings. Before I discuss my take on them, a little background is in order.
Eminent domain is one form of a government “taking”, where that term has a special meaning in this context. To wit, a government taking is any situation where the government takes something of value from a citizen (whether individual or corporate) without that citizen's agreement. In cases of eminent domain, the government takes a citizen's real property (generally paying market value for it). Traditionally (i.e., before Kelo) eminent domain was used only for cases of development for the public good: highways, rail lines, utility lines, etc. Without eminent domain, such projects would be almost impossible in a city; the patchwork of small property owners essentially guarantees that there will be some who would not voluntarily sell at any reasonable price.
There are many other forms of government takings as well. In California, there are two other commonly used forms: rent control and land use restrictions. Over 100 California cities have rent control laws, artificially (and often arbitrarily) restricting the rent a landlord can charge. This is an uncompensated taking – the government simply removes the ability of the owner to earn money, and doesn't pay a penny for the losses thereby incurred by the owner. The third common form of a government taking is land use restrictions, most commonly from environmental concerns. For example, if a protected bird were to build a nest on the grounds of (say) a hotel, the government can condemn the hotel and prevent its use. Likewise, homeowners can be forced from their homes. In California last year there were over 250 such actions, all of them completely uncompensated.
Proposition 98 is supported primarily by the Howard Jarvis Taxpayers Association (of Proposition 13 fame). It is a broad proposition, aimed at severely curtailing government takings of two types: eminent domain and rent control. In the case of eminent domain, it would restore the use of such takings to the pre-Kelo conditions. In the case of rent control, it would ease the impact of rent control on owners by allowing them to reset rents when a new tenant occupies any given unit. It does not, unfortunately, completely eliminate rent control. It does not address land use restrictions at all. I support Proposition 98 – it's not perfect, and it's not enough, but it's a step in the right direction.
Propostion 99 appears to have been motivated primarily by the fear (of city governments and developers) that Proposition 98 would pass. The giveaway is that it contains language that would negate Proposition 98's provisions in the case that both Propositions passed. Also telling is that nearly all the funding for Proposition 99 comes from developers. Proposition 99 is very simple by comparison to Proposition 98 – it contains a single provision that would restrict the use of eminent domain in the case where the government wants to take an owner-occupied dwelling. Legal analysis of it (including the analysis of the state government in their ballot information!) is that Proposition 99 is legally flawed, and would have essentially no effect on local governments ability to use eminent domain. Proposition 99 does not address either rent control or land use restrictions. In my opinion, Proposition 99 is a sham, carefully crafted to trick uninformed voters into voting for it (and thereby killing Proposition 98). The incredibly misleading advertising I've heard for Proposition 99 reinforces this opinion.
You can read more here and here.
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