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October 16, 2006

In Defense of California's Prop. 90

Today my Mom, knowing the depth of my support for private property rights and my disdain for Howard Rich's campaign of subterfuge this election season, asked me to advise her on how to vote on California's Prop. 90 – the so-called "Kelo-plus" initiative placed on the ballot using Rich's money. My first reaction was to repeat what I've been hearing and believing all along – that the eminent domain abuse portion of the measure was simply a convenient cover for a Measure-37-on-steroids just compensation measure. I'd read excerpts of the measure before, but decided that before giving my opinion, I would read the full text of the measure. What I found surprised me.

Now I will readily admit I'm no lawyer, and in fact, that's why I'm offering this post – because someone out there is and can correct me if I'm wrong. Because after reading the measure, I think the horror stories are a bunch of crock.

One of the claims opponents make is that if Prop. 90 passes, then any regulation whatsoever that in any way since time immemorial damaged private property, no matter how minutely, must be revoked or compensation paid. The pertinent section of the measure is in item 8, way down under section (b), and it reads:

8. Except when taken to protect public health and safety, "damage" to private property includes government actions that result in substantial economic loss to private property. Examples of substantial economic loss include, but are not limited to, the down zoning of private property, the elimination of any access to private property, and limitations on the use of private air space. "Government action" shall mean any statute, charter provision, ordinance, resolution, law, rule or regulation.

The catch, however, is the context, all of which has been set long before arriving at item 8. Under the "Statement of Purpose," which guides the interpretation of the measure, it is made very clear what the measure is intended to do and it says nothing whatsoever about takings unrelated to the application of eminent domain for public use:

(c) Whenever government takes or damages private property for a public use, the owner of any affected property shall receive just compensation for the property taken or damaged.

The key phrase here is "for a public use." The measure itself defines "public use" in no uncertain terms in section (b):

1. "Public use" shall have a distinct and more narrow meaning than the term "public purpose;" its limiting effect prohibits takings expected to result in transfers to non-governmental owners on economic development or tax revenue enhancement grounds, or for any other actual uses that are not public in fact, even though these uses may serve otherwise legitimate public purposes.

Seeing as how section 8 above provides an exemption for public health and safety, it seems very unlikely to me that the California Courts will determine that environmental protections (which fall under "health and safety" umbrella) or zoning restrictions (ditto) are in some way a taking for a private use in violation of the measure's clear eminent domain context. It seems to me Prop. 90 actually offers quite a bit less protection for private property owners than Measure 37, which, as I've said here before, I still support (yes, I know many of my readers do not, but I love you anyway). As for the term "substantial" in connection with property "damage," interpretations of that term in connection with property rights have long been an extremely subjective matter.

Finally, after reading news reports from California newspapers about the imminent danger posed by Prop. 90, I'm convinced the press has lost all sense of rationality about this measure, just as they did here in Oregon when we passed Measure 37 - and they're also way overstating the negative repercussions of our Measure 37 to try to scare California voters away from Prop. 90. It's the old "They'll put a pig farm next to your home" scare tactic, which is utterly ridiculous as no sane property owner would waste perfectly good residential real estate by building a pig farm on it - and he certainly wouldn't be successful in claiming that being prevented from doing so somehow reduced the value of his land.

Which brings me to another false accusation about this measure - that the State would have to compensate private property owners for all the lost money they could have made if they had fully developed their land to its highest and best use. It is simply not true. The measure doesn't say that and no state has ever compensated people that way. In Oregon, property owners are paid compensation for their property based on its value absent the regulation that restricts future development. In other words, if you lifted the restriction and then sold the property "as is," its fair market value would be the amount of compensation. In California, if Prop. 90 passed it would be even more simple. If eminent domain is used to take any portion of your property or damage its value in any way, then – and only then - you must be fairly compensated for your actual loss. Oh, and by the way, your property can't be taken from you and used for a non-public purpose.

Can someone explain to me what I'm missing here, without launching into an anti-Measure 37 tirade, seeing as how it's a moot point anyway?

Posted by Becky at October 16, 2006 09:55 PM