Continuing property wrongs since Prop 90's defeat
Sacramento Union Op-Ed
By: Steven Greenhut
10.12.2007
Sacramento Union, October 12, 2007
The Flash Report, September 25, 2007
 Usually, when Americans are fleeced by their government, the fleecing comes in the form of wasteful spending programs. But the U.S. Supreme Court’s June 2005 Kelo decision, upholding the “right” of local governments to take property from their current owners and give it to developers in the name of economic development, was perhaps the most massive fleecing Americans have witnessed in a generation.
Following the court’s ruling, Americans have been robbed of some fundamental property rights. Cities, counties, and other government agencies are now free to take any property – homes, churches, businesses, farms – and give it to a preferred property owner, usually some big, influential developer who promises a city a massive influx of revenue from sales taxes. The only good news is that the Kelo decision has sparked a backlash, as 41 states have passed some level of reform to put limits on these land grabs.
Unfortunately, California has passed only a handful of measures, all of which “were basically a waste of paper,” according to the Institute for Justice, which gave California a D-minus as part of its nationwide rating of state-level eminent domain reform. Property rights activists tried to pass meaningful protection last November, in the form of Proposition 90. This initiative would have banned the transfer of private property to other private parties and forced municipalities to pay owners the value of their property when it is taken by regulatory fiat.
The initiative lost by less than five percent despite a massively funded effort by the beneficiaries of eminent domain and no visible campaign by its opponents. The defeat of Prop. 90 reinforced the Kelo decision, and since then local governments have continued along their merry ways. There hasn't been an avalanche of new takings cases, mainly because city council members fear the reaction from an angry public. Still, some troubling eminent domain and regulatory takings cases have moved forward, and as time moves on, cities will become increasingly aggressive with their activities, knowing that the highest court has approved them.
Before Prop. 90, the owners of acreage in the hills within the city limits of Brea had been fighting “downzoning” efforts. Officials there have been fairly vocal about their goals: they want to stop development in the area and turn the land into permanent open space. The city’s general plan – in effect when most of the owners had bought the property – allowed 2,000 homes to be built on the property. In 2001, officials “downzoned” that number to 1,685 – a reduction of 30 percent, with no compensation paid for the loss in value. The council, at the urging of an activist group, wanted to go further, and it proposed further reductions. In particular, three owners of 814 acres would have lost 95 percent of their development potential, being allowed to build only one house per 28 acres.
City officials were concerned about the effect of Prop. 90 as they planned their actions. They rightly feared that they would have to pay for the property they were taking, and the council decision was delayed until after the election. In the face of bad publicity, the council came up with a “compromise.” One owner, Leo Hayashi, owns 300 acres in the area. He originally was permitted to build 307 homes, but faced a “downzoning” to 15. The compromise would allow him to potentially build 56 homes – still a mugging, but at least in this case the mugger allowed him to keep his wristwatch.
For the most part, post-Kelo and post-Prop. 90, it’s been business as usual for cities. San Diego Voice reported in June that “National City is threatening to use eminent domain to force the Community Youth Athletic Center, a nonprofit boxing gym for at-risk city youth, out of its building … to make way for a planned 24-story complex that would include commercial, retail, office, and residential space.”
It is the same storyline that has been repeated literally thousands of times in California over the past decade: The city wants to redevelop an area that it claims is blighted by taking one person’s private property and transferring it to developers, who will build what city officials prefer in its place. Officials are flummoxed at why those folks refused their “generous” offer to move from their own building to a rented facility. They don’t realize that, in a free society, we all should have the right to say “no,” whether the authorities like the reason or not.
 Meanwhile, the League of California Cities, the California Redevelopment Association, and other beneficiaries of the current un-free situation are still concerned about the lingering backlash at Kelo. They fear that, at some point, some well-funded group will circulate an initiative (getting reform through the Democratic-dominated legislature is hopeless) that truly reforms the state’s eminent domain situation. The Howard Jarvis Taxpayers Association and the California Farm Bureau, for instance, are now circulating a petition for such an initiative, albeit one without protections for regulatory takings.
So the pro-redevelopment/pro-eminent-domain crowd is pushing forward Assembly Constitutional Amendment 8, which pretends to reform eminent domain, but includes so many loopholes and exceptions that it would essentially do nothing – other than lock the current situation into place. This initiative is one of the most devious ones seen in recent California history in that it champions itself as eminent domain reform, but in reality ensures the status quo.
If it or something like it passes, then Californians’ property rights could permanently be diminished. The opportunity for reform will be missed. And the fleecing of Californians will continue, perhaps at an even more alarming rate.
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