Tag Archives: eminent domain

October 31, 2007 Blog Roundup and Open Thread

Today’s Blog Roundup is on the flip. I’m experiencing some ennui this evening, so it’s just a link dump. Let me know what I missed in comments, or just use this as an open thread.

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October 30, 2007 Blog Roundup and Open Thread

Today’s Blog Roundup is on the flip. Let me know what I missed in comments, or just use this as an open thread.

To subscribe by email, click
here and do what comes naturally
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Wildfire Coverage Winding
Down

Local News

Propositions

Health Care

Everything Else

Quick Thoughts on Rent Control and Property Rights Extremism

Amendment V. “…nor shall private property be taken for public use, without just compensation.”

In 1791 the United States Congress, comprised of property owners, passed the above as part of the Bill of Rights, designed to strictly limit the powers of the new federal government. Over the years this has sufficed for most as a balance between individual property rights and the need to subordinate those rights, on occasion, to the public good. Combined with the Fourteenth Amendment this provision ensures that any taking of property will be compensated fairly.

However, in the 200+ years that have elapsed, a more extreme view has emerged. To believe that the Constitution is an insufficient guarantee is to take a radical view of property rights. It assumes that not only does one have a right to own property, but to derive the maximum amount of income possible from that property no matter what method is used to attain it. That extremist view was not held by those who authored the Constitution, or by courts that have for 200 years been interpreting that Constitution, or by those who have been making law under that Constitution.

And if one has that extremist view of property rights – that private ownership of property is not or should not be subject to any controls or limits of regulations – THEN you will see eminent domain in the same category as rent control, as environmental laws, etc.

Here in California this view is promoted by, among others, the Howard Jarvis Association. And that’s why they use eminent domain as a wedge to push unpopular and unfair ideas like ending rent control – not just because they enjoy Trojan Horses (though they surely do) but also because it fits their extremist logic.

Most Americans instead believe that the public should be able to legislate the use of property, within reasonable bounds. Very few Americans have agreed with the extremist view that any regulatory act is a “taking” – as the rejection of Prop 90, I-933, and Howie Rich’s other efforts last year proved.

Now to rent control. The notion that rent control actually hurts renters, that they’re better off without rent control, is a theory that only makes sense in an Economics Department seminar room. In lived reality rent control has been proved to be the far greater aid to renters.

The argument against rent control – one that we’ve seen employed in these comments – is that it creates a disincentive to build new rental housing stock, creating a demand crisis and driving up rents. But California rent control laws have been significantly weakened since Costa-Hawkins passed in 1999. And yet rents are STILL sky-high, are STILL unaffordable, and very little new rental stock has been added in California in the last 8 years, certainly not enough to meet the demand.

It’s not just in SF where this is a problem – the Central Valley and Southern California experience this crisis too. In Seattle, where rent control is barred by state law, a massive building boom has done nothing to increase the supply. The theory has failed. The absence of rent control has done nothing to aid renters through supply and demand.

Why has the theory failed? Because it assumes rental housing markets exist outside of other real estate markets. San Francisco, for example, has had a housing crisis for nearly 70 years. With land values being so high in the urban cores, it is extremely expensive to redevelop existing blocks to hold more rental units. To recoup the cost, a developer would have to rent the units out at a rate much higher than most folks can afford. Further, in a hot housing market, developers can make much more money building condos. Worse, landlords can make more money by converting apartments to condos.

Instead of being helped by supply and demand, renters face unaffordable rent increases, as Paul Hogarth explained earlier this week. Paul Rosenberg has written today about the California Budget Project study that demonstrated the actual cost of living to Californians is far higher than the federal poverty line. Much of that comes from housing costs, hurting renters in particular.

Any of us who rent have felt this first-hand. I was hit with three $100 increases in my rent in the year before I moved down from Seattle. Here in CA I’m thankful we’ve not had any rent increases so far, but I fully expect one before long.

Renters do not have the earning power to absorb these hits. Renting is an inelastic market. It does not quickly respond to demand pressures. Those who face huge rent increases have two choices – pay or move. Because rental units are in such short supply, moving is not always an option.

And thus the need for rent control. Rent control *works* because its intended purpose is to protect renters from being bankrupted.

Further, it’s democratic. This is ultimately what I do not understand about the anti-rent control argument. Why is it wrong for voters to regulate the market in which they live? Why is democracy bad when it comes to business? Why should an abstract theory be given precedence over our sovereign rights as citizens and as voters?

The Return of Prop 90!

Well, it looks like it’s going to happen. The Right wingers aren’t ones to give up just because they got rebuffed once.  They’re at it again, and, if you believe them, they’ve got the signatures to get on the ballot:

Today, Californians for Property Rights Protection announced that the campaign has collected well over 700,000 signatures needed to qualify the California Property Owners and Farmland Protection Act for the June 2008 ballot. In order to qualify the eminent domain reform ballot measure, supporters must collect 694,354 valid signatures by November 26, 2007. The campaign is on track to submit more than 1 million signatures before this deadline. Link here

More on this proposition over the flip and why this is, yet again, a trojan horse.

You see, the Howard Jarvis folks don’t really care all that much about eminent domain, because it doesn’t really affect that many of their kind of people, or truthfully, any kind of people. But, it sounds really bad, and it polls well for them.  So, they use it as a trojan horse. That’s what they did with Prop 90, and that’s what they are doing this time.  This time, it is rent control that’s on their mind. I think it would also eliminate many of the “below market rate ownership” programs in San Francisco and across the state.

Why rent control? Hell’s if I know, but it’s what they are going after. They draw some tangential link by making some right to do whatever you damn well please with your property.  So, here’s some snippets. Read the whole thing here.

Section 19 of Article I of the California Constitution is amended to read:

SEC. 19(a) Private property may be taken or damaged only for a stated public use and when just compensation, ascertained by a jury unless waived, has first been paid to, or into court for, the owner. The Legislature may provide for possession by the condemnor following commencement of eminent domain proceedings upon deposit in court and prompt release to the owner of money determined by the court to be the probable amount of just compensation. Private property may not be taken or damaged for private use.

(b) For purposes of this section:

(1) “Taken” includes transferring the ownership, occupancy, or use of property from a private owner to a public agency or to any person or entity other than a public agency, or limiting the price a private owner may charge another person to purchase, occupy or use his or her real property.

Tex Mex

Read about it here

The scoop: Last year, Sacramento forced the doors closed on K Street’s Tex Mex restaurant.  While the city gave millions of dollars in incentives to an upscale chain restaurant just blocks away, Tex Mex’s owners were never offered the opportunity to stay and improve their business.

UPDATE by Brian: Please use the open threads (which we will try to post more regularly) for one line links.  Here is the current open thread.  This thread has been closed.

Any defenders?

California Property Owners and Farmland Protection Act

Government Acquisition, Regulation of Private Property. Constitutional Amendment

Bars state and local governments from condemning or damaging private property for private uses. Prohibits rent control and similar measures. Prohibits deference to government in property rights cases. Defines “just compensation.” Requires an award of attorneys fees and costs if a property owner obtains a judgment for more than the amount offered by the government. Requires government to offer to original owner of condemned property the right to repurchase property at condemned price when property is put to substantially different use than was publicly stated. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local government: Increased costs to many governments due to the measure’s restrictions. The fiscal effect on most governments probably would not be significant.

For the Legislative Analysis: http://lao.ca.gov/ba…

I could go on and argue in favor of property rights, but I did that in my rant against ACA 8. I don’t want to be repetitive

Instead, I am going to talk about the California Property Owners and Farmland Protection Act, and why this initiative is the right way to go.

*This gives equal protection to ALL private property. People’s constitutional rights are not increased or decreased based on the kind of property they own

*This still allows property to be taken for public use. It still allows to take property for public use and contract out

*Along with not being allowed to take property for private use, government also may not be taken for the same use as the current owner (i.e. taking an apartment complex and replacing it with public housing)

*Government may not take land for the purpose of selling the natural resources

*If the government takes the property under false pretenses or abandons its plans, the owner may repurchase it for the original price and have its tax assessed at the value where it was originally condemned. So they can’t take property, abandon their plans, resell it to them as a backdoor way to increase people’s taxes.

*If farmers or business owners are evicted by eminent domain they are entitled to temporary business losses, relocation expenses, business reestablishment costs and other reasonable expenses

*Governments may not limit the price at which the owner may lease or sell their property. However, all tenants currently living in a rent-controlled home may still do so

*Nothing in this proposed ballot measure prohibits or limits legitimate land use decisions, zoning, work place laws, or environmental protections

The 3 bold points are the ones I will address. So number 1:

1. *Government may not take land for the purpose of selling the natural resources

Some have argued that this will prevent the state from using eminent domain for water storage. Fortunately, that claim doesn’t hold water (no pun intended)

The prohibition on taking property “for the consumption of natural resources,” relates directly to the property being “taken.” Where property is acquired in order to construct a water storage or conveyance facility, the “public use” to which the property is put is for a water storage project or conveyance facility. It’s not for the consumption of natural resources appurtenant to the property acquired

“but the water will eventually be consumed.” Okay, if that was the test, then I guess the public agency could “take” land and perhaps water to construct a reservoir as long as it wasn’t for “consumptive” uses, like recreation or wildlife enhancement

Another example of why the test is not whether non-appurtenant resources are “consumed” is where a public agency already owns land over a geothermal energy source and a geothermal power facility. Granted, this would prohibit taking the property to which a geothermal source is appurtenant. However, with the logic of those who say it would prohibit taking property for water storage, this would prohibit taking property for transmission lines.

This allows eminent domain for public use. Public use is defined in this as, ” use and ownership by a public agency or a regulated public utility for the public use stated at the time of the taking, including public facilities, public transportation, and public utilities…” Water storage facilities ARE public facilities (Tower Acton Holdings v. Los Angeles County Waterworks Dist. No. 37 [2002])

The prohibition on taking property for the consumption of natural resources is for those appurtenant to the land that’s getting acquired, NOT non-appurtenant natural resources which are acquired separately and may be stored at the acquired property

Who does all this come from? Stuart L. Somach

2. *Governments may not limit the price at which the owner may lease or sell their property. However, all tenants currently living in a rent-controlled home may still do so

First let’s start off with why rent controls are bad. They cause a shortage of housing (builders don’t build knowing they won’t be able to reap the fruits of his labor), resulting in the landlords getting a captive audience, and then no incentive to pay for maintenance or do anything that enhances the person’s living. The foreign minister of Vietnam in 1989 said it best, “Americans could not destroy Hanoi, but we have destroyed our city through very low rents. We realized it is stupid and must change policy.”

If housing the poor provides such a public benefit, then the public should pay for it, not just the landlords. Means-tested housing vouchers are a better way to go

Rent controls are in a sense worse than eminent domain, because at least with eminent domain they pay you. Rent controls are transferring a specific economic benefit from the property value from one owner to another (NOT to the public) without just compensation. They OWN the property, it is their right to set the price at which they are willing to let other people use it

That aside, all tenants currently living in a rent-controlled home may continue to do so. The repeal of rent controls take effect ONLY after they have lawfully vacated, and state law prohibits evicting tenants merely to increase rents

3. *Nothing in this proposed ballot measure prohibits or limits legitimate land use decisions, zoning, work place laws, or environmental protections

This does prohibit, “regulation of the ownership, occupancy or use of privately owned real property or associated property rights in order to transfer an economic benefit to one or more private persons at the expense of the property owner.”

Examples of that are rent control and mandatory inclusionary housing. Regulations, where a specific ECONOMIC benefit is TRANSFERRED to one or more PRIVATE persons at the expense of the property owner might be affected

Land use, zoning, and environmental regulations are done for the PUBLIC benefit, and do not contain a transfer of a specific economic benefit

Wishing this was like Prop 90 doesn’t make it so. If this delved into regulatory takings like Prop 90 did, the summary would look a lot more like this:

Bars state/local governments from condemning or damaging private property to promote other private projects, uses. Limits government’s authority to adopt certain land use, housing, consumer, environmental, workplace laws/regulations. Fiscal Impact: Increased annual government costs to pay property owners for losses to their property associated with new laws and rules, and for property acquisitions. These costs are unknown, but potentially significant on a statewide basis.

CPOFPA doesn’t have anything like that. The fiscal impact for this one instead says, “The fiscal effect on most governments probably would not be significant”

ACA 8 amended

As Brian put up in the quickie, ACA 8 has been amended. The amendment protects churches and other houses of worship from eminent domain abuse, it is as follows:

The State or a local government shall not acquire by eminent domain for conveyance to a private person any real property that is used exclusively by the owner for religious worship, if that property is exempt from property taxation pursuant to subdivision…

ACA 8 now goes to the Assembly floor and still remains a piece of shit. I am not going to support something that increases and decreases people’s constitutional rights based on the kind of property they own.

Do you not think property rights are important? Well, maybe a little enlightening will help. Without property rights, all other rights are meaningless. If the government could take your home at any time for any reason, regardless of whether they pay compensation or not, would you be more or less likely to use your first amendment rights to criticize the government? Probably a lot less. We have no free press if no one can own a printing press. We have no freedom of religion if no one can own a house of worship. I could go on and on and on, but you get the idea

The 5th Amendment is clear: “nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation

It says FOR PUBLIC USE! It doesn’t just say you they need to pay just compensation; if the property is taken, it has to be FOR PUBLIC USE! It also doesn’t say “nor shall residential property…” It says PRIVATE PROPERTY. It doesn’t distinguish the kind of property. And don’t tell me that that’s too specific for the constitution. Just look at the 4th Amendment:

“The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated”

And don’t try the “unless they’re on welfare” argument on me. I’ve responded to that before, and click the link if you wanna see it

So, now with the constitutional parts out of the way. Can someone explain to me why taking away the roof over my head is so much different from taking away what pays for the roof over my head?

Brian has repeatedly cited “only 2 in the Bay Area in the last decade.” Only 2, my ass. That statistic is exclusively talking about homes, and to the extent that the government has had to resort to eminent domain. To claim what he is claiming is like counting the amount of robberies by how often the gun gets fired. It’s the fact that the gun is pointed at the person’s head that’s the problem

A “sale under threat of seizure” is not a voluntary sale. It’s just as bad as seizure, but it’s not counted in the statistic.

Second, eminent domain abuse overwhelmingly happens more with small businesses. And again, taking away what pays for the roof over my head isn’t much different from taking away the roof over my head. And again, property is property, our constitution makes no distinction in the 5th Amendment.

Now I hear you saying, “It’s not seizure, people receive just compensation. No one’s property rights are being violated”

First off, just compensation my ass. They send in their own appraiser, whose lowball estimate is final unless you want to spend your savings (if it’s your business they’re condemning, which is most likely) challenging them in court. And the second you touch the money, YOU WAIVE YOUR RIGHT TO CHALLENGE THE AMOUNT!

Second, even if they paid “just compensation,” that misses the big picture. Property rights include the right to say NO. That’s gone in eminent domain. If they OWN the property, it is theirs to sell or not to sell as they please. And if you don’t think so, here’s a check for your home, and pack your things because I’m moving in on Monday. You wanna resist? Okay, I’m gonna send in thugs to force you to sell for this amount

The government should then be there to protect you from the thugs. Now the government IS the thugs.

When De La Torre says, “Eminent domain is a legitimate government function,” yes it is a legitimate government function FOR PUBLIC USE!

ACA 8 ingrains eminent domain abuse into the constitution. It allows eminent domain for private use if it’s “part of a comprehensive plan to eliminate blight.” THAT’S THE EXACT PROBLEM WE HAVE NOW. THE PROBLEM IS THAT BLIGHT IS TOO VAGUELY DEFINED THAT IT CAN APPLY TO ANYTHING! THIS DOES NOTHING TO CHANGE THAT, BUT RATHER IT INGRAINS THAT ABUSE INTO THE CONSTITUTION

“Local governments know better than us as to what is blighted and what’s not. Our deference is to them” That’s like letting the accused decide whether he’s guilty. Need I say more?

*Apartment buildings and rental properties are not protected

*Farmland isn’t protected. (and they actually say “Farmland is already protected from being taken by eminent domain for redevelopment.”) Already protected, my ass. Tell that to the owners of Conaway Ranch (look it up if you don’t know what it is)

*This makes little change to current law, and locks in the abuses in the Constitution

*This increases and decreases people’s constitutional rights based on the kind of property they own

I will repeat the 5th Amendment one more time: “nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation

If you would like for it to say “nor be deprived of life, liberty, or property, without a majority vote of the people or due process of law; nor shall private property be taken without just compensation” then go through the legal channels to amend the constitution. At least they’re doing that with the flag burning amendment. Don’t pretend it says that now

ACA 8 in Assembly Appropriations Committee on Aug. 30

Upon the call of Chairman Leno, the Assembly Appropriations Committee will meet tomorrow, and ACA 8 will be one of the proposals taken up. I have no doubt it will pass the Appropriations Committee, but I expect Vice Chairman Mimi Walters and Doug La Malfa to tear the proponents apart

Regardless, it will still pass out. Whenever someone says that the legislative Democrats in California are too liberal (and in the case of eminent domain, they are), I say “no, they’re just partisans.” It doesn’t matter if a Republican makes an exceptional point on something, it won’t persuade any legislative Democrats

Eminent Domain Initiative On Its Deathbed?

Before election time rolls around? Aww, that’s unfortunate, because Prop 90 was so much fun for folks of all ages!

Anyway, the SacBee found a few teensy-weensy errors (h/t to the CA Majority Report ) in the draft of the initiative.  Well, ok, really big errors. Namely the initiative, sponsored in part by the Farm Bureau, would make it darn tough to start new water storage projects.

In short, the CPOFPA would make it illegal to use eminent domain to acquire land and water to develop public water projects. That’s right: the Farm Bureau — a major proponent of water storage and supply — is bankrolling an initiative that would effectively make it impossible to develop any new water projects in the state (visit the website of the coalition promoting Assemblyman De La Torre’s honest eminent domain reforms for a fact sheet on the issue). It’s hard to imagine they would do this intentionally, so one has to assume it is the mother of all drafting errors.

GOP Senator Dave Cogdill told the Bee: “As I read it, there’s certainly reason for concern for what it means for the future of water projects in California, especially as it pertains to new water storage.” (CA Majority Report )

I tell you what, the “eminent domain” people, who keep trying to slip other provisions into their initiatives, are pretty much the bad news bears of initiative reform. Every possible mistake happens.  But, we all make mistakes, right term limit reformers?