Tuesday, October 31, 2006

Proposition 90: The Greedy Getting Paid

Back when the Supreme Court issued its decision last year in Kelo v. City of New London, upholding the generations-old practice of the use of eminent domain to assemble private property to turn over to private developers to further the public purpose of economic revitalization, I knew that nationwide folks would shortly lose their ever-loving mind, if the hand-wringing everywhere from DailyKOS to Free Republic was any indication. There are not too many things that cause even the most even-keeled people to start flagwaving more than having to grasp the constitutional caution contained in the Fifth Amendment takings clause ("nor shall private property be taken for public use, without just compensation") that ownership of one's individual private property is sacrosanct only if the government doesn't want it to further an alleged public use. Knee-jerk resistence to, born of a complete lack of understanding of, the idea that there really is no such thing as an absolute right to property ownership in America, and that the Constitution itself authorizes the vehicle through which the takings clause has been effectuated, eminent domain, so long as money is paid to the property owner, is one of the few things that unifies all Americans, no matter what age, color, or education level.

Which is why Proposition 90 - one of the most poorly thought-out California constitutional initiatives to come along in a long time, and that's saying a LOT - is on the ballot this year in California.

What does Proposition 90 do? Well, its supporters say that it is California's answer to Kelo. The claim is that it is intended to restrict the right of California governments at all levels to take private property, to stop "eminent domain abuse." To save widows and orphans. To protect the American dream. That seems simple enough, right? Why wouldn't anyone sign onto that?

The devil, at the court level and especially at the Supreme Court level, has been in the details of what is considered "eminent domain abuse". Proposition 90 makes no intelligent effort to clear the waters on that devilishly muddy legal question. It does just the opposite: it makes the answer to the question even more opaque.

Proposition 90 is a fairly detailed initiative (which by itself justifies voting against it - laws trying to make constitutional amendments should be short and sweet, always), so PLEASE read it. But, for those who simply will not, here is my way-too-oversimplified nutshell description of it. Proposition 90 will mandate, constitutionally, that any government action which has a "substantial impact" on the value of "property" must lead to the payment of "just compensation" based not upon the existing use of that property (which takes into account current laws that might presently restrict how it is used and thus limits its value) but on whatever potential value it might have if such restrictions did not exist, or in the mind of either the government or a third-party private developer who has agreed to work with the government to develop or redevelop the property for economic revitalization purposes (i.e. a "public use.").

Explaining all the details of the above oversimplification would simply take too long to blog about and would definitely and not put people to sleep. So please please please read Proposition 90 yourself.

But just in case you don't, (and if you are a California voter you should!), you should still ask yourself: Is Proposition 90 really so potentially harmful to California when it seems to protect our "right" to own property? Hell yes. There is nothing wrong with limits and restrictions on eminent domain, but they exist already in quite a high level of detail here in California. Thus, even if Proposition 90 stopped at eminent domain, it would be bad because it undermines and makes a matter of constitutional law that which has already been resolved by statute and ordinance. But that would not be fatal, for the economy of California.

Unfortunately, Proposition 90 does not stop there. Explaining the real danger in the proposition would require a boring treatise on the legal concept of a "regulatory taking" which, taken to its worst extremes, can result in a finding of "inverse condemnation." A "taking", in the simplest English, when the government exercises its right to acquire private property for a public purpose. When a taking occurs, the 5th Amendment requires that "just compensation" be paid to the property owner for its loss. A "regulatory taking" is one which occurs when a law, or governmental initiative, has an adverse economic impact on a property's perceived value, even if the government never intends to acquire ownership of the property itself. If a regulatory taking is bad enough (i.e. wipes out a large part of a property's value) it can support a legal action in "inverse condemnation", i.e. one to compel the government to pay compensation for purchase of the property itself.

Supreme Court precedent has set the barriers for regulatory taking pretty high over the years and rightfully so, because all land-use regulation impacts property value, by definition. Under current law, most of the value of property must be lost because of a regulation before a government may be deemed to have actually "taken" the property away.

IME, you can tell how bad a proposed law is when people who would not normally spit on each other if they were on fire have lined up in coalition to try and prevent its passage. Such is the case with Proposition 90 here in California:

  • The Natural Resources Defense Council has gotten in bed with the Howard Jarvis Taxpayers' Association.

  • The League of California Cities is practically making love to the California Association of Realtors.

  • Even Phil Angelides and Steve Westly have temporarily kissed and made up over this.

  • You name it, and other than banks and large-scale developers, the opposiiton to Proposition 90 is virtually universal. The list of opponents goes on, and on, and on. We are, in terms of opposition to this measure, literally at the dogs and cats living together and mass hysteria level predicted as the end of the world in that harbinger of doom, Ghostbusters.

    Opposing Proposition 90 is a no-brainer, once you let your brain actually engage and set aside detached emotion wrapped in a flag and the myth of a poor, suffering Suzanne Kelo (who has now been paid millions out of the public coffers of what all agree was a financially suffering city of New London, Connecticut plus attorneys' fees for her trouble, just because she could). It is about shifting the last bits of state, county, and local wealth in our already-approaching bankrupt state coffers to private individuals who happen to own property. The money gets shifted whether through litigation or settlement, but it is shifted either way. And while it is the taxpayers who pay for it most directly, when the inevitable choice between raising taxes or allowing the last bits of our infrastructure (including schools) to crumble must be made, it is everyone who ultimately pays for that wealth transfer to the few. Everyone.

    I hope that people take the time to actually think about Proposition 90. There are many ways to ensure that eminent domain is not used for nefarious purposes, i.e. the old-style "nigger removal plan" that so many of us came to hate from the '60s and early '70's, and so many of us still fear without regard to the actual legal changes that have been undertaken to prevent it since then. Many of those ways have been law in this state since that time, and have worked to prevent the undisputable evil that former redevelopment methods wrought on communities of color.

    The development of my home city, the City of E. Palo Alto, is a prime example of this. No matter how much we all miss the culture of the old Whiskey Gulch, nobody misses 2000 Cooley (unless they are insane.) The IKEA and Home Depot and University Circle office complex that are in those places - and the beautiful units of permanently affordable housing that were built to begin to offset the loss of the code enforcement scourge owned by an absenteen landlord that gave new meaning to the term blight -- provide jobs, community pride, and the fiscal foundation for this minority-controlled city (even if it's less Black and more Latino than anyone ever expected) to survive and thrive without having to beg for charity, handouts and our wealthy neighboring cities feeling sorry for us. A city born of nationalist pride that can actually pay its bills someday (if outsiders representing absentee property owners would stop suing it for a while, anyhow). Who would have thought it?

    There is such a thing as balanced and community focused redevelopment, even with the use of eminent domain. The experience of E. Palo Alto demonstrates that.

    But if Proposition 90 passes, there will be no more East Palo Alto's. No more inclusionary zoning to ensure affordable housing (since that's definitely going to have a "substantial impact" on the value of business property, as everyone actually doing development acknowledges.) No more mandatory land-set asides to preserve open space, or protect the environment. Some are even claiming that Proposition 90 is so badly drafted as to call into question California's strong prohibitions against businesses disclosing personal information to unaffiliated businesses, since there is nothing in Proposition 90 that limits its provisions to the use of "real property" (i.e. land). Not because individual property owners -- of color, poor or elderly - were actually saved. But instead solely because businesspeople, who buy and sell property, real and personal, for speculative and investment reasons will have poor cities that wish to develop with sensitivity for existing diversity over an economic barrel if they can make any cogent argument that a government action has a "substantial" (meaning more than ephemeral, if you go by the dictionary which the courts would be required to do) impact on the value of their property.

    Which means, of course, that it won't get done. Ask yourself, if you are a California voter: Who wins, in that situation?

    I believe the counties facing bankruptcy in the State of Oregon can provide an answer, in the form of its Measure 37, which was upheld as constitutional earlier this year and passed before Kelo.

    IMO, all you have to do is look at Oregon to know with certainty why you should oppose Proposition 90.


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