Friday, Nov. 3, 2006 | It’s a week until the election yet Proposition 90 has barely been on the public’s radar. You’d think that meant it was a modest issue, like tweaking the laws covering chiropractors or outlawing certain kinds of animal traps, to pick two real past examples.
The ostensible purpose of Proposition 90 is indeed modest: it strives to limit the range of cases in which government can use eminent domain, the power to force people to sell their property. This occurs when a jurisdiction needs specific parcels to build a school, finish a road, or most controversially, redevelopment a run-down area. The initiative would insert into the state constitution a number of provisions designed to ensure that such takings are truly for the use by the public and not for the benefit of well-connected private interests.
But Prop 90 – the “Protect Our Homes Act” – is a deceptive mess. Instead of merely protecting homes, it attempts a clumsy shift in the very role of government towards privileging the interests of those who have investments in land. It is so clumsy, in fact, that it makes it unclear how it would be possible to pass laws in California on the day after the election: the literal wording of the measure requires many new laws to be implemented only after a jury assesses the damage it causes. It’s been a curious road to this point.
Last year, the U.S. Supreme Court made a particularly bad decision: Kelo vs. New London. The court allowed a Connecticut town to seize a widow’s home (in good condition) to give the land to a pharmaceutical company for an industrial campus. You have to look no further than the dissents to understand what is wrong with the decision.
Eminent domain – the power to force people to sell their property – has always been viewed as a little suspect, but the Kelo decision, with the help of media reports that exaggerated its scope, led to a national backlash: it looked like governments could seize your home for no better excuse than city council could think of a use for the property that could generate more tax revenues. With support from across the political spectrum, states have been falling over themselves to limit their eminent domain powers. It is no surprise that in California it would become a ballot measure.
And most of Proposition 90 is your typical initiative, California-style: clumsily worded overkill that takes a noble sentiment and turns it into something expensive and rigid – a mixture of good and bad, with the bad probably some day winning out as the excessive costs became increasingly obvious and frustration mounted over the need to pass another initiative to correct its faults.
But with Proposition 90, someone got greedy. They saw in the intense reaction to Kelo the opportunity to get the electorate to endorse an extreme ideology they barely understood, let alone supported. To wit, in amongst provisions about eminent domain, they tucked in a few sentences that would dramatically change the conditions under which governments in California can pass laws. The main sentence looks like a simple call for fairness: “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.”
As Adam Smith observed long ago, property has two qualities, its economic value and the convenience it provides. Some property is almost purely economic, like bars of gold. Other properties are useful or emotionally significant but have little economic value, like a pair of well-worn but comfortable shoes. Homes are in the middle: they act as investments and provide shelter and emotional comfort to the people who live in them. Proposition 90 evokes “home, sweet home” to protect property, especially developable land, as investments.
The two sides of property often conflict. A new factory might fill the air with pollution, redirect a stream, or clog the roads with traffic – consequences other people have to live with. An outdoor music venue can control when its neighbors are able to sleep. Starting with nuisance ordinances in the 19th Century and slowly becoming more sophisticated, the legislatures and courts have tried, despite tremendous social change, to maintain a reasonable balance between the different ways that people use property.
Proposition 90 tries to up-end the scales in favor of property as money. Unless new regulations can be crafted to fit the confines of Proposition 90, it becomes prohibitively expensive for government to regulate unwelcome effects on nearby properties or the region as a whole. If your quality of life conflicts with a property owner’s bottom line, there will be no balancing of interests. The results will be much more predictable: you will lose.
Homeowners will find that they have exchanged the slight risk of eminent domain seizure for the much more realistic risks of ill-conceived or over-ambitious private development projects. Renters have it worse: they gain nothing from Proposition 90 and any new ordinance to protect them could be argued to cause substantial economic loss to the landlord. If, for instance, a jurisdiction doesn’t already require that tenants be given a reason for their eviction, under Proposition 90, it may never.
This makes a mockery of the stated purpose of Proposition 90: “Private property may not be taken or damaged for private use.” Sure, Proposition 90 prevents government from being the middle-man in the process of one owner taking property from another. But it also severely limits the ability of government to keep one private party from harming others.
Proposition 90 then is an extraordinary privileging of those with enough assets to have investment properties. It gives their needs a veto power over government efforts to protect everyone else.
That this is what the person who wrote the “killer clause” intended can be seen in the way they specifically make sure that restrictions on “private air space” are covered. This is a matter of building height restrictions. How many homeowners actually plan on adding more floors to their homes and worry that new regulations will prevent them? Not many. The real beneficiary of this provision is the landowner who intends to sell to a developer, for the bigger the buildings that are allowed on their property, the more they can sell it for.
The actual extent of harm that Proposition 90 causes will depend on how the courts interpret it. But three effects will appear to varying degrees.
First, Proposition 90 would make it difficult to respond to changing conditions. Yes, there are limitations to the measure: it doesn’t affect parcel-specific nuisance regulations, existing laws or modifications that do not expand their purpose or scope, or government actions justified in terms of public health and safety. But otherwise, new laws are covered, and we do not know what the future holds. Just think of what has happened over the last 50 years: the democratization of the automobile, the doubling of California’s population, an appreciation of the widespread impacts our actions have on the environment. These have all required regulations.
Under Proposition 90, however, local governments and Sacramento would be hard-pressed to deal with new problems: instead of balancing the potential profits of new technologies with the greater good, the greater good could only be maintained insofar as government could make payments to those claiming the regulations decrease the value of their property.
Second, Proposition 90 is very pro-growth, or rather very pro-chaotic growth. Many jurisdictions, when they implemented zoning decades ago to control development, were exuberantly in favor of additional growth, sometimes in ways that now do not look so wise. Perhaps too much growth was anticipated or it was in places that no longer seem appropriate. Proposition 90 means, however, that jurisdictions will be stuck with what they have unless they can afford to pay off everyone holding land speculatively. This is not an abstraction.
Most impacted would be the backcountry. The county has been working for years to update its 1970s general plan, which allows significant additional growth in a thin, inefficient smear across the region’s unincorporated areas. Creating a more sensible plan has not been easy as homeowners, environmentalists and landowners have such divergent interests, but the county has worked for years crafting compromises. With Proposition 90, the community-by-community effort would likely all be for naught, freezing in place the old plan.
The most frustrated communities might very well be the ones like Ramona and Alpine where there is periodically talk of incorporation: depending on how courts interpret the initiative’s grandfather clauses, freshly incorporated cities might find it too expensive to use their newfound powers.
The third impact of Proposition 90 stems from the way the “killer clause” was snuck in. Instead of creating a mechanism for handling claims of substantial economic loss, the clause just reworks the meaning of “damage” and thereby grafts such claims onto the state constitution’s process for purchasing property through eminent domain. This makes the eminent domain process suddenly apply to “any statue, charter provision, ordinance, resolution, law, rule or regulation” that is not exempted for the reasons already mentioned.
And what is the state’s procedure for handling eminent domain? A jury determines the loss and the money has to be paid before the property is taken.
As bizarre a notion as it seems, it’s hard to imagine what this could possibly mean other than to put new laws on trial before they could be implemented. Leaving aside the dubious premise that laws passed by elected representatives ought to be “pre-sued,” this is a logical and logistical nightmare: Is it really possible to accurately anticipate the change in market value of a property a regulation may cause? What if an owner sues for a loss but then sells the land at a profit six months later? Will property owners use Proposition 90 to stall the implementation of any law they don’t like by dragging it through the courts with a claim of substantial economic loss? Could the existing court system handle such cases? How would you pass a law on November 8th? If you wanted to make it go into effect immediately, how could you be certain it was legal to do so?
There are many other questions that could be asked, but the main one is simple: how is this about protecting homes?
Parke Troutman received his doctorate in sociology from the University of California, San Diego in 2004. He currently teaches there.