Some controversy has been happening out here in California about a proposed law called “Prop 90″. Some people think it’s pretty evil, and that it’s going to “make it virtually impossible for our state and local governments to do their job of protecting the wildlife” (as a colleague of mine suggests).
I went and did some research on this, and I think Prop 90 is actually a good thing.
First of all, Prop 90 is a response to actions in this and other states where state governmetns took private citizens’ homes and businesses away from them and sold it to other private citizens. This was apparently justified because the redevelopment was deemed to serve some “public use”. Some pretty slummy neighborhoods were seized and then sold to developers. I personally think that’s a violation of the property rights given to us by the U.S. constitution, but our current Supreme Court disagrees.
Prop 90 provides much stronger language on this matter. It explicitly prohibits the transfer of property “in an eminent domain proceeding from one private party to another private party”. I think most people agree this is a good thing.
The controversial part of the law is that it also strengthens the language regarding how the state has to compensate citizens for “damage” to their property caused by legislation. The people fighting Prop 90 are worried that people will claim that legislation has “damaged” them in some pretty bogus ways. Here’s the scenario:
In theory, if Prop 90 is passed, people who own wetlands and want to build on them will apply to do so, the state will deny them a permit, and then they’ll file for compensation under Prop 90. They’ll get some compensation, this will drain the state’s coffers, and make legislators more hesitant to protect wetlands.
Here’s the thing:
1) It doesn’t apply to old laws. So, if land is already zoned as wetlands, owners get nothing.
2) If the government rezones your property as wetlands, they only have to pay “fair market value” which is “the highest price the property would bring on the open market”. They don’t have to pay for the value of what you might build there, just the value of the land, and only its value on the open market.
Honestly, this seems fair to me. If I have some land that I’m allowed to build on, and the government changes the law so that I am no longer allowed, it would be nice to get back what I paid for the property, when I thought I could build there.
I think it’s a fair way to protect people affected by shifting legislation. And I think it is a WONDERFUL affirmation of emminent domain laws, which are not nearly as strong as most of us would like.
It seems possible that this will start a mini market of real estate speculation, wherein investors seek out land that they think is “improperly zoned” with no intention of building on it, just to incite an eminent domain action so that they can claim compensation. However, the compensation they’ll get will be roughly what they paid for it, so there’s not much incentive there for speculation.
In the end, what this amounts to is that instead of weighing an individual’s interests against the public good, the government will have to weigh the cost of compensating an individual against the public good. I don’t see a fundamental problem with that. It sounds MORE fair, not less.
Here’s the proposition itself, which is only two pages long, and some arguments for and against, neither of which are particularly balanced.
One thing that strikes me as very sinister about the proposition is its sense of immediacy. “This proposition shall effect on the day after the election and apply to all unadjudicated cases” or something like that - Somebody obviously has a very large personal vested interest in this law and that makes me worry. In that case it is a law meant to serve a specific individual need and not a general abstract public one. I would be a lot more sympathetic to the law if either it became effective later than now, or only applied to future (non-pending) cases.
Thanks for your summary. I have been struggling with this issue. Your case scenario offers additional clarity, especially in cases of land that is ecologically sensitive.
We have seen, historically, how long time homeowners have been violated as a result of eminant domain. I know of too many old California families who bought their homes with the intent of spending their lives there. Unfortunately, neighborhoods change, demands for resources change and they lose.
I am also concerned with the immediacy factor in this. The behind the scenes activites always concern me. Just as in the LA City ballot initiative of extending the city council term to three terms…I have information about one concilperson who is linked to this, and has used it to entice the mayor to support her/him. The tradeoff could be a very controversial piece of land that hit the press some months ago….
The politics of our world….