The ability of California’s cities and municipalities to build affordable housing, revitalize downtrodden neighborhoods, clean up environmental pollution, stimulate jobs and economic expansion are all in jeopardy as the result of several pending voter initiatives and legislative proposals that would curtail the use of eminent domain.
California property owners deserve strong protections that prevent local or state government from misusing their powers of eminent domain. That’s why our organizations wholeheartedly support and are working toward legislative solutions that would afford even stronger protections for homeowners and property owners than already exist.
However, the pending legislative and constitutional measures go far beyond what’s needed to protect property owners and would greatly hinder the ability of communities to revitalize and improve their neighborhoods.
Before discussing what these measures would do, a little background is important.
The U.S. Supreme Court’s decision last June in Kelo vs. City of New London, Conn., created a public furor surrounding property rights nationwide. People were understandably upset by that decision, because they perceived the Court somehow made new law relating to the use of eminent domain. The Court did not. It simply confirmed existing law in place for the last 50 years, which says that government may take private property only if it serves a public purpose and that state and local governments should determine what constitutes public use. In California, economic development cannot be defined as a public purpose without a determination of blight. Thus, the decision had no impact here.
In fact, California’s cities and redevelopment agencies have a good record of using eminent domain only as a last resort for purposes such as shutting down environmental polluters, putting slumlords out of business or returning blighted properties to productive use. California law contains many safeguards for property owners to ensure they are treated and compensated fairly:
– Any property subject to eminent domain by a redevelopment agency must be legally found to be in a “blighted” area meaning the presence of serious physical or economic problems.
– Property owners are paid a minimum of fair market value for their property as determined by an independent appraiser.
– In cases of disputes about fair market value, a jury determines what the value should be.
– Property owners are also paid relocation expenses and compensation for business goodwill.
Notwithstanding these protections, the public’s reaction to the Kelo decision coupled with a few instances where agencies did not judiciously use eminent domain have led to legislative proposals such as SCA 20 and statewide voter initiatives.
Unfortunately, these extreme measures would not only strip redevelopment agencies of their ability to use eminent domain, but they would also make public projects such as highways, schools, flood control and parks significantly more expensive for all government agencies.
For instance, SCA 20 and two of the proposed initiatives change the legal definition of “just compensation,” which will significantly increase the cost of public projects. Currently, just compensation is defined as “fair market value” of the property being acquired. However, these measures seek to expand the legal definition of “just compensation” and would require government agencies to pay significantly more for property acquisition at the taxpayers’ expense.
Indeed, the respected California Legislative Analyst’s Office says the initiatives will result in “unknown, potentially significant, changes in government costs to acquire property for public purposes.”
These measures are also direct assaults on redevelopment efforts in California. Redevelopment agencies often acquire blighted properties and work with non-profit affordable housing developers to take over construction, ownership and management of new housing. They work with the private sector to clean-up environmentally polluted properties, and they work with the private sector on economic revitalization projects that help create jobs and opportunity for local communities. By prohibiting the use of eminent domain if the property acquired does not stay in public ownership, the measures would eliminate many of these types of public-private partnerships.
Our organizations are committed to enacting laws that afford California property owners some of the strongest protections in the nation. We believe such protections can be achieved without destroying community revitalization and public purpose projects that are critical to the residents of California.
We invite proponents of the alternative proposals as well as all state elected officials to join us in these efforts.
*John F. Shirey is executive director of the California Redevelopment Association. Chris McKenzie is executive director of the League of California Cities.
