Eminent domain has become a huge issue. Mostly in the last three years, 34 states have taken action to rein in the increasingly abusive power of local governments to seize private property.
Alas, it doesn’t look like California will be the 35th.
Why? Because there are not one but two ballot questions dealing with eminent domain in the June elections. Introducing a second, overlapping ballot question is always an effective tactic by opponents to dilute support for the first.
Voters could probably overcome the confusion caused by that second ballot question, called Proposition 99. Except that’s only the beginning. The first and most effective ballot question, Proposition 98, shot itself in the foot by including a separate issue: phasing out rent control.
I’m sorry, but that’s just dumb. Regardless of whether you think rent control is good or bad, it should not be mixed in with eminent domain.
I hate to make predictions especially in this nutty year in which voters have consistently shredded prognostications but I’d bet the odds of Proposition 98 passing are about the same as Warren Buffett filing Form 1040EZ next tax season.
A reasonable restriction of eminent domain is in our interest. Eminent domain has gotten abused in recent years because local governments have gotten power drunk with it.
The classic and historic use of eminent domain, of course, was to give governments the power to take private property homes, businesses, churches, etc. to use for projects owned by taxpayers, such as roads, public hospitals and parks. The government foreclosed, and property owners were given market rates plus a little extra, in a typical case.
But in recent decades, local governments began to do something else. They took private property and turned it over to developers in the private sector to build something that wasn’t owned by taxpayers. At first, such projects often could be defined broadly as for the public good, such as sports stadiums. But over time, that definition expanded. More and more routine public-sector projects shopping centers, condo buildings started going through the eminent domain route.
What developed was a system in which local governments and their redevelopment agencies got empowered, hand in hand with favored developers. Bureaucrats came up with grand plans on big maps to improve their cities. Developers got the work. Campaign donations followed. The property rights of small businesses and homeowners got squashed.
The U.S. Supreme Court essentially upheld the concept of eminent domain for economic development in its 2005 Kelo vs. City of New London, Conn., decision. Alarmed citizens from sea to shining sea sprang to action. Most passed initiatives that curtailed eminent domain in some way.
In California, Proposition 99 is backed by government groups and probably wouldn’t do much at all. Proposition 98 would restrict eminent domain to its classic use for public projects. Unfortunately, Proposition 98 also would phase out rent control, partly because it is partly bankrolled by apartment owners and partly by folks, such as the Howard Jarvis Taxpayers Association, who agree philosophically that rent control is similar to eminent domain abuse.
California tried eminent domain reform in 2006 with Proposition 90, which got 47.5 percent of the 50 percent-plus it needed for approval. But it was a confusing proposition. Unfortunately, Proposition 98 is, too.
Charles Crumpley is editor of the Business Journal. He can be reached at
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