Upcoming stealth proposition in California:
Proposition 90: Subverts Eminent Domain
By Don Monkerud
Prepare for another hot button issue. With the issue on 11 state
ballots, eminent domain, called “takings” by opponents, will rank
with gay marriage, school prayer and teaching evolution for this
election season’s fear mongering award.
Californians will get a chance to vote on the issue in November –
Proposition 90 – when they decide whether local governments should
pay homeowners for property value losses created by regulations.
Despite low voter awareness, Proposition 90 is endorsed by the state
Republican Party, a number of GOP legislators and Tom McClintock,
Republican candidate for lieutenant governor, who is leading the
fight to pass it.
The issue arose in June when the Supreme Court voted 5 to 4 to allow
local governments to confiscate property for private economic
development when officials determine it will benefit the public.
Local governments are increasingly using the tactic for an economic
jolt in decaying city centers where large developers propose
shopping malls and other commercial developments, which would
increase tax revenues for local areas.
In a minority opinion, Justice Sandra Day O’Connor claimed the
decision hurt small property owners and gave a “disproportionate
influence” in the political process to large corporations and
developers. The Fifth Amendment requires that “just compensation” be
paid when local and state governments use eminent domain and that
the property must be for “public use.” In the past, eminent domain
has been used to build bridges and highways, and for slum clearance
and redevelopment, but the conservative Court’s decision widened the
concept of “public use” to include “public purpose” to create jobs
or increase economic activity.
The decision created a storm of protests and prompted a backlash of
anti-government libertarians, who seek to frame the debate as a
governmental “abuse of power.” While 30 states passed reforms
restricting eminent domain, the California legislature couldn’t
reach agreement. In response, New York real estate mogul Howie Rich
funded the collection of one million signatures to put Proposition
90 on the ballot and financed 92 percent of the money to support the
A billionaire, Rich is the sole proprietor and funding source behind
a plethora of radical libertarian front groups, which promote state
spending caps, social security privatization, so-called property
rights issues, tax cuts and school vouchers. Although his measures
were tossed off the ballot for fraudulent gathering of signatures in
Montana, Nevada and Michigan, Rich spent over $14 million to support
constitutional changes in Wisconsin, Oregon, Arizona, Ohio, Arizona
Like Rich’s other proposals, Proposition 90 is a doozy. Under the
cover of protecting individuals from being unfairly forced to hand
over their property to private developers, the proposition would
reimburse owners for losses when regulations restrict owners from
developing their land in any way they see fit. Although the proposal
makes exceptions for existing regulations on health and safety
issues, local governments, citizens and homeowner associations would
not be able to control private developments in their communities.
According to Al Meyerhoff, an environmental attorney in LA,
Proposition 90 is “an anti-environmental stealth measure” designed
to strip the public of the ability to pass environmental, land use,
zoning and planning laws. “If enacted,” he writes in the Los Angeles
Times, “any regulation (other than health and safety) said to have
any impact on any property – real, personal or intellectual – could
trigger claims for compensation to be paid by taxpayers.”
Oregon passed a Proposition 90-like “property rights” law in 2004,
allowing claims when zoning restrictions hurt property values.
Oregon courts ruled that 2,200 claims, totaling over $5.6 billion,
would have to be paid by taxpayers. Cash poor local governments
waived the zoning rules rather than pay off private property owners.
Proposition 90 would mean that the plot of private property
overlooking the ocean could be bought for its asking price of
$229,000 and a $10 million house planned for the site. Regardless of
the “parks and recreation” use imposed by the coastal commission, a
house could be built, or the owner would be eligible for $10 million
compensation for what the house would have fetched on the open
market. Similarly, other restrictions on development would be
equally costly. Development of beaches and marine reserves, gravel
pits in downtown areas, and oil wells on beaches would be allowed,
or the state would have to pay property owners for the loss of the
wildest imagined uses of their land.
Part of the backlash against eminent domain is being driven by
cities across the country that force people to sell their property
to developers of expensive homes, offices and shopping complexes.
Ironically, Proposition 90 would be a “bonanza” for national big-box
stores, which would be allowed to muscle their way into unwilling
communities to build gigantic Wal-Mart or Home Depot stores,
shopping complexes and fast food strips.
The confiscation of land by government to assist rich conglomerates
or developers is a bad idea, but passing a law to limit public
regulation of unwanted development or to protect the environment is
an even worse idea. Rejecting Proposition 90 and pressuring the
state legislature to deal with the problem would better serve the