June 21, 2006 - From the June, 2006 issue

Eminent Domain's Use Threatened by State Initiative

In the wake of Kelo v. New London, property-rights advocates have seized the opportunity to campaign against the use of eminent domain. This fervor has reached California, where the "Anderson Initiative" would further narrow the circumstances under which governments in California could take private property. TPR recently spoke with John Shirey, executive director of the California Redevelopment Association, for insight into this upcoming legislative battle.

John Shirey

The petitions for placing the "Anderson Initiative" on the November 2006 or June 2008 state ballot have been filed. How would this proposed constitutional amendment, which would limit the use of eminent domain in California, impact opportunities and plans by redevelopment agencies and other public agencies in the state?

One of the important things to understand about this initiative is that it goes far beyond impacting redevelopment. It goes far beyond just addressing issues that people may have thought were central to the Supreme Court's Kelo v. New London decision. It affects redevelopment directly in that it, in effect, eliminates the use of eminent domain for any property that doesn't end up getting owned and occupied by a governmental entity. But more than that, this affects all property acquisitions by any governmental entity in California.

It says that any action by any governmental agency that might be seen by a property owner as diminishing the value of his or her property constitutes "damage" and is therefore compensable by that governmental entity. That includes things that we do in zoning, land use regulation, and environmental protection.

Does Oregon's Measure 37 offer insight into the threat? Congressman Earl Blumenauer in a recent TPR interview noted that their ballot measure was titled and framed in a manner that clearly influenced the outcome. How is California's "anti-Kelo" initiative framed?

The initiative's proponents are calling it the "Protect our Homes" initiative. Obviously, they are going directly to the emotional issue that comes out of the Kelo decision where people feel that somehow their homes are now in jeopardy. The fact is, the Kelo decision had no impact on California laws regarding the use of eminent domain. It didn't take away any rights and protections; it didn't give any new powers to local or state government.

What won't be in the title and what won't be stated during the campaign are these other aspects of the initiative that will drive up the cost of government and will also make it very difficult to enact new regulations such as those that protect precious environmental assets in California.

The proposed initiative, we understand, defines "just compensation." Elaborate on the significance of this legal term.

Just compensation is a term that appears in both the California and the federal constitutions. In California and in most other states, just compensation has come to mean fair market value. This initiative's redefinition says that we have to compensate the owner for the value of the property with a sum of money that will keep the property owner in the same position monetarily as if that property had never been taken.

First of all, the meaning of that is not spelled out either in the initiative or in existing law. So there is no guideline that lets us know what that definition means. But what it certainly means is more than fair market value. It will include such things as attorney's fees and perhaps a lost income stream from the property.

Another aspect of the measure states that we would have to compensate the owner according to what a new use of that property might be even if that owner never had authority to use it for a higher purpose. Let's say, for example, that property was acquired through eminent domain for a new sports facility. This initiative suggests that the property owner may also be entitled to the new value of the property as a result of putting a sports arena on that property.

When you start factoring in the income streams from that kind of facility it means something totally out of reason for what that property owner might expect in the way of value or future revenue from that property. So it really upsets how we value property in California and how we compensate owners for their property.

This initiative also redefines "damage" to include an array of regulatory takings. Can you elaborate on its legal reach?

The initiative says that any government action that somehow diminishes the value of property will be termed "damage," which would then be compensable to the property owner. Again, this sort of thing can be taken to great lengths. We frequently place controls on the use of land in California so that we have a balance of uses and so that precious assets in our state are protected.

This says that any time a governmental entity might want to limit density on a property, preserve open space, place height limits on property so that views are maintained from other properties, or anything that a property owner might say, "that diminishes the value of my property," is now going to have a claim against it, and a governmental entity is going to have to pay the property owner for these protections that are done for the good of everyone. In other words, it takes away value for many people to enrich a few-at taxpayers' expense.


It also requires, we understand, that blight determinations be made on a parcel-by-parcel basis. How does that differ from California's current eminent domain process?

Right now a property that is in a redevelopment project area might be a non-blighted property but everything around it is blighted. Under the current Supreme Court ruling on this subject made in 1954, that non-blighted property can be acquired through eminent domain along with other properties, this would now say that that can't be done. But really, that is a minor issue compared to the overriding impact of this initiative, which is that no property can be taken through eminent domain unless that property is going to be owned and occupied by a governmental entity. Blight almost becomes a moot issue when you have that kind of restriction.

The purpose of redevelopment is to recycle property and put it back into the hands of a private owner so that it is paying taxes again. Obviously, that private owner paying taxes is not a governmental entity, which is the only type of owner allowed under this initiative.

You've served many years in municipal government. You are not a private entrepreneur; nor are you a capitalist trying to leverage property for personal gain. Why doesn't protection of private property rights, this initiative's purported goal, resonate with you?

It doesn't resonate with me, and I don't think it should resonate with other people, because everything we do in a complex society needs balance. This initiative upsets the balance. We have a good set of laws in California that restrict the use of redevelopment and make sure that the rights of property owners are protected in any kind of government transaction.

This initiative gives property owners, in effect, a monetary windfall when their property needs to be acquired for a public purpose, be it redevelopment or a road widening or a new school. This initiative also says that the rights of others are subordinate to the rights of a property owner. I think in a free society we need to respect the rights of both.

If this initiative makes it to the November ballot, how will the state campaign be framed and run, by both sides? What arguments will play best with the public?

The Anderson Initiative campaign is going to try to prey on people's fears, which are driven by a misunderstanding of the Kelo decision. They're going to pitch the message: "this initiative protects your home."

We are considering an alternative measure for the ballot that will protect single-family, owner-occupied homes from the use of eminent domain, except that our measure will stop there and not take on new requirements under regulatory takings nor impose new and higher costs on governmental agencies that need to acquire property.

So, their message is going to pitch "the protect your home" aspect. We need to respond with, "protect your home, but also protect your environment, and protect everything else that is near and dear to you about California."

What interest groups are supporting this Anderson Initiative, and who will support your alternative eminent domain initiative?

Nearly all the money supporting the Anderson Initiative comes from outside of California. The primary donor is Howie Rich, who is rich, and who is from New York City. The second largest donation comes from an organization called Montanans in Action. Why people in Montana think they should have a say in how we control the use of land in California is beyond me.

Californians will fund our campaign-people that are interested in protecting our state. We expect to have a broad spectrum of interests-business groups, environmental groups, local governments, public utilities and many others-all working together to try to defeat the Anderson Initiative. We take seriously the need to reassure property owners in California that their homes are safe, but the Anderson Initiative is not the way to do that.


© 2024 The Planning Report | David Abel, Publisher, ABL, Inc.