Proposition 90 in California: They Sow, We Reap

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Published

September 19, 2006
OnTheCommons.org

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Where does land value come from?  Is it from the efforts of an individual owner, or from those of the society at large to which individual owners glom on?  If the former, then owners might indeed be entitled to compensation when an act of government diminishes their possibility of monetary return.

But if land values come all or in part from the work and investment of the society at large, then so-called “takings” doctrine is itself a form of taking, from all of us.

That question is implicit in the “takings” initiatives being promoted around the country by the so-called “property rights” lobby, including one in California that I will get to in a moment.  But first a few words about a story that appeared in the Wall Street Journal last week (September 13th, 2006) about a proposed new airport on the Florida panhandle.

The proposal would be a particular benefit to the St. Joe Company, which is the largest landholder in Florida (777,000 acres), the vast majority of which is in the panhandle. St. Joe has been exiting the paper and railroad businesses, and has been developing the land instead.   In recent years it has marketed something it calls the “new ruralism,” which the Journal describes as

…outdoor paradises where homeowners can fish, canoe, and kayak in woodsy areas. St Joe’s new ruralism communities include farm houses and forest cabins.  In one farm development near Tallahassee, the common spaces will be landscaped with crops harvested by a farmer on staff.

To further such development plans the company has been pushing a $300 million airport that would be paid for with state, federal and local funds.  St. Joe would donate about 4,000 acres of pine forests and wetlands.  But it owns 96% of the 78,000 acres immediately adjacent to the cite, and this land would become ripe for commercial development.

That’s on top of the increased interest in its residential properties.

The projected boom to the region is debatable, given the widespread qualms, post-Katrina, of buying near the Gulf Coast.  There are lots of environmental concerns as well.  But my interest  here is property values.  If this airport does get built; and if it does boost the value of the land of St Joe and others; then it’s not the owners who will have produced that value.  It’s the taxpayers.

The proposed airport is just an extreme example.  In reality most land values – land here meaning the location of the property in relation to other things – are socially created.  The realtor mantra “Location, Location, Location”  really means proximity to gifts, both natural and social. On what basis then do property owners demand compensation for restrictions on development?  Is not the society simply taking back a portion of what it itself created, to some degree at least?

With that in mind, here’s a recent piece on Proposition 90 which will be on the California ballot in November. It is by Dotty Lemieux, who is a prominent environmental attorney and political consultant in Marin County.

Land Use News
Friday, September 15, 2006

PROPOSITION 90 IS WOLF IN SHEEP’S CLOTHING
Eminent Domain Reform Bill really “Taxpayer Deception” Bill

No one wants their family home or small business uprooted so that some developer or mega corporation can move in. Nor does this happen very often. But to hear the carping of the proponents of Proposition 90, the so called “Protect our Homes” initiative, this is a daily occurrence that must be diligently guarded against.

Not so. To be sure, there are abuses. Last year’s Kelo case in New London Connecticut, in which the Supreme Court upheld the Town’s use of eminent domain, the power of a governmental agency to take private property for public benefit, to take modest single family homes for the purpose of putting in a pharmaceutical factory under the rationale that the local economy would get a much needed boost, being the most famous.

We can find some right here in the Bay area. The once culturally diverse and thriving Fillmore District was transformed into the Western Addition with many a politician’s pocket lined in the process. The popular Marin City Flea Market is now the site of a dreary and underutilized shopping mall. And in Oakland, small auto repair and tire shops are scheduled to be replaced by more upscale retail operations. All to boost economic development under the government’s redevelopment powers.

If our legislature had acted in the wake of Kelo and passed its own laws, modifying the definition of blight and defining what is and what is not a public benefit, we might not see Proposition 90 on the ballot this November. But it didn’t act, and so the vacuum was filled by an eager band of property rights advocates headed by New York developer Howard Rich. Rich and his friends are stumping all over this nation with their “reform” message. And fearful homeowners are falling for it, often to their dismay, when the true costs of “reform” are revealed.

Think we’ve got problems now? If Proposition 90 goes into effect, no neighborhood, family farm or community will be safe from developers keen to squeeze every cent out of every square foot of property they can get their hands on.

Just ask our neighbors to the north. Oregon’s Measure 37, passed in 2004 as eminent domain reform, has resulted in the wholesale gutting of what were once the strictest environmental protections and sound planning practices in the nation.

Besides requiring that no private property be taken for purely economic benefit, Proposition 90 contains the following clause:

“Except when taken to protect public health and safety, ‘damage’ to private property includes government actions that result in substantial economic loss to private property. Examples of substantial economic loss include, but are not limited to, the down zoning of private property, the elimination of any access to private property, and limitations on the use of private air space. ‘Government action’ shall mean any statute, charter provision, ordinance, resolution, law, rule or regulation.”

This clause allows any landowner to sue any governmental agency for any action which they claim devalues their land. This would include such mainstays of good planning as downzoning, restricting the use of airspace and zoning that prohibits mining or other environmentally dangerous activities. This means that laws restricting heights of buildings to preserve sunlight or views or to maintain historic character may be fair game under this law, according to the California Legislative Analyst’s office.

And the law is not limited to real estate but could apply to any “property” including liquor licenses (so there go laws restricting liquor stores near schools), your good name as a consumer (those lists maintained by your utility and credit card companies are property after all) and a myriad of other intangibles not generally considered property under standard land use laws.

In Oregon, which used to have some of the strongest environmental protections and smart growth practices in the nation, Measure 37 has threatened to cost taxpayers millions in lawsuits against regulations that property owners claim devalue their property. The result has been that local agencies, strapped for the cash to defend these regulations, have caved in to developers allowing massive residential and commercial developments, including mining operations, where strict regulations previously protected the environment and the residents of the State.

These measures trot out sympathetic faces to advertise their benefits, the farmer whose land was taken for development, the tire store operator whose shop was replaced with a shopping mall, the grandmother whose lifelong home was seized so that a drug company could relocate there. No one doubts there are abuses of redevelopment and eminent domain laws. But Proposition 90 is not the answer. So far it has been opposed by major environmental groups, the League of Women Voters, League of California Cities and many major newspapers.

But then so was Oregon’s Measure 37. It still passed owing to the false and misleading propaganda those who favor it blast out on the airwaves. Major players besides Mr. Rich and his band of merry developers are the Republican Party and the Libertarian Cato Institute. Big development money is expected to hide its ugly mug behind sad faces of displaced homeowners or actors portraying them.

You know the drill: “I never though this could happen in America. The government came and took my family home, the one my grandfather built with his own two hands. And they’re putting up a giant paper mill that will pollute our river. They say it’s for jobs and economic benefit of our community. I say it’s big government run amok. We need Proposition 90 to protect our homes.”

Ok, I invented that ad myself, but you get the drift. The developers and big business will too, so expect those kinds of ads to play this fall. The irony is, Proposition 90 is actually going to make it easier for the polluting paper companies to build in our State if we don’t stop this wolf in sheep’s clothing in November.

Dotty E. LeMieux

Dotty E. LeMieux is a land use lawyer and political consultant in Marin County. She can be reached at coastlaw@earthlink.net

Land Use News can be found at www.landusenews.blogspot.com

A version of this article appeared in the Marin Independent Journal on 9/14/06

Where does land value come from?  Is it from the efforts of an individual owner, or from those of the society at large to which individual owners glom on?  If the former, then owners might indeed be entitled to compensation when an act of government diminishes their possibility of monetary return.

But if land values come all or in part from the work and investment of the society at large, then so-called “takings” doctrine is itself a form of taking, from all of us.

That question is implicit in the “takings” initiatives being promoted around the country by the so-called “property rights” lobby, including one in California that I will get to in a moment.  But first a few words about a story that appeared in the Wall Street Journal last week (September 13th, 2006) about a proposed new airport on the Florida panhandle.

The proposal would be a particular benefit to the St. Joe Company, which is the largest landholder in Florida (777,000 acres), the vast majority of which is in the panhandle. St. Joe has been exiting the paper and railroad businesses, and has been developing the land instead.   In recent years it has marketed something it calls the “new ruralism,” which the Journal describes as

…outdoor paradises where homeowners can fish, canoe, and kayak in woodsy areas. St Joe’s new ruralism communities include farm houses and forest cabins.  In one farm development near Tallahassee, the common spaces will be landscaped with crops harvested by a farmer on staff.

To further such development plans the company has been pushing a $300 million airport that would be paid for with state, federal and local funds.  St. Joe would donate about 4,000 acres of pine forests and wetlands.  But it owns 96% of the 78,000 acres immediately adjacent to the cite, and this land would become ripe for commercial development.

That’s on top of the increased interest in its residential properties.

The projected boom to the region is debatable, given the widespread qualms, post-Katrina, of buying near the Gulf Coast.  There are lots of environmental concerns as well.  But my interest  here is property values.  If this airport does get built; and if it does boost the value of the land of St Joe and others; then it’s not the owners who will have produced that value.  It’s the taxpayers.

The proposed airport is just an extreme example.  In reality most land values – land here meaning the location of the property in relation to other things – are socially created.  The realtor mantra “Location, Location, Location”  really means proximity to gifts, both natural and social. On what basis then do property owners demand compensation for restrictions on development?  Is not the society simply taking back a portion of what it itself created, to some degree at least?

With that in mind, here’s a recent piece on Proposition 90 which will be on the California ballot in November. It is by Dotty Lemieux, who is a prominent environmental attorney and political consultant in Marin County.

Land Use News
Friday, September 15, 2006

PROPOSITION 90 IS WOLF IN SHEEP’S CLOTHING
Eminent Domain Reform Bill really “Taxpayer Deception” Bill

No one wants their family home or small business uprooted so that some developer or mega corporation can move in. Nor does this happen very often. But to hear the carping of the proponents of Proposition 90, the so called “Protect our Homes” initiative, this is a daily occurrence that must be diligently guarded against.

Not so. To be sure, there are abuses. Last year’s Kelo case in New London Connecticut, in which the Supreme Court upheld the Town’s use of eminent domain, the power of a governmental agency to take private property for public benefit, to take modest single family homes for the purpose of putting in a pharmaceutical factory under the rationale that the local economy would get a much needed boost, being the most famous.

We can find some right here in the Bay area. The once culturally diverse and thriving Fillmore District was transformed into the Western Addition with many a politician’s pocket lined in the process. The popular Marin City Flea Market is now the site of a dreary and underutilized shopping mall. And in Oakland, small auto repair and tire shops are scheduled to be replaced by more upscale retail operations. All to boost economic development under the government’s redevelopment powers.

If our legislature had acted in the wake of Kelo and passed its own laws, modifying the definition of blight and defining what is and what is not a public benefit, we might not see Proposition 90 on the ballot this November. But it didn’t act, and so the vacuum was filled by an eager band of property rights advocates headed by New York developer Howard Rich. Rich and his friends are stumping all over this nation with their “reform” message. And fearful homeowners are falling for it, often to their dismay, when the true costs of “reform” are revealed.

Think we’ve got problems now? If Proposition 90 goes into effect, no neighborhood, family farm or community will be safe from developers keen to squeeze every cent out of every square foot of property they can get their hands on.

Just ask our neighbors to the north. Oregon’s Measure 37, passed in 2004 as eminent domain reform, has resulted in the wholesale gutting of what were once the strictest environmental protections and sound planning practices in the nation.

Besides requiring that no private property be taken for purely economic benefit, Proposition 90 contains the following clause:

“Except when taken to protect public health and safety, ‘damage’ to private property includes government actions that result in substantial economic loss to private property. Examples of substantial economic loss include, but are not limited to, the down zoning of private property, the elimination of any access to private property, and limitations on the use of private air space. ‘Government action’ shall mean any statute, charter provision, ordinance, resolution, law, rule or regulation.”

This clause allows any landowner to sue any governmental agency for any action which they claim devalues their land. This would include such mainstays of good planning as downzoning, restricting the use of airspace and zoning that prohibits mining or other environmentally dangerous activities. This means that laws restricting heights of buildings to preserve sunlight or views or to maintain historic character may be fair game under this law, according to the California Legislative Analyst’s office.

And the law is not limited to real estate but could apply to any “property” including liquor licenses (so there go laws restricting liquor stores near schools), your good name as a consumer (those lists maintained by your utility and credit card companies are property after all) and a myriad of other intangibles not generally considered property under standard land use laws.

In Oregon, which used to have some of the strongest environmental protections and smart growth practices in the nation, Measure 37 has threatened to cost taxpayers millions in lawsuits against regulations that property owners claim devalue their property. The result has been that local agencies, strapped for the cash to defend these regulations, have caved in to developers allowing massive residential and commercial developments, including mining operations, where strict regulations previously protected the environment and the residents of the State.

These measures trot out sympathetic faces to advertise their benefits, the farmer whose land was taken for development, the tire store operator whose shop was replaced with a shopping mall, the grandmother whose lifelong home was seized so that a drug company could relocate there. No one doubts there are abuses of redevelopment and eminent domain laws. But Proposition 90 is not the answer. So far it has been opposed by major environmental groups, the League of Women Voters, League of California Cities and many major newspapers.

But then so was Oregon’s Measure 37. It still passed owing to the false and misleading propaganda those who favor it blast out on the airwaves. Major players besides Mr. Rich and his band of merry developers are the Republican Party and the Libertarian Cato Institute. Big development money is expected to hide its ugly mug behind sad faces of displaced homeowners or actors portraying them.

You know the drill: “I never though this could happen in America. The government came and took my family home, the one my grandfather built with his own two hands. And they’re putting up a giant paper mill that will pollute our river. They say it’s for jobs and economic benefit of our community. I say it’s big government run amok. We need Proposition 90 to protect our homes.”

Ok, I invented that ad myself, but you get the drift. The developers and big business will too, so expect those kinds of ads to play this fall. The irony is, Proposition 90 is actually going to make it easier for the polluting paper companies to build in our State if we don’t stop this wolf in sheep’s clothing in November.

Dotty E. LeMieux

Dotty E. LeMieux is a land use lawyer and political consultant in Marin County. She can be reached at coastlaw@earthlink.net

Land Use News can be found at www.landusenews.blogspot.com

A version of this article appeared in the Marin Independent Journal on 9/14/06

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