The View From Space

It’s likely that most of you are confused by the two ballot issues regarding eminent domain, Props 98 & 99 that will appear on the ballot today as you go to the polls. Here’s a bit of non-partisan clarification.

 

First, a quick explanation of eminent domain and why these ballot initiatives are being put forward. Eminent domain is a process under which the government can (and does) seize private property for public use – to build a road, a school or a courthouse. Under eminent domain, the government buys your property (whether you wish to sell or not), paying you what they determine to be fair market value. But the government can also seize your land and transfer it to private developers so they can build more expensive homes and offices, big box stores, car dealer ships etc. that will pay more in property taxes than the buildings they’re replacing. For example, in one case a town wished to exercise eminent domain over a residential neighborhood, so that an upscale condominium development could be built on that land. To advance that goal, they defined any home within the neighborhood as “blighted” if it did not have three bedrooms, two bathrooms, an attached two car garage, and central air conditioning. This abuse of the eminent domain process has prompted a backlash in many states leading to legislation and ballot initiatives to restrict under what conditions the government can seize private property.

 

Prop 98 – This proposition is being put forward by the Howard Jarvis Taxpayers Association, the same group that brought us Proposition 13, the landmark 1978 tax revolt initiative that restricted property tax increases in California. The proposition does two major things:

 

First, it restricts the use of eminent domain by restricting the government from seizing any private property unless it is used for a real “public” purpose such as a road, park, school, etc.

 

Second, the proposition phases out rent control, but contrary to the scare tactics used in some of the opposition advertising, rent control continues to remain in effect as long as a tenant remains in an apartment (or mobile home) that is currently under rent control. However, once that unit is vacated, rent control on that unit will end and the landlord may charge rent at market value. Currently if you vacate your apartment, the landlord may increase the rent to market value for the next tenant, but then is restricted to increases controlled by the local municipality under rent control (usually no more than 3 – 4 % per year). Understand that not all municipalities in California have rent control (approximately 12 California cities and 110 mobile home communities) and in LA, rent control only exists for multiple dwellings built before October 1, 1978.  It is estimated that only about 10% of the population in California lives under rent control.

Summary of key provisions in the initiative:

• Private property may not be taken by eminent domain for private use under any circumstances (e.g. to build a shopping center, auto mall or industrial park).

• Property may be taken by eminent domain only for public use (e.g.. freeway construction, parks, or schools).

• Property may not be taken by government and used for the same purposes (e.g. residential housing cannot be used for government housing).

• Family farms and open space are protected from seizures by government for the purpose of selling the natural resources.

• If a public agency takes property under false pretenses, or abandons its plans, the property must be offered for sale to the original owner at the original price and the property tax would be assessed at the value of the property when it was originally condemned.

• If farmers or business owners are evicted by eminent domain, they would be entitled to compensation for temporary business losses, relocation expenses, business reestablishment costs and other reasonable expenses.

• Government may not set the price at which property owners sell or lease their property. However, tenants who live in rent-regulated communities will continue to receive the benefit of those regulations as long as they live in their residences.

Prop 99 – This proposition was put forward in an attempt to thwart the passage of Prop 98. It gives some new protections against government abuse of eminent domain, but is much weaker than Prop 98 and only applies to owner occupied residential property.  Plus it has numerous other loopholes that weaken protection for even these types of properties. For example, a private home could still be taken and given to a developer as long as the development includes some government facility, no matter how small, like a small library annex or community police office. It does not protect any private commercial property (like mom & pop stores), apartments, farmland, churches, etc. It does not require the government to return land that it seizes even if the land is not used for the purpose for which it was seized. It does not phase out rent control. It is mostly endorsed by government entities and developers who have a vested interest in seeing the weakest eminent domain reforms passed.  Be aware that if both 98 and 99 pass, only the proposition with the highest vote count will become law, so if you vote for both, then we will likely get 99 and not 98.

 

The bottom line is that which proposition you vote for (if any) will depend on whether you feel it’s fair to phase out rent control after some one vacates their apartment and whether this is a good trade-off in order to get some very strong eminent domain protection for property owners.

 

Although I will probably vote for Prop 98, I’m not advocating a position because I understand that many people believe that rent control is a good thing. (I personally object to rent control on principle because I don’t believe anyone has the right to dictate how much a private property owner may charge for rent on their personal property and I believe that it causes higher rents for those that aren’t fortunate enough to be living in a rent controlled building.)

 

Here’s a link for further research:

 

http://www.ballotpedia.org/wiki/index.php?title=California_Proposition_98_versus_California_Proposition_99_%282008%29

 

Go vote! Make your voice heard!