Proposition 99 - Eminent Domain Restriction

What it does

Proposition 99 would eliminate the use of eminent domain by state and local governments for the acquisition of an “owner-occupied residence” for the purpose of conveying it to another private user such as a business. An “owner-occupied residence” includes single-family homes, whether attached or detached, as well as condos. Eminent domain thus could be used only to acquire homes for broadly defined public uses, such as highways, schools, flood protection or roads.

This measure is intended to eliminate in as narrow a manner as possible the concerns about abuses of eminent domain, thereby removing the easiest argument of the property rights movement.

Prop. 99 could possibly restrict other uses of eminent domain — a governmental power generally defined as the right to force private owners to sell their property if the property will be used in a way that benefits the public at large, as long as the owners are justly compensated – if the ultimate beneficiary would be a private party. One example of this private-party benefit could be if the government built a road to a new private development, and had to use eminent domain to acquire private property to build the road.

Prop. 99 would not restrict the ability of government to use eminent domain to acquire private property for a public use such as a library or a school. It also would not prevent the state from using eminent domain for the purpose of protecting public health and safety, preventing repeated criminal activity, responding to an emergency or remedying environmental contamination.

Pros

Arguments in favor of the measure:

• Proposition 99 is needed to address the political concerns about eminent domain, and does so without the highly damaging impacts of Proposition 98. It is an attempt to prevent future measures that severely hamper government regulation of private property, and will remove from the state’s political agenda the use of eminent-domain reform as a shield for radical property-rights measures.
• The changes mandated by Proposition 99 will not significantly hinder redevelopment in California cities because residential property is almost never the subject of eminent domain for economic-development purposes.
• Prop. 99 is a careful and narrow restriction of the use of eminent domain. It focuses only on homes taken and transferred to private uses, and allows for appropriate exemptions to protect public health and safety, and for other legitimate purposes. These exemptions do not exist in Prop. 98.

Cons

Arguments against the measure:

• Prop. 99 has the potential to limit smart growth development. In particular, it would make it more difficult to develop transit villages or to restructure single-use subdivisions into mixed-use communities. This is because of a clause that restricts the private benefit of the eminent domain action as being “incidental to or necessary for” the eminent domain. This clause would prevent eminent domain to take a home that results in new buildings with private beneficiaries. While a privately owned coffee shop in a train station might be deemed “incidental” and thus allowed, dozens of condos or offices above a train station or in neighboring buildings might not.
• Prop. 99 could dampen the ability to finance new public transit by making it more difficult to create transit villages near stations. One of the best sources of funding for transit all over the world is the recapture of value from redevelopment around new stations. If Prop. 99 passes, that ability to recapture value will be greatly diminished.
• Prop. 99 would make it more difficult to rebuild or redevelop existing single-use subdivisions throughout the state. If the use of eminent domain were required to connect dead-end streets to the surrounding street pattern or to convert a part of the subdivision into a “main street,” that conversion might become impossible under Prop. 99.
• There is, to our knowledge, no pattern of abuse of eminent domain in California. Prop. 99 solves a problem that does not exist. Most of the examples of abuse of eminent domain took place many years ago and restrictions now apply that regulate how eminent domain is used.
• Proposition 99 represents a misuse of the ballot initiative process. It was placed on the ballot as part of a political strategy that is less concerned about the merits of the measure and more interested in defeating Prop. 98. Rather than support 99, opponents of restricting eminent domain should simply oppose the passage of 98.

SPUR’s analysis

Prop. 99 is essentially a political calculus to help defeat Prop. 98 and remove from the state’s political debate the “eminent domain reform” shield used by the property rights movement. The backers of Prop. 99 argue that Prop. 98 is too dangerous and its proponents too well funded to defeat it with rational arguments alone. Instead, they introduced Prop. 99 in a political move to trump Prop. 98 by seeking to bring more votes to Prop. 99, because it appeals to a broader constituency. SPUR understands the political calculation. We also understand the political furor created by property rights advocates who cynically use public concern over eminent domain to pursue their radical anti-regulation agenda.

We depart from the proponents of Proposition 99 in three areas because of a disagreement about the function and need for Prop. 99, as well as our evaluation of its potential negative ramifications, should it pass. First, abuse of eminent domain has been an extreme rarity in California over the past 25 years. Public opinion has enforced considerable care in the use of this controversial tool. Therefore, SPUR is not convinced that either Props. 98 or 99 address a real public policy issue in their changes to eminent domain. Further, even if Prop. 99 were to pass, and even if it were to garner more votes than Prop. 98, this would not spell an end to the property-rights movement’s abuse of the state ballot. It instead merely would validate that movement’s premise that there is a need for eminent-domain reform in the first place (which we do not believe there is).

Second, we have concerns about the misuse of the initiative process to try to trump another measure, as opposed to simply trying to defeat Prop. 98 on its merits. The far-reaching and possibly unforeseen consequences of this kind of measure will be locked into place unless voters themselves reform the measure.

Third, we feel the need to defend the proper use of eminent domain in a wide variety of situations — including taking homes and transferring ownership to a broadly defined private user. We have serious concerns about reducing the discretion of local cities to carry out appropriate development and redevelopment activities. Over the next few decades, many smart-growth projects could be prevented as a result of Prop. 99, such as the building of transit-oriented development to support high-speed rail and the retooling of our auto-oriented, single-use subdivisions. We all are aware of the historic abuses of eminent domain during the 1950s, 60s and 70s. But the fight against urban renewal was decisively won 30 years ago. Most cities already have restricted eminent domain to prevent such continued abuses. The problem with Prop, 99 is that it broadly eliminates one of the few tools we will have in the 21st century to rebuild our failing suburbs and to retrofit our state’s settlement patterns around transit nodes.

SPUR recommends a “No” vote on Prop. 99.