November 1, 2006

Stopping the Government's Property Grab

By Stopping the Government's Property Grab

The Cato Institute's Roger Pilon had this article in the L.A. Times on Monday. Excerpt:

Whole neighborhoods have been bulldozed to make way for "upscale" private developments. Not surprisingly, the poor and politically unconnected have suffered most.

Another abuse is closely related and arguably worse. Rather than condemn the whole property and transfer it to others—for which owners would have to be compensated, however poorly—government condemns legitimate uses through regulation, paying the owner nothing for the loss in value he suffers. Thus, the public goods that result are provided on the cheap—at no cost to taxpayers. Government denies owners the use of their property so the rest of us can enjoy lovely views, wildlife habitat and more. The public enjoys the goods, but the owner bears the costs….

When made to pay for the goods it otherwise acquires through regulation, "the public," it seems, has second thoughts.

Unlike Oregon's measure, however, California's Proposition 90 is not retroactive. When vocal opponents scream, therefore, that it amounts to a raid on the taxpayers, they are wrong in both theory and fact. Wrong in theory because it hardly counts as a "raid" to make the public pay for the goods it wants. Indeed, it is to prevent a raid on individual owners that the takings clause was written in the first place. Wrong in fact, because the Oregon experience shows that almost all the claims filed to date are for past restrictions. Once a fair regime is in place, governments think twice before they impose new restrictions on owners, knowing that the taxpayers are going to have to pay for the goods thus acquired.

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