January 6, 2014

Will California worsen its already terrible eminent domain laws?

By Will California worsen its already terrible eminent domain laws?

When the infamous Kelo v. New London was decided in 2005, California was already one of the worst states in the nation when it came to eminent domain. In the five years leading up to that decision, California had used or threatened eminent domain against home and business owners some 858 times for the benefit of private developers. When the decision sparked public outrage, the California League of Cities and their allies in state government managed to get Proposition 99 passed—an initiative that actually expanded the government’s power to condemn property for private benefit.

Most eminent domain abuse in California came under the banner of “redevelopment,” the process whereby government officials condemn land and give it over to politically well-connected developers to build shopping centers and pretty condo complexes. Not only do the developers benefit from getting cheap real estate and other perks, but local Redevelopment Agencies got to keep a large portion of the tax revenue that these projects raised. That didn’t sit well with Gov. Jerry Brown, who abolished the Redevelopment Agencies in 2011—not because he’s a fan of private property rights (he’s not) but because he wanted that tax money for the state.

Since then, there have been several efforts to resurrect redevelopment, just under a friendlier name. Sen. Darrell Steinberg, for instance, has sponsored SB 1, which would bring back redevelopment under the name “sustainable communities.” All it would do is create new entities exercising the same powers as the old Redevelopment Agencies. This is possible because while Gov. Brown killed off the Redevelopment Agencies, the California Redevelopment Law remains on the books.

SB 1 is still sitting in the wings, but just before Christmas, the law firm of Rutan & Tucker—the leading California law firm for cities that want to steal your land for redevelopment—filed a new ballot initiative with an even sweeter-sounding title. It would bring back redevelopment as the “Jobs and Education Development Initiative.” But what’s even more remarkable is how it would expand the power of eminent domain even further than California’s already extremely broad Redevelopment Law allows. Indeed, if this initiative were to pass, it would essentially declare the whole state of California “blighted.”

Quick background: to take property for redevelopment, a local redevelopment agency (typically the City Council) has to declare an area “blighted.” They don’t have to declare each structure to be blighted—they can condemn whole neighborhoods, including perfectly adequate property, if lots down the street or around the corner are “blighted.” And what is the definition of “blight”? The Redevelopment Law contains two lists of factors (“physical” and “economic”), and the officials have to declare that one item from each list is present. That’s all. And the factors are already very vague. My personal favorite is “conditions that prevent or substantially hinder the viable use or capacity of buildings or lots.” What does that mean? It means whatever the government says it means.

That’s the current law. It is already so bad that practically any property in the state can be declared blighted if local officials want to do it. What the new initiative would do is expand these two lists even more.

For example, it changes “conditions that prevent or substantially hinder the viable use or capacity of buildings or lots” to “Factors that prevent or substantially hinder the viable use, reuse or capacity of areas.” And it adds “faulty or inadequate infrastructure, or other similar factors” to the list of items that demonstrate “physical” blight. It also adds a new item to the list of “economic” factors that prove blight: “Unemployment rates in the locality or the county that are in excess of the national or statewide average, as determined by the latest information from the United States Bureau of Labor Statistics and the California Employment Development Department.” Again, the government only has to prove one “physical” factor and one “economic” factor to prove blight—and then that lets them use eminent domain.

Under this list, the mere existence of a structure would be a physical factor proving blight—since the existence of a structure “substantially hinders” the “reuse” of that “area.” And potholes or traffic jams would certainly prove “inadequate infrastructure.” As for unemployment, not only is California’s unemployment rate always higher than the national average, but note that this initiative doesn’t impose any time limit. If the area’s jobless rate exceeds the national rate for even a single day, that would be an “economic” factor proving the existence of blight, and authorizing the use of eminent domain.

It is no exaggeration to say that if this initiative passes, it would declare the entire state of California to be “blighted” and allow government to condemn property to do with as it pleases practically at whim.

The initiative also allows the government to fund construction of practically anything. It would allow government to “pay all or part of the value of the land for and the cost of…construction of any building that is publicly owned either within or without a project area,” if the bureaucrats claim that doing so would be “of benefit to the project area or the immediate neighborhood,” or even of another project area. They could do this whenever they think that it would “assist in the elimination of one or more blighting conditions.”

Thus if bureaucrats claimed that building a new shopping center—owned by the city but leased to Costco or Home Depot for a dollar a year—would create a single job, why then they could take away your home or business and build that center with taxpayer funds. This initiative would make the state of California basically the sole entity deciding where to build and where not to build in the state of California.

You might think that at least owner-occupied homes are safe, since Prop. 99 declared that the state could not take those for redevelopment. But actually, Prop. 99 said that owner occupied homes could still be taken if the owner’s lived there less than a year, and even then can be taken for a “public work or improvement”—which is defined as “facilities or infrastructure for the delivery of public services such as education, police…recreation…libraries…[et cetera,] and private uses incidental to, or necessary for, the public work or improvement.” Thus owner-occupied homes are protected only in very limited circumstances. Build a police office or a community center into your shopping mall, and you get around that barrier.

For more on this proposition, consult our friends at the California Alliance to Protect Private Property Rights.

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