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Reason Foundation

San Francisco Examiner

Prop 90 Protects Your Home

California needs to block eminent domain abuse, limit regulatory takings

Leonard Gilroy
October 20, 2006

Opponents of Proposition 90 are calling it a "taxpayer trap," when in fact it would protect taxpayers' basic property rights and hold government fiscally accountable for its actions.

The government shouldn't be able to take your home or land so it can hand it over to another private party. And if the government passes a new law that substantially lowers the value of your property, it should have to compensate you for those losses.

Those are the protections that Proposition 90 would bring to homeowners and small businesses.

All land use and environmental regulations currently on the books would stay on the books, and are exempt from Proposition 90. All of them. The law would also allow government to pass laws directly relating to public health and safety concerns without compensating landowners. Thus, the claims that Proposition 90 would bankrupt local governments are false.

It's only going to cost the government if they try to take your home or destroy the value of it with new regulations. It doesn't seem like too much to ask for politicians to seriously weigh the need for a new law with the costs of taking your land or destroying its value - before they pass new laws. If they choose to move forward, they'll do so with the knowledge that you have to be compensated.

Proposition 90 creates the incentive for fiscal discipline, as it will require governments to carefully evaluate the economic impacts of a proposed regulation and how any related compensation to property owners would rank among the many competing priorities in the budgeting process.

By requiring the economic costs associated with regulation to be valued, Proposition 90 would facilitate more efficient decision making, as policy makers would be better able to compare the costs and benefits of public action. It would also promote transparency, as the full costs of government action would become visible and explicit.

Once those costs become transparent, the government will have a strong incentive to pursue alternative methods of achieving its policy goals that have low impacts on property rights (and thus lower potential for compensation claims).

Opponents also forget that compensating landowners isn't the only choice. They ignore the fact that local governments already have the ability to selectively waive regulations for individual property owners�a zero-cost alternative to compensation. Lawmakers can issue things like conditional use permits that would restore property rights to landowners at no cost to taxpayers.

The bottom line is this: under Proposition 90, any costs incurred by governments as a result of new regulation would be costs incurred by choice. It would no longer be acceptable to require individual property owners�not the public-at-large�to bear the costs of providing the public benefits associated with land use regulation. In this way, Prop 90 would simply ensure that any future costs imposed by regulation would be distributed in a fair and equitable manner.

Proposition 90 isn't a trap, it's a warning to overzealous lawmakers who might want to take your home to build stores, condos or hotels or pass regulations that lower your land's worth.

Warning: if you try to take a Californians' home or destroy its value, you're going to have to pay fair market value.

Leonard Gilroy is a certified planner and policy analyst at the Reason Foundation. He is the author of the study "Analysis of California's Proposition 90" and an archive of his work is here. Reason's research on the California ballot initiatives is here and our eminent domain research and commentary is here.


Leonard Gilroy is Director of Government Reform


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