From the November 2007 Newsletter:

Eminent domain is back!
By David Fix

Since the U.S. Supreme Court’s 2005 Kelo decision, there has been much discussion about government’s right of eminent domain to seize private property. PRIVATE PROPERTY is protected under the Fifth Amendment of the U. S. Constitution, which guarantees us “due process” under the law. These guarantees include the right against self-incrimination, a prohibition against “double jeopardy,” the right not to be held for a crime unless indicted by a grand jury, and finally, “nor shall private property be taken for public use without just compensation.”

This clause has two components: the government has the right to take private property for public use, but it must pay just compensation for that property. Every law is subject to interpretation. Many examples of “public use” are obvious: schools, fire stations, police stations, and roads. We all understand and agree that the government must be able to take property for legitimate public use. We also want the government to be able to make zoning and other regulatory restrictions. We want environmental protections.

However, Kelo included under “public use” the transfer of private property to another private property owner that would benefit the public through higher taxes to the city government. That certainly is a public benefit, but is it a “public use?”

Signatures are being collected for a June 2008 ballot initiative limiting California’s eminent domain powers, “The California Property Owners and Farmland Protection Act” (CPOFPA). For more information on CPOFPA, visitwww.calpropertyrights.com. Come to our Nov. 13 membership meeting to hear speakers for and against it (and see their articles on pages 4 and 5). There will be petitions for you to sign or to gather signatures with, as well as donation envelopes.

However, be careful in signing petitions. There is a competing measure, “Homeowners and Private Property Protection Act,” sponsored by the California Redevelopment Association, League of California Cities and California State Association of Counties. They too are collecting signatures for the June 2008 election. Based on the sponsors, you know that this initiative will not provide true reform. It won’t protect business property, rental property, farms, or places of worship from eminent domain. Only owner-occupied single-family homes will be protected. The 2-4 unit building you live in would not be protected from transfer to another private party under this competing measure! This proposal does not help you, and contains a poison pill that will kill any competing initiative or future eminent domain reform. For a detailed comparison of the two competing bills visit www.yesonpropertyrights.com/facts/faq.

SPOSFI has been saying for years that rent control is an illegal taking by the government. It transfers the rights of private property from one private citizen, the owner, to another private citizen, the tenant. This transfer is made without any “just compensation,” guaranteed under the Fifth Amendment.

The CPOFPA initiative specifically states that rent control is a taking under eminent domain and is prohibited under this statute. However, there is a phase-in period. The elimination of rent control only applies to rental agreements entered into after the passage of this initiative. Existing tenants in rent-controlled units will still benefit under those rent control laws until they vacate the unit as their “principal place of residence.”

As originally drafted, CPOFPA eliminated rent control for all units in three years. Jurisdictions with rent control would have had three years to devise completely new strategies to help those truly in need of assistance. After 28 years of a law that makes the rental-housing situation worse with every new amendment, it is time for a complete overhaul of the system. This initiative as originally drafted would have forced lawmakers to think more creatively. Unfortunately, that’s not the final version of the initiative.

We can be certain that if CPOFPA passes, court challenges will probably delay its implementation for years. Also, there will be unforeseen consequences. Tenants may be less likely to give up their current tenancies, knowing that all future tenancies will not be subject to rent control. Rather than give up a rent-controlled unit forever, a tenant may use it as a pied-à-terre or sublease it illegally. Local jurisdictions will tighten even further the regulations on the smaller pool of rent-controlled units. The good side may be that thousands of units that owners have kept off the market due to excessive regulations may come back on the market now that these units will be permanently exempted from rent control.

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