Eminent domain reform: spot the joker! Part 2
[Continued from yesterday’s Part 1.]
As we explored yesterday,
… statutes, charter provisions, ordinances, resolutions, laws, rules or regulations not related to public health and safety that reduce the value of private property.
Initiative Section 1(c), statement of findings
Here’s the joker:
“Hey, are you talking to me? Are you talking … to me?”
Virtually every government action has an impact on the value of urban property.
Some actions (e.g. building a new freeway nearby) add value; some (e.g. downzoning) subtract value. When the action adds value, we smile, and pocket the upside. When it hurts our property’s value indirectly, we shrug (if we even notice it), and absorb the downside.
We tolerate these minor adjustments because, in the aggregate and over the long term, government’s urbanizing efforts dramatically increase the value of urban property. (Think of all that infrastructure, some of it paid with local tax dollars, some with state money, still more with Federal.) And 99% of those efforts have only indirect effect on one’s own property.
Lest you conclude that I am irrationally reading into the language designs not intended, consider this sentence:
Examples of substantial economic loss include, but are not limited to:
· The down zoning of private property
· The elimination of any access to private property, and
· Limitations on the use of private air space.
Downzone a neighborhood? Pay everybody.
“What, you think blog posts are free?”
Decide that the public has a right of access to beachfront (below the high-tide line) and therefore the public has an easement of necessity across private property to get there? Pay the affected owner.
Enact this provision and the government in
Indeed, the model plaintiff initiative proponents are putting forward unwittingly illustrates precisely the point that most government actions have indirect benefits:
On the other side, veteran Sacramento Republican insider Kevin Spillane, who is managing the Protect Our Homes campaign, has asked former
Tony Fung watches John Revelli carry inventory away from Revelli Tire, next to Fung’s Autohouse.
Both businesses are being evicted. Chronicle photo by Kurt Rogers
The city of Oakland took Revelli’s 56-year-old shop and his neighbor Tony Fung’s auto repair shop so that Ohio-based real estate behemoth Forest City Enterprises could build a publicly subsidized housing project that includes roughly 700 units, 20,000 square feet of commercial space and a park. About 25% of the units will be priced below market rates.
Here we have all the fundamentals of sound urban development:
· Land assembly to create a large parcel.
· Mixed use
· Increased density
· Affordable housing. The plan will create 175 affordable homes.
What did they offer?
The Oakland Redevelopment Agency offered him only [’only!’ — Ed.] $331,625 for his roughly 2,000-square-foot building, 2,000-square-foot parking lot and his equipment.
If we assume the building was one-story, the lot was about 1/10th of an acre — $3.3 million per acre. ‘Only’ indeed!
Revelli refused to sell the shop, which his father started in 1949, long before the construction of the nearby 19th Street BART station.
Do you think the BART Station might have increased the property’s value? Just a bit? Under the proponents’ language, nothing like BART could ever be done again, because of the ‘indirect damage’ its construction would have done to abutters and those ‘nearby’.
“I just could not take that amount. It was an insult,” said Revelli, who has still not taken any money from the city in anticipation of a possible legal challenge, particularly if the statewide initiative is successful.
Whether it is an insult, Mr. Revelli, is subjective; what’s objective is whether the price represents fair market value, and there is a judicial remedy already in place for that. Indeed, like
Daniel Vanderpriem,
“We’ve almost always been able to settle these out of court in the last 15 years,” he said.
The list of potential claimed indirect hurts is infinite.
That hurts too!
Fung and Revelli were evicted July 1, and their buildings were demolished on Feb. 3. Revelli began crying as he recalled how by chance he and his wife drove to
“When you spend that many years in a building, that building becomes part of you,” said a tearful Revelli.
I do have a great deal of sympathy for Mr. Revelli, and for his (perhaps more practical) neighbor Mr. Fung:
After mediation, Fung in November accepted about $500,000 for his wholly owned 2,400-square-foot shop [$200 a square foot — Ed.], which he bought in 1992 and where he employed two people.
Noise from nearby construction bothers your residents? Or your dog? Sue the state! What about, in Mr. Revelli’s case, the lost profits from customers who may have gone to another auto shop?
Here’s another example from the Chronicle:
In Pittsburg, by contrast, the city redevelopment agency’s decision to seize a building owned by John and Elaine Caprio has gone largely unnoticed.
The city plans to demolish the 5,600-square-foot brick structure to make way for 195 housing units and nearly 40,000 square feet of commercial space.
Again, note the substantial increase in density, and the addition of housing (part of which, I speculate, will be affordable). Here the city faces a different obstacle:
Local historic preservationists have sued to save the building, built in 1925.
City Manager Marc Grisham insisted that the property — which housed a church and a storage facility — is blighted for various reasons, including deferred maintenance and because it is made of unreinforced masonry.
Pittsburg City Manager Marc Grisham, looking hopefully to the future
Allowing owners to sue for each real or perceived indirect damage to property value would mean open season for endless, truly endless, tort litigation by allegedly damaged property owners.
I’ll just take a peek at the writs
Back to the proposed language itself:
- In all eminent domain actions, just compensation shall be defined as that sum of money necessary to place the property owner in the same position monetarily, without any governmental offsets, as if the property had never been taken. Just compensation shall include, but is not limited to, compounded interest and all reasonable costs and expenses actually incurred. [Emphasis added in all cases.]
‘All reasonable costs’ means ‘whatever the lawyers charged.’ Remember the billions in legal fees that were argued to be ‘reasonable’ in the tobacco settlement?
Pandora would need her own attorney.
The League of California Cities and other critics also say the measure could play havoc with land-use regulation by subjecting a vast array of government actions to costly litigation, which could make officials fearful of bold initiatives.
“It is a wolf in sheep’s clothing,” said Tom Adams, president of the board of the California League of Conservation Voters.
All comrades should immediately report any suspicious sheep!
Virtually every environmental group in the state will fight the measure, he said.
Certainly, for it would immediately stop all conservation-type acquisitions.
Critics say the measure would hamper the ability of
There are some who argue that holdouts have an inherent right to hold out, and I am one of those who believes in paying a premium as moral compensation to the owner for deploying the eminent domain hammer, and a cost surcharge to the locality to keep them from running amok.
“This sets the bar much higher for all governmental acquisitions. We can’t estimate the cost increase. The legislative analyst simply said it would be significant,” said John Shirey, executive director of the California Redevelopment Association.
Significant? If enacted, it would be a catastrophe. To start with, it would put a complete stop to eminent domain, even for public use, while the tort lawyers piled up the papers claiming ‘indirect damage.’
And that’s just a list of the plaintiffs’ lawyers
The real damage lies far beyond eminent domain. I am trying to avoid hyperbole here, but for the life of me I cannot see how the state of
And no doghouse had its value diminished either.
Since every pebble tossed in a pool creates waves that depress some part of the water surface, I do not see how any body could credibly give that statement.
Will it pass?
[John Shirey, executive director of the California Redevelopment Association], worries that the unpopularity of eminent domain, especially since the Kelo ruling, will lead voters to approve the measure without understanding the broader implications. He maintained that eminent domain is an important tool and said he hopes the Legislature can enact a less destructive reform.
Perhaps this is the proponents’ real objective, and one of the effective political uses of referendum (ever since the incredibly popular and incredibly distortive and damaging Proposition 13). Ride a wave of public sentiment to the passage of sweeping (if flawed) legislation as a means of forcing the legislature, in self-defense, to enact the rational legislation that for one reason or another it has previously ducked.
You voters tried to make me do something, but I ducked!
In any case, for the sake of
Do you know where we stand on this issue?
