Pulling Back the Curtain on Prop 98 (why you should vote no)
Gilda Haas on May 25 2008 at 8:51 pm | Filed under: Big Ideas, Opinion
This week’s posts establish the poles of what some might call an urban land reform debate in the U.S. — a battle as old as the country itself — over what set of rights should have primacy: human rights or property rights? We begin with Proposition 98 in California, described below.
Several years ago I was speaking at an economic development conference in Washington D.C. After my bit on the panel, a woman approached me who made it clear that she thought I was on to something good, something that could be useful to her.
Immediately.
She told me about her fight against a really bad eminent domain situation that threatened to destroy her African American neighborhood. She wasn’t talking about the kind of eminent domain that schools and highway agencies can use to build public works projects that everyone can use. She was talking about the kind that redevelopment agencies can use to take property from one private owner — who doesn’t want to sell — and then sell it to another, generally larger private owner, who can develop it into a shopping center, stadium or hotel — all in the name of economic development.
There goes the neighborhood.
She was scheduled to meet with a high powered law firm and wanted me on her team. At least for the moment. That exact moment. Next thing I knew I was seated in the well-appointed office of the law firm. I don’t remember the name of the the woman (persuasive and dynamic though she was) or whether the result of the eminent domain was going to be a shopping center, a stadium, or a high-end hotel.
I don’t remember the name of the liberal co-counsel firm that was present, although I recall exchanging cards and prospects for future conversations. But I do remember the name of the high powered law office — the Institute for Justice — because I was impressed.
I was impressed with their clear bread and butter issues which were presented in large-scale emotionally evocative photographic posters along with phrases like school choice, property rights, and free speech. I was impressed with the rolls and rolls of anti-eminent domain stickers (eminent domain, red circle, red line through it) that were made available, and the implied promise they offered of lots of places to stick them.
I was impressed with the Institute for Justice, the nation’s most effective libertarian think and legal action tank. (In the spirit of full disclosure, I should quickly add that my hosts were completely unimpressed with my uninvited, unabashedly progressive self).
Little did I know that the Institute was about to file the nation’s most influential private property law suit, Kelo vs. New London, an eminent domain case not so different from the situation of the lady from the conference, but one that the Institute for Justice took all the way to the Supreme Court — and lost.
And herein continues my jaw-dropping regard.
Newspaper accounts that followed were not the typical page 34 “Libertarian law suit is Big Loser”-type headlines but rather, front page shocker headlines like Justices Back Forced Sale of Property (L.A. Times) Justices Affirm Property Seizures; (Washington Post); and Justices Rule Cities Can Take Property for Private Development (N.Y. Times).
These journalistic mouthpieces of the eminent domain abuse capitals of the world followed up with opinion pieces with headlines like Eminent Latitude; Supreme Court is Wrong About …; and my personal favorite, The Left is Eyeing Your Home.
The Institute may not have created a private property movement, but they completely fueled it and mainstreamed it.
They are the home of the “Castle Coalition” (get it? A man’s home is his castle) a “nationwide grassroots property rights activism project.” As a result, people who had never heard of redevelopment and its decades-long power to take private property from one owner so than another can develop it, now know that this practice is as wrong as wrong can be.
Kelo decision backlash resulted in 40 states passing some form of legislation to curb eminent domain abuse.
And now it is California’s turn, with Proposition 98 on the June 3rd ballot.
Prop 98 takes the Institute’s long-term vision of liberating private property from government abuse much farther than simply pushing back against eminent domain.
It, like the Institute’s long-term libertarian vision, encompasses a much larger frame of private property rights, moving beyond “government abuse” to reduce any kind of government control over the real estate values.
So, for example, laws that only allow landlords to raise the rent once a year or limit the amount that rent can be raised until someone moves out — typically known as rent control — would be illegal.
California cities are already restricted from creating these laws, but now they could not keep the ones we have.
Or, laws that limit the reasons that tenants can be evicted — typically known as “just cause” eviction and provide 12 sound reasons — those would be illegal too.
If a city wants to solve its affordable housing crisis by requiring large developers to include some affordable housing in their mega-projects — well that would be against the law in California. Or, if a City, like Maywood, wants more control over its polluted water system — you got it — against the law. Why? Because these laws impact the ability for an owner to maximize the profit potential of his or her land. Maximize, not earn profit, but maximize profit.
So, the fact that we want to rezone the land next to the 29th Street elementary school so that the current metal plating factory will no longer spew toxic, cancer-producing effluent on little children and teachers — well that might not be illegal under Prop 98, but it certainly would be litigable.
Perhaps I should have stated this sooner, but that fact that I am super impressed with the Institute does not mean I agree with where they are going. Which is a kind of land reform that places private property rights over people’s rights.
Let there be no mistake. I am a staunch and stalwart opposer of eminent domain abuse. Always have been, always will be.
But the greatest flaw in a long-term vision of liberating the land from the shackles of government intervention is this strategy’s complete disregard for the true blight of inequality that currently plagues our cities.
Take my hometown, Los Angeles, and its dubious distinction as the most unequal city in the country. This means that the gap between the richest and poorest people in the city is wider than any other place. Using this standard, Los Angeles shares the same inequality index as Mexico.
As home prices soar, middle class people begin to wonder if their kids will live with them forever, working class families have to double up, and the numbers of homeless numbers swell. In the face of this reality, it is hard to see the primacy of fighting for private property rights. As less and less people own property, who will really benefit?
Renters are now the majority not only in cities like New York (70% renters), but also in Boston (68%), San Francisco (65%), and Washington, Los Angeles, and Oakland (over 60%). The problem is not just that our neighborhoods are now absentee-owned, but that fewer and fewer people (companies) own more and more of the land.California needs laws that will reduce inequality, not expand it, and the question for private property rights advocates is who will benefit? Does it make sense to expand private property rights when less and less people, in fact the majority, do not own property? In fact, where many are losing what they have to an unregulated banking system already (our sub-prime lending crisis, another topic for another post). Of course not. It makes more sense to increase tenants’ rights and increase everyone’s control over land use in order to create a better quality of life in our cities.
So vote no on Prop 98. Do not let this one slip by. There are shorter posts on the blog about what happened in other places when similar laws constrained local government’