Property Rights Initiatives Win in Landslides

Published January 1, 2007

Besides Democrats and anyone hoping for gridlock in Washington, the big midterm election winners were homeowners in the nine states that passed initiatives protecting property rights and reining in government’s power to take homes and businesses.

Those initiatives were sparked by the U.S. Supreme Court’s controversial 2005 ruling in Kelo v. New London. The ruling gave state governments a green light to use eminent domain to take private property and turn it over to developers for “economic development” purposes.

Public Incensed

Most Americans were incensed that governments could arbitrarily evict people from their homes, businesses, and churches simply because more local tax revenue could be generated if the properties were redeveloped as condos, offices, and hotels.

Traditionally, eminent domain was used only to acquire private land for clearly defined public uses such as roads, parks, and public buildings. Kelo opened the door for government to condemn property for almost anything it could argue had a public benefit, including generation of additional tax revenue.

The backlash was immediate. In the year and a half since Kelo, more than two dozen states have passed legislation to curb eminent domain abuse. On November 7, voters passed a variety of ballot measures intended to do the same thing.

Constitutional Limits Win Big

Overwhelming majorities of voters in Florida, Georgia, Michigan, New Hampshire, and South Carolina approved constitutional amendments forbidding the use of eminent domain to transfer land from one private party to another for economic development purposes.

Louisiana voters approved such an amendment in October.

Similar voter-initiated constitutional amendments passed in both Nevada and North Dakota, though Nevadans will have to pass the same amendment in 2008 for it to take effect.

Voters in Oregon took one of the strongest stands in recent years to protect their property rights. Measure 39, a statutory initiative that reins in eminent domain abuse, passed November 7 with more than two-thirds of the vote.

Oregon Blocks Regulatory ‘Takings’

Measure 39 followed on the heels of voters’ passage of Measure 37 in 2004, which was designed to protect Oregonians from “regulatory takings,” a far more pervasive threat to private property rights than eminent domain abuse.

Local governments routinely pass restrictions on the ability of property owners to use their land in ways that were legal at the time they bought their property. These laws often result in enormous losses to private property values, yet the governments refuse to compensate owners for those impacts.

After several decades of egregious regulatory abuse, Oregonians passed Measure 37 to require state and local governments to pay landowners for these “regulatory takings” or waive the regulations.

‘Kelo-Plus’ Plans Offered

Voters in Arizona followed Oregon’s lead in November and passed Proposition 207–the Private Property Rights Protection Act–breaking new ground in the process. The measure received 65 percent of the popular vote.

Prop. 207 was designed to address both eminent domain abuse and regulatory takings in one comprehensive set of property rights protections. Such proposals have come to be known as “Kelo-Plus” initiatives.

Untested prior to this election, the passage of Prop 207 establishes “Kelo-Plus” as a feasible strategy to target the two biggest threats to property rights in one fell swoop.

However, two similar “Kelo-Plus” measures failed to pass. Despite garnering more than three million votes, California’s Proposition 90 was narrowly defeated, with 48 percent of voters approving the measure and 52 percent rejecting it. Idaho’s Proposition 2 also failed to pass.

Opponents of the measures–including environmental groups, municipal associations, and urban planners–mounted a vigorous campaign to defeat them, outspending the measures’ proponents by a wide margin.

Voters in Washington state defeated Initiative 933, a regulatory takings measure modeled after Oregon’s Measure 37. Opponents garnered 56 percent of the vote.

Special Interests Active

Despite the success in Arizona and Oregon, the defeat of the California, Idaho, and Washington measures indicates regulatory takings reform faces higher hurdles to voter appeal than pure eminent domain measures.

Not only do regulatory takings measures generate more opposition from a variety of special interests that benefit from government’s unfettered ability to regulate, but the issue is inherently complex and largely unfamiliar to voters.

And given that regulatory takings frequently occur in conjunction with zoning regulations preventing development on agricultural land or open space, the issue resonates more with rural voters than city dwellers, as the geographic breakdown of voting for California’s Prop. 90 suggests.

Support for Prop. 90 was strongest in the Central Valley, the Northeast, and Southern California, while opposition centered in the Bay Area and Los Angeles County.

The key for future campaigns will be to craft a message that more effectively connects with urban voters, supporters say.

Leonard C. Gilroy ([email protected]) is a certified urban planner and policy analyst at the Reason Foundation.