Props. 98 and 99 Battle over Eminent Domain

By J. Douglas Allen-Taylor
Thursday May 15, 2008 - 09:34:00 AM

In the March presidential primary election, Alameda County voters faced a confused choice in which two similar but different-in-detail ballot propositions—Measure A and Measure B—sought approval for a special Children’s Hospital building fund tax. In part because of that confusion, voters responded by overwhelmingly rejecting both measures. 

In next month’s primary election, Alameda County voters as well as voters from across the state face a similar situation. The only two statewide propositions on the ballot—Proposition 98 and Proposition 99—are both designed to clarify and put limits on state and local government authority to use eminent domain powers to seize private property. Both seek to alter the effect of a controversial 2005 Supreme Court decision which allowed governmental bodies to seize private property for private development. 

As in the Measure A and B battle, both Proposition 98 and 99 deal with the same legal issues but in different ways. If both pass, the proposition which gets the most votes will become law. 


The Background 

Historically, federal, state, and local governments have had the power to seize private property for public purpose, even when the owners don’t want to part with that property. That power is called eminent domain.  

Governments are not allowed simply to take the property, but must pay the owners what is considered a “fair market value.” In the past, the public purpose projects under which eminent domain seizures have taken place have almost always been indisputably “public”—the building of roads or highways or rail right-of-ways, for example, or schools or other government buildings. 

In 2005, however, the U.S. Supreme Court handed down a new definition of “public use” that can be the subject of an eminent domain seizure. The City of New London, Conn., had sought to seize private property—homes—in order to carry through an economic development plan proposal for its Fort Trumbull community that included condominiums, hotels, and a conference center, and a new plant for Pfizer pharmaceutical company.  

Although none of these were the traditional public uses for which eminent domain had been previously authorized, New London officials argued that the Fort Trumbull economic development plan would bring jobs and tax dollars to a depressed area, which they argued fit the “public” criteria in the Constitution’s seizure authorization clauses. In a 5-4 decision called Kelo v. City of New London, the U.S. Supreme Court agreed with that interpretation. 

Across the country, however, many homeowners and other small private property owners feared that by this definition, any local government could develop similar economic development plans and seize homes and small businesses and turn them over to big businesses. 

Propositions 98 and 99 were put forward to prevent that possibility. But one of them, Prop 98, contains a little extra.  


Proposition 99 

The California Legislative Analyst’s office provides the simplest breakdown of the effects of Proposition 99: 

“This constitutional amendment limits state and local government’s use of eminent domain in certain circumstances. Specifically, the measure prohibits government from using eminent domain to take a single-family home (including a condominium) for the purpose of transferring it to another private party (such as a person, business, or association). This prohibition, however, would not apply if government was taking the home to: Protect public health and safety; Prevent serious, repeated criminal activity; Respond to an emergency; Remedy environmental contamination that posed a threat to public health and safety; Use the property for a public work, such as a toll road or airport operated by a private party. In addition, the prohibition would not apply if the property owner did not live in the home or had lived there for less than a year.” 

The proposition is supported by one of the widest coalitions of California organizations in recent years, led by such groups as the League of California Homeowners, League of Women Voters of California, the California Police Chiefs Association, the California Alliance for Retired Americans, and the Consumer Federation of California. 

Opposition to Prop 99, which is signed in the official ballot pamphlet by representatives of the Howard Jarvis Taxpayers Association, the Protect Prop. 13 Committee, and the California Farm Bureau, is designed around its effect on negating Proposition 98 if it gets more votes. 

“Proposition 98 protects ALL private property in California. Proposition 99 protects virtually nothing,” the Prop 99 opponents write. “The politicians and developers don’t want you to vote Yes on 98, so they are trying to trick you into voting for “do-nothing” Proposition 99 instead. … In 99 they took out every protection for farmers, small businesses, second homes, and rented homes.”  

The Prop 99 opponents also contend that there are enough circumstances in Prop 99 in which home seizures are allowed so that the result is “homeowners have virtually no protection under 99.” 

One thing about the Prop 99 opponents’ argument appears true: Prop 99 provides protection only for “owner-occupied residences.” 


Proposition 98 

The California Legislative Analyst’s Office says that Prop 98 does the very thing that the opponents of the Kelo v. City of New London decision want: it “prohibits government from taking ownership of property to transfer it to a private party—such as a person, business, or nonprofit organization.”  

Significantly, unlike Prop 99, the protection is to all property, not just single-family homes. Prop 98 authors also threw in two additional, highly controversial provisions. 

For one, the measure would end rent control as we know it. Again, quoting the Legislative Analyst’s Office: “[Prop 98] generally prohibits government from limiting the price property owners may charge others to purchase, occupy, or use their land or buildings. This provision would affect local rent control measures. Specifically, government could not enact new rent control measures, and any rent control measure enacted after January 1, 2007 would end. Other rent control measures (those enacted before January 1, 2007) would be phased out on a unit-by-unit basis after an apartment unit or mobile home park space is vacated. Once a tenant left an apartment or mobile home space, property owners could charge market rate rents, and that apartment unit or mobile home space would not be subject to rent control again.” 

The Legislative Analyst’s Office also says that another provision inserted in Prop 98—“impose restrictions on the ‘ownership, occupancy, or use of property’ if the restrictions were imposed ‘in order to transfer an economic benefit’ from one property owner to other private persons”—do not specifically, but could be interpreted by the courts—could being the operative word, here—as prohibiting such programs as mandatory inclusionary housing and condominium conversion relocation benefits. Such relocation benefits are often central components of city’s inclusionary zoning and condominium conversion programs. 

Opponents of Prop 98 also contend it would “jeopardize our ability to protect the quality of our drinking water and secure new sources of water to prevent water shortages,” although no proof of that charge is offered in the official ballot pamphlet. 

The “Yes On Prop 98” campaign is being run by an organization called Californians for Property Rights Protection, which its website [http://yesprop98.com/] says is “a coalition of homeowners, family farmers, small business owners, and other property owners (small and large) led by the Howard Jarvis Taxpayers Association, California Farm Bureau Federation, and The California Alliance to Protect Private Property Rights.”