Commentary

Stopping the Government’s Property Grab

Next month, in 12 states, including California, voters will get a rare chance to talk back to the Supreme Court. Those are the states with measures on their ballots to protect property rights, sparked by the court’s 2005 Kelo decision, which lets government condemn a person’s property and give it to someone else who can make “better use” of it. In an instant, Americans across the country woke up to the realization that, as Justice Sandra Day O’Connor wrote in dissent, “The specter of condemnation hangs over all property.”

To date, 30 states have enacted measures to restrain their power to condemn, and citizens have stepped in where legislatures have balked, placing initiatives on the ballots. Despite intense opposition from the powers who benefit from the status quo, these initiatives are doing well in the polls because they’re tapping into a bedrock American principle: the right of everyone to own and enjoy property.

Occasionally, of course, government needs to take private property for roads, schools, military bases and the like, or to facilitate private undertakings that serve the entire public — network industries such as railroads and electric and cable lines. That’s why condemnations, through the power of eminent domain, are recognized by the 5th Amendment’s “takings clause.” Known in the 18th century as the “despotic power,” eminent domain is nonetheless twice restrained: The property must be taken for “public use” and the owner must receive “just compensation.”

Unfortunately, owners are often not made whole. More recently, however, as in the Kelo case, they’ve had their property taken not simply for a public use but for some “public benefit,” with the court’s blessing, and that’s opened the floodgates to what should be unconstitutional condemnations. Whole neighborhoods have been bulldozed to make way for “upscale” private developments. Not surprisingly, the poor and politically unconnected have suffered most.

Another abuse is closely related and arguably worse. Rather than condemn the whole property and transfer it to others — for which owners would have to be compensated, however poorly — government condemns legitimate uses through regulation, paying the owner nothing for the loss in value he suffers. Thus, the public goods that result are provided on the cheap — at no cost to taxpayers. Government denies owners the use of their property so the rest of us can enjoy lovely views, wildlife habitat and more. The public enjoys the goods, but the owner bears the costs.

The property rights movement has been building for years, but the Kelo decision lighted the fuse. In some respects, the states with measures on the November ballot are taking their cue from Oregon, which for more than 30 years had the most restrictive statewide land-use regulations in the nation. Fed up with the restrictions, in 2004 voters overwhelmingly passed a retroactive measure that requires the relevant agencies to either compensate owners for their losses or waive the restrictions. Not surprisingly, most have chosen the latter course.

When made to pay for the goods it otherwise acquires through regulation, “the public,” it seems, has second thoughts.

Unlike Oregon’s measure, however, California’s Proposition 90 is not retroactive. When vocal opponents scream, therefore, that it amounts to a raid on the taxpayers, they are wrong in both theory and fact. Wrong in theory because it hardly counts as a “raid” to make the public pay for the goods it wants. Indeed, it is to prevent a raid on individual owners that the takings clause was written in the first place. Wrong in fact, because the Oregon experience shows that almost all the claims filed to date are for past restrictions. Once a fair regime is in place, governments think twice before they impose new restrictions on owners, knowing that the taxpayers are going to have to pay for the goods thus acquired.

Proposition 90 opponents’ late devotion to taxpayers is nothing new, of course. The in-bed-with-government establishment is trotting out the same arguments it has always used against propositions aimed at limiting government. If the measure passes, it contends, public services will disappear and life as we know it will end.

In the end, however, simple fairness should decide these matters. It’s wrong for government to impose the costs of public goods on individual owners. And it’s wrong to take the homes and businesses of people just because government thinks someone else can make better use of their property. If someone else wants the property badly enough, there’s a fair way to get it: Pay for it. That’s the American way. If it’s right for individuals, it’s right for government too.

Roger Pilon is vice president for legal affairs at the Cato Institute and director of Cato’s Center for Constitutional Studies.