Suburban renewal

When the U.S. Supreme Court ruled a few days ago that city councils and other political bodies can bulldoze people’s homes to let developers erect nicer stuff, some analysts said California property owners still would be protected by a state law that makes the federal ruling moot.

According to conventional wisdom, because homes and businesses in California must be declared “blighted” before a city can seize them and tear them down, the Supreme Court ruling—allowing property to be seized even if not for public use—doesn’t affect California.

I beg to differ.

In California, neighborhoods are in a constant battle with local city halls and redevelopment boards that try to declare areas “blighted” so that perfectly decent housing and perfectly fine businesses within that area can be taken using eminent domain.

Two key laws are supposed to protect property owners, including California’s Health & Safety Code Sections 33030 and 33368, which say that to be declared “blighted,” an area must be “80% urbanized”—a fantastically vague idea—and that the area also must be a physical and economic liability that can’t be “reversed or alleviated” without official intervention.

There’s a gaping flaw in these protections in California. One is the fact that our “blight” requirements leave it to elected politicians to decide if an area cannot be helped by the normal forces of private investment and capitalism. Precious few elected politicians in California have a clue about the effects of private market forces, yet they weigh in like the arrogant buffoons they so often are.

Local politicians use the redevelopment laws in California to grossly abuse their eminent-domain powers. As noted in a report from the Claremont Institute, “cities continue to find up-scale areas blighted” in their voracious push to tear stuff down in order to build newer stuff that generates higher property taxes. The pols love to do this because they get to use the additional property taxes from the fancier things they build to fund their other pet projects.

You’ve lost your home or your business, but no big.

On its face, the recent so-called Kelo ruling does not affect California law. As University of California, Los Angeles, law professor Eugene Volokh, an expert on constitutional law, explained to me via e-mail, Kelo “basically reaffirms what most lawyers understood the law to be in any event.” It merely confirms a common practice arising from court rulings, particularly a case known as Berman v. Parker.

He’s right. Kelo doesn’t change things in California—officially, that is.

Yet, I believe Kelo does something far worse than change the law. By flatly stating that a city’s need to generate higher property taxes is more important than the American value of protecting private property from seizure, the Supremes have given psychological permission to developers and politicians to engage in ever more grotesque backroom deals.

Many states ban eminent domain outright. In those states, regardless of Kelo, you cannot lose your home to “redevelopment.”

Not so for California. Back in 1952, California voters were wooed by redevelopment supporters who claimed that allowing eminent domain would “readily facilitate the redevelopment of blighted areas in cities and counties. … Blighted areas are an economic and social drag upon the community and it is good public business to eliminate them.”

But California, unfortunately, created a toothless “blight” definition that is widely abused. Elected pols know all too well that working-class and middle-class property owners can’t afford to mount long legal fights against wealthy entities like San Francisco, San Diego, Sacramento or Los Angeles city halls that declare a property “blighted.”

Knowing that the average woman or man can’t afford to fight a “blight” declaration, local cities stretch the truth. California residents have stopped a lot of scorched-earth plans to clear their land, but they often do it utterly without the help of the courts.

Three of my favorite examples of this struggle over “blight” unfolded in development-crazed Los Angeles. Where else but in the sprawling city that inspired the movie Chinatown?

In one despicable land-grab attempt in the 1980s, former Los Angeles Mayor Tom Bradley tried to declare a vast section of Watts a “redevelopment zone,” opening it to eminent domain.

Despite the Hollywood stereotyping, Watts was a modest, neat, proud neighborhood—not a ghetto. Its small homes were owned by mostly black families who soldiered on amid gang violence. Those families handed the tin-ear Bradley a hugely embarrassing defeat, arising with such a cacophony against his “redevelopment” plan in 1990 that Bradley backed down.

But Los Angeles City Hall didn’t learn a thing. In 2000, the city council attempted to declare two huge areas of the suburban San Fernando Valley—one a fat swath of the northeast Valley, and the other a sizable stretch of upscale Sherman Oaks—as massive “redevelopment zones” subject to eminent domain.

These two Valley areas contained more than 50,000 homes and businesses, including attractive Spanish three-bedrooms with swimming pools, successful car dealerships, a new mall, posh clothing boutiques and popular cafes. They comprised more than 7,000 acres, an area bigger than the entire city of Santa Monica.

It was a scam that nothing in California law would have stopped. But it was stopped by a scrappy bunch of Valley residents led by homeowner organizations who shouted down the city council.

Today, as widely predicted by redevelopment opponents in 2000, the supposedly “hopeless” areas of Sherman Oaks and the northeast Valley are doing great without redevelopment or eminent domain. The supposed crushing “blight” that city officials said could only be “alleviated” by redevelopment were “alleviated” by market forces when the economy brightened. Duh.

The same scene is repeated throughout California as the courts fail to protect property, forcing citizens to win their battles in the court of public opinion. For example, in Redlands in Southern California, a mostly Latino group of homeowners beat back a plan to pave over much of their neighborhood near the 10 Freeway.

But other areas are now controlled by politicians and rich developers. In leafy, upscale Claremont in the Inland Empire, large areas are trapped inside long-term “redevelopment zones” where the Claremont Institute’s Ken Masugi says “the blight definition is just highly subjective.” In San Diego, 1,500 acres were declared blighted for 12 years—despite renovations under way by some small businesses.

Once an area is declared a redevelopment zone, the scam can go on for years and years. This is thanks to a horrible 2001 California law signed by Gray Davis that lets redevelopment agencies keep their clutches on land for an extra 10 years if the city proves it still has “blight,” and promises to spend the extra property taxes generated by newly erected buildings on public improvements, particularly on affordable housing.

But, as noted recently by the California Senate’s Local Government Committee, only one California city—Sacramento—has bothered to keep its promises to erect affordable housing and follow other requirements once they seize the land for an extra 10 years.

In other words, most cities merely ignore state law, and politicians lie. Once they get long-term control of other people’s land, they wildly cheat.

Berkeley has sought a 10-year extension of its “redevelopment zone” in a very upscale and classy area known as Fourth Street, whose property taxes bring Berkeley scads of extra revenue. The truth is that Fourth Street probably would have gentrified without redevelopment, just like Sherman Oaks, thanks to normal market forces, the boom in real estate and a gentrification wave in university towns.

But Berkeley pols insist the success is thanks to eminent domain. So, now they want control of the land, and condemnation powers, for an extra decade.

What a circular mess. The Supremes have done these greedy city halls a big favor, by saying that no public use need be argued before seizing somebody’s home or small business.

True, it doesn’t technically change California law. But Kelo removes the emotional onus against such outrageous practices, handing a fat psychological edge to rich developers and lying politicians.

Masugi, the director of the Center for Local Government at the Claremont Institute, says, “The ruling gives developers even more incentive to push for questionable rulings of ‘blight.’ We’ve seen cities go to tremendous lengths to declare blight. In one case, in its ‘blight’ report, a city mentioned the problem of wet leaves on tennis courts. We are increasingly seeing an attempt to say that a certain level of ‘untidiness’ is considered blight.”

Can’t have untidiness!

Masugi says, “You have to put yourself in the developers’ and politicians’ frame of mind. This doesn’t just verify existing practices under Berman v. Parker. It gives the bad guys much more to play with.”

Is crime worsening in an area developers lust for? Are businesses and apartments failing to comply with tougher building codes? Now cities and developers will put their heads together to prove that such things equate with “blight.”

Kelo is likely to affect practices in cities from Oregon to the Mexican border. It’s the predictable outcome when millions of dollars are to be made and the highest court in the land provides the ethical underpinnings to make it seem OK.

Development has always been a corrupt game in California, since the era when the railroads were laid. With the Supreme Court ruling, the same money-hungry crowd that has always called the shots has now been handed another tool against the common man.