The developers are revolting

Imagine a noxious cement-mixing facility churning at all hours of the night next to your house. Or homogeneous housing modules smothering the Natomas Basin Conservancy’s once open habitats and vista-filled rice farms. This disorienting landscape could be a reality beginning November 7 if Proposition 90 were to pass, say critics of the measure. Opponents say the resulting costs and environmental damage could rise to a level of cinematic proportions.

“The worst-case scenario is we’re going to end up with something more like Mad Max, where basically there is no central government that is able to control growth,” says Eric Davis, an attorney and vice president of transportation and air quality for the Environmental Council of Sacramento.

Assemblyman Dave Jones of Sacramento considered what his city would look like under Proposition 90, and although the vision may not be Thunderdome, it’s disturbing nonetheless.

“Any sort of regulation that the city of Sacramento, the county of Sacramento, might have gotten to protect current residents could be at risk [under] Prop. 90,” says Jones. In a state with Proposition 90, Jones contends, common-sense land use and environmental laws, like those protecting Sacramento’s shrinking wetland areas, could be threatened or could leave taxpayers on the hook for sizeable payouts to landowners.

Proposition 90 is touted as a safeguard against eminent-domain abuse. It arrives in California hot on the heels of the Supreme Court’s now-infamous Kelo v. New London decision rendered last June. Kelo affirmed that government could take someone’s property through eminent domain for the purposes of handing it over to more tax-lucrative business developments. The decision elicited outrage, from the ACLU to the GOP.

Proposition 90 would expressly prohibit the taking of private property for private use, with exceptions for public health and safety acquisitions.

The Kelo decision was to property-rights advocates what Roe v. Wade was to Christian evangelicals. However, instead of clinic pickets and disturbing fetus photos, Howard Rich, a libertarian front man and New York real-estate investor, responded by pouring millions into ballot measures across the country in a blanket counterattack.

Rich and a myriad of political-advocacy groups connected to him—the Fund For Democracy and the Club for Growth State Action, to name just two—have contributed more than $3 million in support of the measure, representing more than 90 percent of its total funding in the state.

Rich simultaneously has backed other measures in Michigan, Montana, Nevada, Missouri, Oregon, Arizona and Nebraska for this November’s election that seek to either cap government spending or, like Proposition 90, strengthen property rights to an unprecedented degree, or both.

Critics contend that Proposition 90 is a Trojan horse for real-estate tycoons.

“Proposition 90 will expose the taxpayers of California to billions and billions of dollars in claims from area developers and business,” says Tom Adams, board president of the California League of Conservation Voters. “The proposition goes way beyond eminent-domain reform and creates a potential taxpayer liability for regulation and to protect the environment.”

The measure redefines “regulatory takings,” for which a property owner is entitled to some compensation, to include “substantial damage” resulting from any government action. The measure defines government action as “any statute, charter, provision, ordinance, resolution, law, rule or regulation.”

The second element of controversy is a redefinition of just compensation to mean the value of property “at its highest value and best use.” This formula departs from the “fair market value” methodology historically used in eminent-domain cases. This provision could mean substantial increases in payouts to property owners in condemnations suits.

Such broad language, coupled with the proposition’s revised compensation formula, could hit the state with countless expensive and frivolous property claims, critics say. They worry any property owner could bring a claim for property damage if they perceived it resulted from any newly enacted law or ordinance—and that could have a chilling effect on even the most common type of legislation or ordinance.

Supporters say “it’s about damn time.”

“It protects the individual from abusive government,” says California state Assemblyman Ray Haynes, member of the Protect Our Homes Coalition. Haynes told SN&R that Proposition 90 is a way to force government zoning commissions to pay attention to the little guy.

“A bunch of planners sit around in a room and they draw colors on the map and the city council people all sit together and ask, ‘What did you do in respect to my donors?’” Haynes says sarcastically. “So donors all get protected, but the individual landowner, [who] is not involved politically or not a donor, will get stuck because some planner drew a color on a map somewhere that essentially undercuts the value of their property.”

Supporters also contend that the reworked and more robust property-valuation formula proposed in the measure will give landowners a stronger negotiating position in condemnation cases.

“First of all, the constitution says just compensation. It doesn’t say fair market value,” says Fred Schnaubelt, president of Citizens for Private Property Rights and supporter of the measure.

“All value is subjective. Let’s ask your wife if she will sell me her wedding ring for the weight of the gold and the wholesale price of the diamond in it. Most people feel the value of their wedding ring is worth more than the intrinsic and tangible value.”

The leading opposition—No on 90, Californians Against the Taxpayer Trap—which consists of more than 200 leading political groups and officials from California, calls the measure a classic “bait and switch” deception. The bait is a measure tailored to play on popular sentiment following the Supreme Court’s Kelo decision. The switch is language contained in the measure that would usurp government’s land-use authority.

“This measure really says the people who should decide how our communities should grow are the landowners, not the democratically elected governments,” says Davis.

Opponents point to an earlier project of Rich’s in their critique of the measure. They call it the “horror story” of Oregon, which passed a similar ballot measure in 2004. Measure 37 survived a review by Oregon’s Supreme Court and has resulted in more than 2,500 claims of more than $6 billion in damages since the measure passed, according to Michael Morrissey, manager of the Measure 37 Services Division for the Oregon Department of Land Conservation and Development. “We’re paddling as fast as we can,” says Morrissey, whose office receives an average of 35 claims a week.

Opponents of Proposition 90 say that the chaos in Oregon will be a mere preview compared to the potential number of claims in California, a state nearly double Oregon’s size and more than eight times its population.

Schnaubelt, who says he lost property to eminent domain years ago, has a different take on the Oregon experiment: “What they’re saying is we have been getting away with murder. We have been stealing billions of dollars from people and have been taking their property below fair market value.”

Or, as the residents of Bartertown would say in Mad Max: “Bust a deal, face the wheel.”