Eminent Domain on the June 3 Ballot in California

Small businesses often are the victims when government abuses its power of eminent domain. The story of small business owners having their properties seized in order to hand it over to another private entity favored by politicians is all too common.

That, of course, is not what eminent domain is supposed to be about – at least according to the U.S. Constitution, which clearly states that eminent domain is only to be invoked for a “public use.”

A major eminent domain battle is being fought in California. The June 3 state ballot actually will have two eminent domain propositions meant to rein in eminent domain abuses. Unfortunately, one does very little, including not protecting small business.

A May 9 article in the Long Beach Press-Telegram reports:

Residents on June 3 will decide on Propositions 98 and 99, two ballot measures that seek to limit a government's power to take private property for development.

One major difference between the two measures is the limitations of that power. Prop 99 focuses eminent domain restrictions on single-family homes and condominiums while Prop 98 extends those limits to homes, small businesses, farms and places of worship for private developments such as shopping centers.

Both measures exempt land seizures for public uses such as schools and roads.

The article went on to quote local government officials bemoaning that they could not eliminate so-called “blight” under Prop 98. Of course, though, what a politicians or government bureaucrat calls “blight” often is an individual’s home or business.

The reporter added: “Proponents of Prop 98 say the measure protects against eminent domain abuse and covers all private property, especially small businesses. ‘Small business owners are the most common victims of eminent domain,’ said Marko Mlikotin, a Prop 98 spokesman.”

Jon Coupal, president of the Howard Jarvis Taxpayers Association, wrote an excellent op-ed on the ballot questions in the May 14 San Diego Union Tribune. It is worth reading the entire piece, but Coupal sums up Prop 98 this way:

We are all too familiar with the case of the youth boxing gym in National City, which is fighting developers to stay in business, and the property owners who are faced with losing their properties in Vista and Grantville. Then, of course, there are the property owners who have lost the battle, including the cigar lounge frequented by Gov. Arnold Schwarzenegger that was seized for a hotel that was never built.

This is why a coalition of taxpayers, farmers and small-business groups concerned with property rights came together to draft some very real and sensible private property rights protections that apply to all Californians all the time - Proposition 98.

Key provisions of Proposition 98 include:

• Private property can be taken for legitimate "public" projects, but cannot be taken under eminent domain for "private use."

• Property cannot be taken and used for the same purposes (i.e., residential housing property cannot be used for government housing).

• Government cannot determine the price at which property owners sell or lease their property. Current beneficiaries of rent control will not be impacted, while rent control will be phased out as tenants vacate properties. Government will assume the responsibility of providing affordable housing assistance to the truly needy.

• If a public agency abandons a public project, the property must be offered for sale to the original owner at the original price.

• Property owners would be entitled to fair compensation for temporary business losses, relocation expenses, business re-establishment costs and other reasonable expenses when their property is taken for legitimate public projects.

Coupal also explains that Prop 99 would actually do nothing substantive in terms of protecting property rights. He concludes: “If you believe that your property is worthy of constitutional protections all the time, your choice on Election Day is clear. Vote Yes on Proposition 98, No on Proposition 99.”