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Eminent Changes 

A questionable proposition may dramatically inhibit the city's attempts to regulate growth

Wednesday, Aug 23 2006
The traditional interpretation of government goes something like this: We citizens scurry along the busy paths of our lives, pursuing our best interests. Every few years we pause and duck into a polling station to elect people who will watch over all those individual paths, quantify the effects and the results of all our efforts, and make some rules that ensure we're all pursuing our collective best interest. Yet this November, a state ballot initiative may change "traditional" into "passé." Propelled by out-of-state libertarian dollars, Proposition 90 glides into the arena as handsome as a clipper ship, and powerful as a speedboat packed full of explosives.

If passed, the proposition could seriously hamper city-planning efforts in San Francisco, and could prevent new environmental regulations across the state. Inside City Hall, various offices are already on alert regarding the prop's effect on zoning, height restrictions, historic preservation decisions, affordable housing requirements, and open-space provisions. "San Francisco policy-makers are aware of the proposition, and are seriously concerned about its possible effects, particularly concerning land-use regulations," says Jesse Smith, San Francisco's chief assistant city attorney.

Proposition 90 goes by the name of the "Protect Our Homes Initiative" when among friends, and supporters say it will "end eminent domain abuse." It's a response to the unpopular Supreme Court decision last year, Kelo vs. New London, which ruled that city governments could take property by eminent domain for use in a private development if the project would boost the economy and benefit the wider public. This set the stage for property-rights revolts all over the country — 26 state legislatures have since passed measures to restrict the use of eminent domain, while seven states will consider ballot measures this November.

Most of those initiatives, including California's, are supported by the New York libertarian Howard Rich, a real estate mogul who has already poured $1.5 million into the Golden State campaign alone. Much of that money went to paid signature-gatherers who swept through San Francisco and the rest of the state, collecting almost 1 million signatures to get the proposition on the ballot.

So where's the dynamite in the California initiative? In addition to restricting the use of eminent domain to public projects (like roads, schools, and parks), the initiative sneaks in a short clause on the obscure subject of "regulatory takings." It says that if government passes any new law or regulation that "damages" private property by causing the property owner substantial economic loss, the owner is entitled to compensation.

Groups opposed to the proposition fear it would have devastating effects on city-planning efforts like San Francisco's Eastern Neighborhoods Plan, an ambitious effort to give the city more control over the booming residential development in the Mission, SOMA, and Bayview. Among many proposed zoning changes, the plan carves out certain areas that would remain strictly industrial, keeping out the possibility of more profitable residential or office developments.

The Board of Supervisors is expected to approve the final version of the Eastern Neighborhoods Plan by next July. But if Proposition 90 is passed this November, property owners in the designated industrial areas could decide that they'd rather build condos on their plots of land, and could demand compensation for the lost revenue. In this scenario, those opposed to the proposition fear the city will either have to pay millions of dollars to property owners who press their claims, or rescind the regulation.

In Oregon, where a similar ballot measure was passed two years ago, property owners have filed almost 3,000 claims for compensation. One landowner is demanding $203 million from a county, claiming that regulations are preventing him from building a geothermic power plant and pumice mine on a chunk of property he owns within a national volcanic monument.

San Francisco environmental groups like Greenbelt Alliance and the Sierra Club are leading the charge against California's Proposition 90, and stressing its nightmare possibilities in their campaigns. The proposition's language is broad; the extent of its reach isn't clear. But environmental regulations across the state, and city-planning rules in San Francisco, are clearly threatened, says Elizabeth Stampe, Greenbelt Alliance's communications director. "Height restrictions, restrictions on big-box retail, inclusionary housing ordinances to make sure there are affordable homes in our neighborhoods ... those could all trigger claims under Proposition 90, and could require compensation," she says. If the city isn't willing to pay off property owners, she says, city planning will give way to ad hoc development, driven by the interests of private property owners and developers.

While it seems unlikely that San Francisco voters would endorse this laissez-faire, free-market vision, opponents of the proposition say that simply explaining the issue presents a stiff challenge. "What they're trying to do is sucker the voters with this appeal about eminent domain, while the real agenda is to attack the ability of government to protect the environment, protect consumers, protect wage-earners," says Tom Adams, board president of the California League of Conservation Voters. The opposition coalition is embarking on an educational campaign about what they see as the true motives behind the initiative, and is planning a blitz of mailings and TV ads for the fall. To appeal to voters beyond law-happy San Francisco, Adams characterizes the proposition as a "taxpayer trap," stressing that California taxpayers would bear the burden for the "billions of dollars" it would cost cities to pay off property owners and enforce new regulations.

Unsurprisingly, a spokesman for the "Protect Our Homes" campaign says that opponents' fears are overstated. "We expect a big lie campaign this fall — that this initiative will cause cancer and a nuclear holocaust," says Kevin Spillane. He says that the regulatory takings clause is a natural extension of the effort to curb the use of eminent domain. "One of the common tactics that local governments will use when they're trying to get their hands on a piece of property is they will rezone it, they'll change the zoning on it to make it less valuable," he says. "They'll pressure, intimidate, and coerce property owners into selling their property, so they don't even have to use eminent domain."

Spillane also points out that the initiative would only affect future regulations, as all existing regulations would be grandfathered in. The initiative also allows existing regulations to be amended somewhat, provided the changes do not "significantly broaden the scope" of the rule. Opponents say that phrase alone guarantees years of legal wrangling, with no clear guidelines for cities in the meantime.

There's one thing that both sides agree on: Should Proposition 90 pass this November, it will take some time to figure out exactly what it means. Inside City Hall, officials fear that city-planning efforts could be stalled for years by a tangle of lawsuits and claims from property owners. And when Spillane is asked whether Proposition 90 would curtail efforts like the city's Eastern Neighborhoods Plan, he pauses for a long moment. "I'm not certain about that," he says. "I'm going to have to get back to you."

About The Author

Eliza Strickland


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