[Voices] A Failure of Fairness? Property Rights Movement is Reborn at the Ballot Box

[Richard Carson]

Ballot initiatives for laws that consider a downzoning a partial taking if it hurts property values, along with new barriers to land acquisition through eminent domain, will be the unraveling of the environmental and land use planning gains made in the United States in the 20th century. writes Richard Carson.

Every once in a while a state voter initiative catches people's attention, and it takes the center stage nationally. Examples include creating term limits, setting property tax caps, and banning same-sex marriages. The next big trend is all about property rights, and it is well under way in 23 states.

This national movement about citizens' property rights is driven by two events. The first was the passage in Oregon in November 2004 of a property rights initiative called Ballot Measure 37. The second was the June 2005 U.S. Supreme Court decision, Kelo v. City of New London.

The American Planning Association says, "Radical property rights organizations have seized on the passage of Measure 37 to promote similar ballot measures in other states." These voter initiatives are described by opponents as the most draconian property compensation laws in the United States.

On the other side, proponents love measure 37 because it has brought new life to the property rights movement. Property rights initiatives have one thing in common: they exceed previous U.S. Supreme Court rulings in terms of what constitutes a property taking. In addition, they present the prospect of unraveling local and state laws regarding the environment and land use.

EARLIER CASE LAW AND LEGISLATION

The Fifth Amendment to the U.S. Constitution protects a private landowner from the government "taking" of property without fair compensation, and the case law on compensation for government takings has been widely accepted for more than 70 years.

In the late 1800s, the U.S. Supreme Court ruled in several cases (Mugler v. Kansas and Lawton v. Steet) that in order for a landowner to get compensation, the land use regulations must be so restrictive as to completely deprive the landowner of the land's economic value. In other words, the government has had to compensate landowners for taking all the land's value, but it has not needed to compensate landowners for partial takings.

Some states-Louisiana, Texas, Mississippi, and Florida-have passed laws regulating compensation for partial property takings. The first three states essentially created partial takings thresholds at which a government must pay compensation. The thresholds are 20 percent for Louisiana, 25 percent for Texas, and 40 percent for Mississippi.

The Harris Act, passed in Florida in 1995, went farther than the laws in Louisiana, Texas, and Mississippi and was the first real precursor to the Oregon voter initiative. The act affords landowners the right to sue local governments should their property value be "inordinately burdened" or "restricted" by government regulations. It also applies only to government regulation that happened after the act was implemented. Many of the property rights initiatives passed since the Harris Act go further in that they are retroactive.

OREGON LEADS THE WAY-FOR AND AGAINST

It is ironic that the state where the property rights movement has now been reborn is Oregon. In the early 1970s, the state of Oregon legislated state-mandated land use planning, which was touted as cutting-edge public policy and hailed by some as a grand experiment in land use planning.

In 1973, a bipartisan Oregon legislature and a progressive Republican governor named Tom McCall approved the first statewide land use planning program in the nation. The program required the use of comprehensive plans and urban growth boundaries, all in the name of saving farms and forests. For more than a quarter century, Oregon has received much national media attention for its innovative land use planning program.

On November 2, 2004, however, the very citizens who were purportedly served by this vaunted planning program permanently crippled and politically rejected the program with the passage of Ballot Measure 37. After 30 years, and by a decisive 61 percent to 39 percent margin, the voters essentially terminated the grand experiment by passing the severest property compensation law in the United States.

Oregon's Ballot Measure 37 is a historic precedent because local governments in Oregon must now pay for any partial takings. The ballot measure's language is as clear as it is devastating: "If a property owner proves that a land use regulation restricts the use of the owner's property and reduces its value, then the government responsible for the regulation will have a choice: pay the owner of the property an amount equal to the reduction in value or modify, change, or not apply the regulation to the owner's property." This has become known as "waive or pay."

The primary caveat to this is that the regulations in question must have been those in effect when the current property owner bought the property. Whether such a right is transferable to a new property owner is unclear and is now hotly debated.

The Oregonian, a Portland newspaper, reported that on the first day that measure 37 went into effect, citizens came in to file claims for such developments as a coastal subdivision with 400 one-acre lots, a farmland subdivision consisting of 350 two-acre lots, and a plan for a rural subdivision with a gambling casino, as well as numerous small rural subdivisions. The newspaper also reported that planners are "expecting proposals to build large retail centers or destination resorts on farmland that's been in the same families for generations."

Dorothy English is an unlikely symbol of this cultural revolution. The 92-year-old grandmother bought 19 acres in the scenic hills overlooking Portland in 1953. When she went to the city of Portland to get permission to subdivide her land in order to give some to her children and finance her retirement, she had a rude awakening. "There were no restrictions on the land when we bought it," said English. "To come in and put new restrictions on it 20 years later, I think is stealing."

Dorothy English's story resonated with Oregon voters who had stood by and watched a state and city planning regime that literally ignored the will of the voters. In 2000, Oregon voters passed a similar compensation law by a 54 percent to 46 percent margin, but special interests got the Oregon Supreme Court to nullify the vote. The level of regulation reached in the city of Portland was perceived to be so onerous that the Portland homebuilders' association actually advised its members not to build in the city anymore.

THE KELO DECISION

The Kelo v. City of New London decision is a different kind of taking. New London had used its eminent domain powers to condemn private property for a private sector development, not for a public purpose such as a street, a library, or a school. The legal question was whether this action was a violation of the public use section of the Fifth Amendment to the U.S. Constitution. When the U.S. Supreme took up the case, it decided in favor of New London.

This enraged the property rights devotees nationwide, and they began to campaign in the states to ban this practice at the ballot box.

ACTION ACROSS THE COUNTRY

Ballot Measure 37 and the Kelo decision have planted the seeds of discontent nationally. Just as in 1978 when the Proposition 13 property tax limitation movement spread from California to the nation and just as in 1994 when the Contract with America made term limits the rage nationally, property rights is gaining national political attention and reaching the ballot box in at least half the states of the nation.

One example is the state of Washington's Initiative 933, which is called the Property Fairness Initiative. If enough registered voters vote to pass the initiative, the law will be retroactive to either any existing use in the past or to certain regulations back to 1996. Like Oregon's measure, Washington's initiative says "any ordinance, regulation, or rule to private property shall first pay the property owner compensations...." Washington also has state-mandated land use planning, but its program is more decentralized and less litigious than Oregon's.

To the south, in California's Napa Valley, the Fair Payment for Public Benefit Act was considered by the voters in June 2006. It was modeled on both Oregon's and Washington's compensation requirements, and legal and administrative costs for just the unincorporated county were estimated at up to $3 million a year. The law was to be retroactive to February 2005, the date of the initiative filing.

Because the retroactive date was fairly recent, it was believed that the main impact would be that the county would avoid adopting any new land use ordinances and that a static regulatory environment would result. The county, however, could not have avoided implementing new federal or state requirements over time. This measure was on the June 6, 2006, primary ballot, and failed as 64 percent voted "no."

Another initiative petition being fielded by activists is called the Nevada Property Owners' Bill of Rights. This initiative also provides for compensation for loss of property value. One of the automatic-loss triggers in this initiative is down zoning, but its primary goal is to prohibit the use of eminent domain for private sector projects. Down zoning is when a government rezones property from a classification that puts a higher value on the land to a lower one. If commercially zoned land was rezoned to rural category, for example, then the property owners would lose value.

ANTIGOVERNMENT MOTIVES

The political tactics used in all these states are strikingly similar. Proponents seem to believe that if it worked in Oregon, it is exportable to other states as well. The theme of all the current campaigns is that big government is not fair to the small property owner. Proponents seek out the most egregious examples of someone's property rights being trampled, and they publicize the most sympathetic victims they can find. So all of the proponents are out looking for the next Dorothy English.

Another common denominator in all of the ongoing property rights initiatives is they are meant to curb government land use regulation with the threat of compensation. The truth is that local and state governments cannot afford to pay landowners for the regulations that the government imposes on them. It is yet another irony that the property rights movement and local government are both playing the unfunded-mandate card for different reasons.

Local governments tell state governments that if the state creates a mandate, the state should pay for it. The property owners, in turn, are telling local governments to pay for their mandates. Another profound result of these initiatives will be the unraveling of the environmental and land use planning gains made in the United States in the 20th century.

Richard Carson is Director of the Clark County Community Development Department in Vancouver, Washington.

© Richard Carson 2006. Republished with the author's permission from Public Management magazine.

[The One]

The passage of initiative 207 here in Arizona is a serious problem. It has an exemption for health and safety regulations. It is not retroactive, but will create serious problems for creation of new zoning regulations related to the more touchy fealy codes (aesthetics & design) and of course, completely remove down zoning from the "tool box." I think the Planned Development District will be our saviour.....who woulda thought that.....? Either way, it will get a lot more difficult to get a rezoning application approved....at least it should be more difficult now.

[gkmo62u]

Rich

You do a nice job of laying some of the facts out. I agree that Kelo and Oregon have inspired this steel cage match.

However, I contend that much of the blame lies with the American Planning Association and the planning profession. Local planning has evolved from what I think was once a true and earnest effort to balance individual private property rights with the needs and vision of a community--to a time now when the community's interest is deemed as absolute. The balance no longer exists. The profession (the collective), led by APA and AICP organizations, is outwardly hostile to individual property rights. APA filed an active friend of the courts brief on Kelo and found itself on the wrong side of of the issue in the public realm.

I don't know what the tipping point was but APA holds property rights advocates as a bona fide opposition party. That is where we (and I am a member of both APA and AICP) have gone wrong.

I don't pretend to suppport many of these state initiatives but I do understand where they come from.

[hilldweller]

Originally posted by gkmo62u

Rich

You do a nice job of laying some of the facts out. I agree that Kelo and Oregon have inspired this steel cage match.

However, I contend that much of the blame lies with the American Planning Association and the planning profession. Local planning has evolved from what I think was once a true and earnest effort to balance individual private property rights with the needs and vision of a community--to a time now when the community's interest is deemed as absolute. The balance no longer exists. The profession (the collective), led by APA and AICP organizations, is outwardly hostile to individual property rights. APA filed an active friend of the courts brief on Kelo and found itself on the wrong side of of the issue in the public realm.

I don't know what the tipping point was but APA holds property rights advocates as a bona fide opposition party. That is where we (and I am a member of both APA and AICP) have gone wrong.

I don't pretend to suppport many of these state initiatives but I do understand where they come from.

I disagree with your assessment that planning has evolved towards an anti-property rights, communitarian profession. The land use reforms of the 20th century have been much over-hyped, particularly in terms of state growth management legislation. By and large, local goverment planning (or planning that actually matters) is still beholden to property owners. Jurisdictions that have enacted planning measures which have impacted property rights are a small minority. And they generally withstand legal challenges because fortunately the courts aren't stupid enough to buy into the notion that municipal infrastructure is a grab bag for anyone to enjoy, anywhere they want.

The ballot box reaction doesn't by any means reflect a popular opinion response to perceived planning agressions. It is just a bunch of extremists who saw an opportunity in Kelo to advance a libertarian agenda. They had a good propaganda campaign that convinced a majority of voters of a crisis that never existed. "Throw the baby out with the bathwater" is always a successful cause in American politics. This is unfortunate for the future of community planning.

[jaws]

This is actually a very delicate subject on law and economics, which makes me feel like this thread was made for me. Before you can actually make a clear pronouncement over the legitimacy of downzonings, you have to first ask yourself what makes a property right legitimate.

The one concept that everyone agrees on is homesteading, which is to say that if you are the first to make use of a resource, you have a right to this use antecedent to everyone else's. You can deny access to a resource if it conflicts with your right. However, that right does not extend any further than the actual current use. If you own a house, what you own is exactly one house, not a potential skyscraper. To build a skyscraper you have to homestead a new use, and if this skyscraper conflicts with anyone else's antecedent rights, you cannot homestead, and therefore own, a skyscraper.

Of course there is a lot of property value to a potential skyscraper, but that value is strictly speculative. So long as the downzoning does not forbid a homesteaded activity, there is no conflict of property rights. The speculative value depended on the zoning regulations, which is to say that extra value of the property depended on actions of other people. You cannot, in this way, own the "value" of a property since it is not produced by your actions.

On the other side of the problem is the legitimacy of zoning regulations, which is to say has the city or region appropriated a right to zone other people's property? In the 20th century this zoning was forcefully imposed on property owners and has thus no legitimacy, however it is entirely possible for zoning codes to be imposed contractually as I described in this thread.

[gkmo62u]

Hill

You are correct to say that by and large local governments nationwide are still quite responsive to individual property rights.

My point was critical of the planning profession and particularly what comes out of national APA, Mr. Farmer et. al.

[Future Planning Diva]

A major topic of discussion in my environmental planning class this semester has been cost-benefit analysis and the pitfalls of assigning cash value to non-market values. This is relevant to this topic because the notion that benefits outweigh costs of any action becomes distorted when costs (such as environmental degradation, or even the real cost of public development like roads and sewers and schools) are not figured in the current market price.

This is the point when markets (I didn't say free or ideal market--that's for another discussion) fail to express the value of various goods, and the cost of various kinds of damage. In this case, the reason that localities cannot pay for the "cost" of downzoning or other public action that degrades the value of a particular property, is that the very real benefits will not be expressed in actual tax revenues that the locality will collect.

Following up on Jaws' discussion of homesteading rights, I think it is also important to consider the impact on a neighbor's property values of actions taken by a particular landowner. If I owned a rural property, used for farming or meditation retreats or deer hunting, whatever, I could quite easily be prevented from enjoying my property rights if my neighbor subdivided and built McMansions.

I suspect this is the beginning of a long, hard slog for planners and those who support environmentally sustainable land-use practices. Americans are getting so shortsighted.

[jaws]

Originally posted by Future Planning Diva

Following up on Jaws' discussion of homesteading rights, I think it is also important to consider the impact on a neighbor's property values of actions taken by a particular landowner. If I owned a rural property, used for farming or meditation retreats or deer hunting, whatever, I could quite easily be prevented from enjoying my property rights if my neighbor subdivided and built McMansions.

The distinction between property value and property enjoyment is important. The property's value is what I can sell it for on the market. The property's enjoyment is what I do with the property. If I use my property for meditation and someone builds a carnival next to it then my property will be physically invaded by a nuisance. I have the right to demand an end to the nuisance. At no point, however, is a "loss of property value" calculated.

However if a few Mexican families move into a house a block away then nothing stops me from enjoying my own house as I always have. What has changed is that the neighborhood's desirability for third parties has dropped. The potential amount of money I can get for my house on the market has dropped. Until I change what I do with my property, it has no impact on me. It is not a "real" loss. This is what downzoning does.

[Future Planning Diva]

Originally posted by jaws

The distinction between property value and property enjoyment is important. The property's value is what I can sell it for on the market. The property's enjoyment is what I do with the property. If I use my property for meditation and someone builds a carnival next to it then my property will be physically invaded by a nuisance. I have the right to demand an end to the nuisance. At no point, however, is a "loss of property value" calculated.

However if a few Mexican families move into a house a block away then nothing stops me from enjoying my own house as I always have. What has changed is that the neighborhood's desirability for third parties has dropped. The potential amount of money I can get for my house on the market has dropped. Until I change what I do with my property, it has no impact on me. It is not a "real" loss. This is what downzoning does.

But isn't there a close relationship between damage to enjoyment of property and property value? For example, if I try to sell my acreage next to the amusement park, would not the value be damaged by what essentially is an undesireable land-use?

As I am thinking about this, I am beginning to get a sense of the pitfalls of property law. Because, of course, I might be able to get plenty of money for the above property, if the buyer saw an opportunity to use it for something that would not be damaged by the amusement park. But what about zoning ? . . zoning, zoning, zoning. It really can cut both ways, can't it? Zoning can protect the viablity of existing uses, or it can change the allowed uses and development rights to accomadate growth or prevent over-development.

It seems clear to me that zoning powers are very important so that municipalities can shape development to create (theoretically) better outcomes for the public. But this also means that *some* property owners get screwed. How to address this? An open public process? Competent planners and educated politicians? Compensation for those who get screwed?

As I argued above, the problem with systematically compensating property owners is that the value created by the public action, such as zoning, isn't often expressed in cash. This means that the power of government to protect and promote the public good is very limited if cash payments must be made to property owners.

To play devil's advocate to jaws, regarding a definition of property rights that only takes current, rather than potential, uses into account: properties are bought and sold based on assumtions about what could be built. If I purchase a property based on a plan to build up to current zoning limits, and these limits are reduced, I have a real financial loss based on the difference between the expected limits and the new limits.

What should be done for these people? Is it just tough cookies? Putting various existing laws aside, what do you cyburbia planners think should be done to address the losers in the land-regulation game?

I believe the group interest outweighs the individual interest in general, but that there should be limits to what the state can do. I don't know really, what those limits should best be.

[jaws]

Originally posted by Future Planning Diva

But isn't there a close relationship between damage to enjoyment of property and property value? For example, if I try to sell my acreage next to the amusement park, would not the value be damaged by what essentially is an undesireable land-use?
As I argued above, the problem with systematically compensating property owners is that the value created by the public action, such as zoning, isn't often expressed in cash. This means that the power of government to protect and promote the public good is very limited if cash payments must be made to property owners.

You cannot objectively know what the value of the property was beforehand. The value of the property is only known when it is sold.

You can objectively know that an invasion of property has taken place. We know that a carnival disrupts a yoga deer-hunting ground. We don't know for how much.

To play devil's advocate to jaws, regarding a definition of property rights that only takes current, rather than potential, uses into account: properties are bought and sold based on assumtions about what could be built. If I purchase a property based on a plan to build up to current zoning limits, and these limits are reduced, I have a real financial loss based on the difference between the expected limits and the new limits.

Speculation is a necessary aspect of any marketplace. If you compensate people for speculating, you will only get more intense speculation.

[Future Planning Diva]

If I bought a piece of property because I thought the zoning would change in my favor, that would be speculation.

Do you really consider making plans to build under current zoning to be speculation?

Also, if the value of a property is only known when sold, it would be impossible to assess and tax property. How does the Oregon takings law estimate property owners losses? Should it be done differently? Or not at all?

[jaws]

Originally posted by Future Planning Diva

If I bought a piece of property because I thought the zoning would change in my favor, that would be speculation.

Do you really consider making plans to build under current zoning to be speculation?

There is no observable difference between the two.

Also, if the value of a property is only known when sold, it would be impossible to assess and tax property. How does the Oregon takings law estimate property owners losses? Should it be done differently? Or not at all?

It is impossible to assess and tax property equally. Every estimate of a property's value is purely arbitrary.

[Future Planning Diva]

I hope people will continue to comment on this topic.

So much of what planners do is based on zoning, regulation, and other state powers, including eminent domain. In day to day practice, planners have to find ways to make the current system work. Planners in general want sane growth, a protected environment, healthy communities, and, I venture to add, fairness.

There will always be a tension between the "common good" and individual interests. As planners, what happens when we step back from the details to look at the big picture? How can we use our current tools to create better places and processes? What are the flaws in our current tools? What might a better toolbox be? How might one answer the problems framed by the property rights movement from a planning perspective?

[hilldweller]

In the future I think land use regulations will have to be justified based on taxation/fiscal impact issues rather than broader planning objectives pertaining to environmental protection, sustainability, livability, etc. Politically the latter planning ideas tend to be losers because the "greater good" (which can sometimes be dubious) gets lost in the discussion.

I not sure what an adequate response would be to the property rights challenge. Planning will always exist because it will always be demanded by a democratic society. Zoning is the best tool we have as planners to meet the public demands, which typically is for stability. If the public doesn't care than maybe we shouldn't have zoning. Let the people sort it out; it is their government, not planners'.

[NotaNIMBY]

As a victim of "Eminent Domain" I can't possibly express how happy I am that the misuse of the 5th Amendment is finally being exposed as the land grab for the rich and powerful that it has become!!!

The Kelo vs New London Supreme Court decision was just the icing on the cake of outrageous misuse of the Constitution. Anybody who has bothered to read the decision in Kelo vs New London should share the outrage of millions of law abiding Americans who know a travesty when they see it. The fact that the City of New London stole that property (to boost its tax revenues) and then gave it to a private developer to resell to Pfizer execs who were moving into the area to be next to the NEW Pfizer business offices is just an egregious miscarriage of justice. Remember that Sandra Day O'Connor resigned shortly after submitting her DISSENTING opinion on this case....what does that tell you????

The fact that ANY governmental agency can seize your property AND then give it to a developer to do with what they please can not possibly strike anybody as fair or just.

My family has been fending off the Department of the Interior for almost 30 years now and I can tell you that they are free to lie, cheat and steal with wild abandon, and you can't even get your legal expenses back when you beat them in court.... over and over.

The reason there are so many grass roots organizations fighting for property rights is that even the average Joe can see that government and the courts have failed to protect its citizens from greedy governmental agencies and/or developers.

Michigan is one of the worst exploiters of Eminent Domain and I'm thrilled that the voters overwhelmingly supported restrictions on "takings" in the last election.

I suggest you spend a few decades fighting off the Department of the Interior to stay on the property that has been in your family for 5 generations, before you cast any more stones at property rights activists.

[travis.cleveland]

Originally posted by Future Planning Diva

If I bought a piece of property because I thought the zoning would change in my favor, that would be speculation.

Do you really consider making plans to build under current zoning to be speculation?

Also, if the value of a property is only known when sold, it would be impossible to assess and tax property. How does the Oregon takings law estimate property owners losses? Should it be done differently? Or not at all?

Isn't pretty much ANY expectation that things will be a certain way in the future a form of speculation?

[OregonPlanner]

In case anyone curious, here are the #'s that I've seen printed so far for claims filed in Oregon Counties as result of M37:

County Total Claims
BAKER 139
BENTON 137
CLACKAMAS 1054
CLATSOP 108
COLUMBIA 181
COOS 240
CROOK 90
CURRY 114
DESCHUTES 170
DOUGLAS 250
GILLIAM 1
GRANT 12
HARNEY 2
HOOD RIVER 232
JACKSON 571
JEFFERSON 141
JOSEPHINE 322
KLAMATH 174
LAKE 2
LANE 395
LINCOLN 185
LINN 502
MALHEUR 20
MARION 473
MORROW 2
MULTNOMAH 103
POLK 330
SHERMAN 1
TILLAMOOK 90
UMATILLA 53
UNION 54
WALLOWA 51
WASCO 50
WHEELER 1
WASHINGTON 873
YAMHILL 452

These numbers do not include claims filed in cities. Additionally the State Dept. of Land Conservation & Development has received 3,182 claims.

Cheers

[vagaplanner]

NotaNIMBY, let me give you a scenario and I would like your thoughts on it because I'm curious about your views, considering your first hand experience with the DOI. Anyone else should feel free to respond also.

Land within an economically depressed neighborhood is being considered for redevelopment. This redevelopment will provide jobs, economic development and affordable housing for the residents of the neighborhood and the surrounding area. Let's assume there are 100 properties within the redevelopment area and of those 100, all but five have agreed to sell their properties to the developer for 40% above market value. The five holdouts have demanded 120% of the market value of their property.

Do you think these five holdouts should get their asking price or should the local government use eminent domain to acquire their properties and compensate them the same as the other 95 property owners.

If your answer is "they should be paid their asking price", my question is why should my tax dollars be used to pay exorbitant price tags on property that is needed for the "greater good" of the community.

*Note - for purposes of this scenario, I don't want to dispute what "market value" is or how it is calculated. If 95% of the property owners involved in the buyout agreed to the deal, we should assume that everyone is relatively happy and was treated fairly.

My point here is that I think we should be very careful what we wish for when it comes to property rights and the restrictions on the use of eminent domain.

[Ahavah B.]

"If your answer is "they should be paid their asking price", my question is why should my tax dollars be used to pay exorbitant price tags on property that is needed for the "greater good" of the community."

Well, this might come as a great shock to you, but those five families might actually need 120% of the property's value in order to move and buy a new home. Not everyone has perfect credit and access to good mortgages. Perhaps you've heard of the "genteel poor" in the south and other areas? Their home is their only real asset, they have no cash or savings. Suppose they bought the house decades ago - suppose their original mortgage payments are only a few hundred dollars a month. How are they supposed to be able to afford a payment at today's prices without a huge down payment? How are they supposed to be able to move, pay deposits, and start again with no savings or cash on hand? Has any of this crossed your mind? Or do you think everyone is middle class just because they live in a certain neighborhood? Planners should know better. You're forcing these people to sell their homes against their will. They should get whatever they need to buy and start again from it - measure for measure. Otherwise, you are taking homeowners and making them renters against their will - and that's stealing from them, plain and simple.

[jaws]

Originally posted by vagaplanner

NotaNIMBY, let me give you a scenario and I would like your thoughts on it because I'm curious about your views, considering your first hand experience with the DOI. Anyone else should feel free to respond also.

Land within an economically depressed neighborhood is being considered for redevelopment. This redevelopment will provide jobs, economic development and affordable housing for the residents of the neighborhood and the surrounding area. Let's assume there are 100 properties within the redevelopment area and of those 100, all but five have agreed to sell their properties to the developer for 40% above market value. The five holdouts have demanded 120% of the market value of their property.

Do you think these five holdouts should get their asking price or should the local government use eminent domain to acquire their properties and compensate them the same as the other 95 property owners.

If your answer is "they should be paid their asking price", my question is why should my tax dollars be used to pay exorbitant price tags on property that is needed for the "greater good" of the community.

Because it's their right. As in it cannot be violated without losing your own rights, such as the right to dispose of your life as you see fit.

What's the difference between what you said and "why should our tax dollars be used to pay vagaplanner an exorbitant salary when he can simply be forced to work for us?"

My point here is that I think we should be very careful what we wish for when it comes to property rights and the restrictions on the use of eminent domain.

Quite right.

[vagaplanner]

Originally posted by Ahavah B.

"If your answer is "they should be paid their asking price", my question is why should my tax dollars be used to pay exorbitant price tags on property that is needed for the "greater good" of the community."

Well, this might come as a great shock to you, but those five families might actually need 120% of the property's value in order to move and buy a new home. Not everyone has perfect credit and access to good mortgages. Perhaps you've heard of the "genteel poor" in the south and other areas? Their home is their only real asset, they have no cash or savings. Suppose they bought the house decades ago - suppose their original mortgage payments are only a few hundred dollars a month. How are they supposed to be able to afford a payment at today's prices without a huge down payment? How are they supposed to be able to move, pay deposits, and start again with no savings or cash on hand? Has any of this crossed your mind? Or do you think everyone is middle class just because they live in a certain neighborhood? Planners should know better. You're forcing these people to sell their homes against their will. They should get whatever they need to buy and start again from it - measure for measure. Otherwise, you are taking homeowners and making them renters against their will - and that's stealing from them, plain and simple.

If they bought the house "decades ago", that means they should have the mortgage paid down and the residual between the market value + 40% and the amount left on their loans should provide a substantial amount of money for a down payment towards their next home. That is unless they have refinanced several times to pay off credit cards or done 125% mortgages on their homes, which is studpid, but seems to be the American way. Don't expect me to pay for your poor financial decisions and bad credit. I don't have perfect credit either, but that doesn't mean my property is worth $300,000 when the appraised (i.e. market) value is only$100,000.

I'm not saying people shouldn't be treated fairly, but they should not be able to take advantage of the system either.

[Ahavah B.]

Originally posted by vagaplanner

...Don't expect me to pay for your poor financial decisions and bad credit. I don't have perfect credit either, but that doesn't mean my property is worth $300,000 when the appraised (i.e. market) value is only$100,000.

I'm not saying people shouldn't be treated fairly, but they should not be able to take advantage of the system either.

The last time I checked, $300,000 is not 120% of $100,000, so according to your own example, they're holding out only for $120,000, which is well below the median price for a comparable new or existing home in most areas of the country. So what they're asking is entirely reasonable.

What you're advocating is that, basically, it IS ok to make homeowners become renters against their will for the benefit of developers and giant corporations. Why don't you just say that, then, other than the obvious class warfare implications? If you really believe that this is moral and ethical, that they deserve whatever hardship they get for the heinous crime of having to refinance for illness or job loss or just plain messing up, then just say that - don't pretend it can be dressed up, because it can't. You are saying the state has the right to steal from people and then fail to compensate them adequately so that they have the equivalent of what was taken from them, because for whatever reason, they are of a lower financial class.

Well, guess what? Unless you're Bill Gates, one day you might be that "lower" class. You should be careful what you wish for, because you might get it.

[vagaplanner]

You are saying the state has the right to steal from people and then fail to compensate them adequately so that they have the equivalent of what was taken from them, because for whatever reason, they are of a lower financial class.


That's not what I'm saying at all and I'm just using the numbers as examples, not literally. I'm saying that everyone should be treated fairly, including the government (i.e. the taxpayers). Everyone should be compensated adequately and I agree. But what I think is adequate and what you think is adequate is different. What does adequately mean? The compensation should not be determined by the property owners, but by an independent third party because the property owners are incapable of making a rational decision on their own compensation due to their personal involvement.

[jaws]

Originally posted by vagaplanner

That's not what I'm saying at all and I'm just using the numbers as examples, not literally. I'm saying that everyone should be treated fairly, including the government (i.e. the taxpayers). Everyone should be compensated adequately and I agree. But what I think is adequate and what you think is adequate is different. What does adequately mean? The compensation should not be determined by the property owners, but by an independent third party because the property owners are incapable of making a rational decision on their own compensation due to their personal involvement.

This is insane. If property owners cannot rationally evaluate the value of their own property, there is no such thing as private property. Whenever you go the supermarket to buy a gallon of milk, a judge should have to decide how much you pay for it, since neither you nor the supermarket can rationally decide how to value the gallon of milk.

What is adequate is what I decide what my property is worth to me. If people did not value their house more than the market price for them, every house would be for sale all the time. If I could sell my house for 300,000$ but choose to keep it, it is because I value my house more than that amount. When I no longer value my house that amount (perhaps because I changed jobs or my kids have moved out), then I will offer to sell it. However, you have no right to force me to sell for that amount so long as I still value my house more than the money.

[Ahavah B.]

Originally posted by vagaplanner

What does adequately mean? The compensation should not be determined by the property owners, but by an independent third party because the property owners are incapable of making a rational decision on their own compensation due to their personal involvement.

"Adequate" means exactly what I just described, and what the constitution demands: "just compensation" - they should have the EXACT SAME STATUS FINANCIALLY at the end of the process as when they began - that means they have to get enough out of their property to enable them to STILL be homeowners whatever their current income or credit.

That should be pretty plain - anything LESS is clearly taking away what they have and FAILING to compensate them for it - i.e. stealing from them. How much more obvious can that be?