In 2005, the U.S. Supreme Court upheld a Connecticut city's right to seize through eminent domain the waterfront homes of longtime residents for private development. The court held that, like the construction of schools and roads, economic development itself constitutes a "public use" under the Fifth Amendment. Both liberals and conservatives were outraged. As dissenting Justice Sandra Day O'Connor wrote, "The specter of condemnation hangs over all property. Nothing is to prevent the state from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory."
Some 40 states responded by passing laws to tightly define "public use" so that the government could not take land from one taxpayer and hand it to a richer one. Despite strong voter disapproval of the Kelo decision, as the Connecticut case is known, California lawmakers have failed to act. Thanks to Sacramento's three-year void, various groups have placed three different initiatives on the ballot, including two voters must choose between on June 3.
The first, which property-rights advocates put together for 2006, was Proposition 90. It banned eminent-domain takings for private developers. California voters rejected the measure because it delved into other issues, and at an unpredictable cost.
Don't worry, groups representing local governments, such as the League of California Cities, told critics. They promised that if voters rejected Proposition 90, then they would work with the Legislature to craft a better measure that would correct the private-use abuse made infamous in Kelo. Didn't happen.
Instead, when the Legislature again failed to pass a reform bill, property-rights advocates and government groups trotted out rival measures, Propositions 98 and 99.
According to its ballot argument, Proposition 99 represents "real eminent domain reform -- no hidden agenda."
Bunk. Sure, it protects homeowners from having the government transfer their houses to private developers. But Proposition 99 does not protect business owners, the usual target of such takings.
Proposition 98 would prohibit state and local governments from taking private land from homeowners and businesses and transferring it to another private party. As Joel Fox of the Small Business Action Committee noted, Proposition 98 is the only measure that helps small businesses.
The bonus for the property owners' lobby: Added language would phase out local rent-control ordinances and might limit laws that require developers to build affordable housing.