This Land Is My Land

By Margot Roosevelt

For 60 years, three generations of Robert Blue's family have operated a luggage store at Hollywood and Vine, along the brass-starred Walk of Fame. Lucille Ball bought her suitcases there. The neighborhood fell into disrepair in recent years, though, with homeless people camping out on trash-strewn streets. Blue's shop was looking shabby too, its window displays outmoded, its linoleum worn. But when the City of Los Angeles moved to condemn his building--not to build a school or a fire station but to make way for a glitzy $500 million private hotel and condo complex--Blue dug in for what would become a three-year legal fight to save his store. "Big developers come along and say, 'Hey, that's a nice corner,'" he fumes. "Where will it stop?"

Blue won, and is now part of a movement that is pushing back hard against the government's power to meddle with property owners. The campaign is largely a response to the Supreme Court's controversial 2005 decision allowing the city of New London, Conn., to raze private homes for a commercial waterfront project. The ruling struck a deep chord in the American psyche; that the government could seize your house or business in order to build a road for everyone's use was one thing, but the idea that it could hand your property over to private developers was, to many, intolerable.

Since then, 24 state legislatures have passed laws limiting the government's ability to appropriate land for privately financed projects, and similar measures will be on 11 state ballots next week. Three of those initiatives, plus a fourth measure unrelated to eminent domain, would go even further--forcing governments to compensate anyone whose property lost value because of zoning, environmental or, in some cases, consumer-protection laws. That has opponents of these "regulatory takings" measures--in California, Arizona, Idaho and Washington--asking Blue's own question: "Where will it stop?"

California's Proposition 90, says Chris McKenzie, executive director of the California League of Cities, "is designed to eliminate virtually all government regulation." Environmentalists say that if it passes, California's coastal commission, unable to compensate everyone who wants to build along the oceanfront, would no longer be able to protect it from ugly McMansions and ensure public beach access. And developers could build homes on dangerously steep slopes or plop factories into residential neighborhoods. More imaginatively, the nonpartisan California Budget Project argues that because Prop 90 applies to consumer-protection laws, if the state restricted ATM fees, it would have to compensate banks for the revenue they would lose because of the capped charges.

Many of the claims are "hysterical gibberish," maintains Prop 90 spokesman Kevin Spillane, noting that compensation would be required only for "substantial" damage to property values. The initiative exempts health and safety regulations, he points out, and current zoning laws would still apply, protecting beaches and steep slopes, for instance. As for future laws, he argues, "if you own a piece of property that's zoned one way, then it is unfair for the government to change the rules." While California's initiative affects only future government actions, Washington's Initiative 933 allows landowners to file retroactive claims for changes in zoning rules over the past 10 years.

The four takings initiatives, which are largely funded by libertarian activist Howard Rich, a New York real estate investor, are modeled on a 2004 Oregon initiative. Measure 37 effectively overturned the country's strictest planning regime, a 30-year-old law that concentrated growth in cities while protecting farmland and open space. So far, aggrieved property owners have filed 2,724 claims seeking $6.1 billion in compensation. Under the law, local authorities can "pay or waive," and so far, strapped for funds, they are mostly choosing to waive zoning rules. As a result, some Oregonians fear that sprawl will soon strangle Portland's famous greenbelt.

For Robert Blue, back on Hollywood and Vine, the issue is fairness, whether the government seizes land or merely passes a law affecting the value of a home or business. "If you make an investment and the rules change," he says, "you should be compensated." It's up to his fellow taxpayers in California and the three other states to decide whether they are ready to pay up.