CalCoast News

New twist to old issue of 'taking' of property

Rent control key to one of two ballot initiatives

By Michael Gardner
San Diego U-T Sacramento Bureau
May 4, 2008

SACRAMENTO – Dueling initiatives on the statewide ballot June 3 are being framed as a showdown over government's power to seize private property, but the outcome could turn on the underlying issue of rent control.

Both campaigns play up iconic images to sway voters, pitting the mom-and-pop shopkeeper forced to sell by a city hungry for more tax receipts against the fixed-income senior citizen pressured to leave a rent-controlled mobile home park.

Proposition 98 is the more far-reaching measure, proposing to ban government from taking property and turning it over to another private use, such as a mall or hotel. The initiative covers most properties: homes, churches, businesses and farms.

Significantly, Proposition 98 also would phase out rent control in mobile home parks and apartment buildings, potentially displacing tenants and making it more difficult for communities to meet affordable-housing goals.

Proposition 99 takes a much narrower approach, offering a layer of protection for homeowners. But it fails to provide businesses or churches with new legal defenses against forced seizures. Some potential loopholes could leave government with enough wiggle room to maintain the status quo.

“You have one that goes too far, and the other one is essentially ineffective,” said Lani Lutar, president of the San Diego County Taxpayers Association, which opposes both measures.

Neither prevents government from acquiring land for public benefits, such as roads, schools or hospitals. Both allow using eminent domain to abate nuisances and clear out crime-ridden property.

If both pass, the one with the most votes becomes law.

This is the second trip to the ballot box for those seeking reforms to eminent domain, a long-standing government tool used to buy out property owners even if they don't want to sell.

The clamor to sharply restrict eminent domain grew loudest in 2005 after a key U.S. Supreme Court ruling. In the 5-4 decision, the court said the city of New London, Conn., could seize middle-class homes to make way for a waterfront hotel and convention center to support a $300 million research facility for Pfizer Inc.

Many states, including California, responded with legislation or ballot measures. In 2006, California voters narrowly rejected sweeping restrictions, wary of the ballot measure that also could have weakened environmental protections significantly and upended local zoning laws.

Two years later, the same adversaries are back on the campaign trail, pitching poignant tales growing out of either real or potential impacts.

Rent control is the new wrinkle, one that could prove to be the downfall of Proposition 98 in a close election.

Will voters side with Proposition 98, appalled at the thought that their homes could be taken? Or will they oppose it out of fear of higher rents and easier evictions?

Some university professors who track eminent domain issues see rent control as the real motivation behind Proposition 98.

“It's a gambit,” said David Barron of Harvard Law School. “There's a broader property-rights agenda out there that I'm not sure can succeed on its own merit.”

Larry Gerston, a political science professor at San Jose State University, said, “I almost think their hope was to sneak that in under the radar. Sometimes you dress something up to cover your real objective.”

Proposition 98 supporters have not flinched from that criticism, insisting that there is no hidden agenda. Private-property rights should extend to the ability to collect fair-market rents, they argue.

Fears of widows and the poor being tossed on the streets are overblown, said Jon Coupal, president of the Howard Jarvis Taxpayers Association, a sponsor of Proposition 98.

“Nobody is getting thrown out of their homes. It's a phaseout,” Coupal said.

Nevertheless, critics have pounced, noting that a large share of the Proposition 98 campaign is being underwritten by mobile-home-park and apartment-building owners.

“We haven't seen a threat like this – ever,” said Tim Sheahan, whose mobile home sits on a $470-a-month rent-controlled space at Villa Vista Mobile Estates in San Marcos.

Sheahan worries that landlords will exploit loosened tenant safeguards to pressure occupants to vacate, leaving owners free to raise rents to market rates.

“Managers will be saying or doing whatever they can to get them to sell early,” said Sheahan, president of the local chapter of the Golden State Manufactured-Home Owners League, a statewide advocacy group.

In Oceanside, Mayor Jim Wood warned of potential harm to the city's seniors living in mobile home parks, many of whom are members of the “greatest generation” who served during World War II.

Oceanside, which has a senior population of about 20 percent, has 3,500 mobile homes. Many of those fall under some form of rent control.

Proposition 99 has been overshadowed by the pitched battle triggered by Proposition 98.

Proposition 99 would impose some restrictions on the ability of cities and counties to exercise eminent domain to acquire residential property. The measure applies only to single-family, owner-occupied housing. Proposition 99 is silent on protections for businesses and multifamily housing, exposing its sponsors to charges that it provides little real safeguards.

“Small businesses are clearly the target of most of these 'takings' cases,” said Michael Shaw, representing the National Federation of Independent Business.

At a time when cities are downplaying eminent domain, redevelopment agencies are pressing ahead. Two cases in point: Vista in San Diego County and Baldwin Park near Los Angeles.

In Vista, city leaders are looking to expand redevelopment-area boundaries, raising concerns among some residents. Assurances that eminent domain would be used as a last resort haven't quelled the fears among homeowners such as Jerome Hymes, who, along with his two children, drew their names in freshly poured concrete in the backyard of the home they have shared for 10 years.

“I told them this is home – this is the place you can always come home to,” Hymes said.

Maybe not – unless voters approve Proposition 98, Hymes said. His North Indiana Avenue home is zoned for mixed use, exposing it to eminent domain proceedings.

“Proposition 99 won't protect me,” Hymes said.

In Baldwin Park, a band of businesses and residents is backing Proposition 98, believing it would help preserve a neighborhood many have lived and worked in for decades.

Baldwin Park officials want to bulldoze several blocks to make way for a shopping center.

For Ken Woods, who operates an industrial-sewing-machine-repair shop, this would be the second time he has been forced to relocate. Land should be taken only for clear public benefit, such as roads or schools, Woods said.

“They should use eminent domain the way our forefathers said we should – not the way developers want us to,” Woods said.

Overt property grabs may still be rare. But don't tell that to Ahmad Mesdaq, whose battle with the city of San Diego to keep his Gaslamp Quarter Gran Havana Cigar & Coffee Lounge drew national attention. The city forced Mesdaq out to make way for a hotel and eventually agreed earlier this year to pay him $7.8 million. The hotel is still on the drawing boards four years after the city claimed Mesdaq's shop, though ground-breaking is now planned for July.

Lutar, the San Diego taxpayer advocate, said eminent domain restrictions are needed given the threat to property owners from overly ambitious redevelopment agencies.

But a case can be made for leaving agencies with some powers. Proposition 98 “could halt desirable and necessary redevelopment opportunities,” she said, using Petco Park as an example.

Lutar said her board opposes Proposition 99 primarily because of a “poison pill” provision that essentially would nullify Proposition 98 if both pass.

“The proponents of Proposition 99 weren't genuinely interested in putting forward eminent domain reform,” Lutar said. “Proposition 99 was created specifically to kill Proposition 98.”

Michael Gardner reports for Copley News Service. Staff writer Lola Sherman contributed to this report.