Benjamin Barr

Reform needed to restore private landowners' protection

Posted on September 29, 2006 | Type: Op-Ed | Author: Benjamin Barr
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In the past year, people around the country have become quite concerned about private property rights. That's understandable. The U.S. Supreme Court ruling in Kelo v. City of New London gave governments the green light to seize homes, lands, or businesses through eminent domain if they could conjure up some better use for the space. That's one way to enhance curb appeal, Soviet style.

In turn, some 30 states adopted stricter laws this year to stop this abuse. But Arizona wasn't one of them. Adding insult to injury Arizona governments have been abridging property rights through more subtle means like down-zoning and regulations that diminish property values.

Take the case of Wonders v. Pima County. Pima County decided landowners could not subdivide their property unless they established a plan to preserve native plants. The landowners set aside 45 acres to comply with the law, reducing the uses and value of the land. Yet the Arizona Court of Appeals did not require Pima County to compensate those landowners.

"Regulatory takings" is the term used for the subtle ways in which government takes land or reduces its value without compensating owners for it. The Pima case is a classic example of a regulatory taking and violates the Fifth Amendment to the U.S. Constitution and Article 2, section 17 of the Arizona Constitution. But courts have been reluctant to protect landowners from regulatory takings because the government hasn't technically taken legal title away from the owner.

Oregon's experience in regulatory takings is instructive. In 1973 Oregon set out to restrict urban growth and retain open spaces through urban growth boundaries. Under Oregon's law, government decides what constitutes an "adequate land supply" for its citizens and development is prohibited or discouraged outside the growth boundaries.

Oregonians finally had enough. In 2004, voters approved Measure 37 by a 61-to-39 percent margin. Measure 37 is a great antidote for land-use-laws-gone-wild:

Government must compensate landowners if a regulation devalues their property. Alternatively, government may waive the regulation against the landowner if it doesn't want to pay. That's a simple step toward restoring the sanctity of private property rights.

This fall, citizens in six states, Arizonans among them, will decide whether Measure 37-like initiatives will become law. Each state's initiative adds a different twist to reform. Proposition 90 in California and Nevada's "Property Owners Bill of Rights," for example, always require compensation when land-use regulations decrease property values. No waivers are allowed.

Compared to other states, Arizona's Proposition 207 is more modest. Prop. 207 gives government two options: Pay the cost or waive the rule. It also includes seven exceptions. Government need not compensate a landowner if the regulation is designed to protect health and safety (environmental regulations), prohibit a public nuisance (the smelly factory), or regulate obscenity. At the end of the day, the ordinary functions of government would continue as usual but with a restored protection for private property.

In the wake of Kelo, reform is required to restore protection to private property rights. A recent Goldwater Institute study, "Playing the Takings Game: How Government Regulates Away Property Rights," details the fundamental building blocks of this reform. How that takes shape in Arizona is a matter left to voters. But one thing is clear: Without reform, a taking by any other name remains the same.

Benjamin Barr is a constitutional policy analyst with the Goldwater Institute, The Goldwater Institute does not support or oppose specific legislation, but adheres to its educational mission to help policymakers and citizens better understand the consequences of government policies.

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