After Veto, California Property Rights Still Not Safe

The California State Assembly finally passed a budget bill this week, a part of which granted Governor Jerry Brown’s wish of eliminating the hundreds of redevelopment agencies in the state. The governor, however, vetoed the budget almost immediately after it was passed, further delaying this important legislation that could end an era of property rights abuse in the Golden State. If America’s most populous state is to catch up with the rest of the nation in safeguarding private property, the scourge of redevelopment agencies that trample on citizens’ civil liberties must be stopped.

In 2005, the Supreme Court decided in Kelo v. New London that the City of New London could use its power of eminent domain to seize Susette Kelo’s modest waterfront home for the purpose of building a hotel and condo complex to accompany a nearby pharmaceutical plant owned by Pfizer. As a consequence of this decision, which affirmed that city officials can seize land merely because they believe it can generate more tax revenue, “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” (See O’Connor’s dissent).

After Kelo, 43 state legislatures, including California’s, passed reforms of their eminent domain laws to afford greater protection for private property owners facing condemnation. California’s reform was substantial, but limited. It was not put to the test until this year, when a lawsuit against National City resulted in a state court barring a redevelopment agency from declaring a non-profit youth center as “blighted” because it was in a massive redevelopment zone. Under the eminent domain laws, the city could seize it and virtually any other property in the downtown area for the purposes of economic development.

Although the youth center was victorious in this case, the outrageous overreach of National City is paradigmatic of redevelopment agencies in California. The state controller investigated a sample of California’s redevelopment agencies, and the results were shocking; unscrupulous, illegal, and fraudulent accounting practices abounded. Redevelopment funds were misallocated to pay for city officials’ salaries and even to pay for state capital lobbyists. Properties declared as “blighted,” meaning slum conditions, included million-dollar oceanside homes and a luxury golf course. The shameless behavior of California’s redevelopment agencies demonstrates their willingness to flaunt the law even after eminent domain reforms are in effect.

Eliminating all redevelopment agencies would extinguish overnight their ability to terrorize Californians with the prospect of losing the property they worked so hard to own. Ironclad property rights are the cornerstone of a free and prosperous nation, but this fundamental liberty is under attack in California and in other places across the nation. Public officials everywhere owe it to their constituents to ensure that everyone is secure in their property and free from arbitrary government expropriation.

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