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The Great Debate on 98 and (99): Rent Control’s Invisible Demise
By Wes | May 16, 2008
You gotta love this blog. Throw out the words “eminent domain” and “rent control” and it’s like honey for bears.
Whoa Nellie!
“Rent control?” Did somebody say “rent control?”
If you read the full text of Proposition 98, you will not find the term “rent control” used once. Not once. And yet, Gilman and I and everyone else here seems to agree that one of the things Proposition 98 does is prohibit rent control.
There are two possible reasons for the invisibility of “rent control”: First, perhaps the sponsors simply lack the balls to be upfront with what they are trying to accomplish. If you’re going to prohibit rent control, say so and let the voters decide for themselves. But they can’t do this; maybe it’s because polls have shown that Californians support rent control, and if they use the term upfront, what little chance they have at winning will go out the window.
Secondly, maybe the sponsors are applying the lessons learned from Proposition 90, which lost in 2006. Proposition 90 would have prohibited state and local governments from condemning or damaging private property to promote other private projects or uses, AND would have limited government’s authority to adopt certain land use, housing, consumer, environmental, workplace laws/regulations. And it’s no coincidence that the Jarvis organization was part of this effort too. So they tweak the language and try again.
Proposition 98’s “Statement of Purpose” not only says that state/local government may not use eminent domain to take private property for another private use; it also says that state/local governments may not use “their power to take or damage property for the benefit of any private person or entity.” So, not only can you not “take” property, you also can’t “damage” property.
Proposition 98’s namby-pamby dancing around the term “rent control” creates a situation whereby a local government’s use of the police power could be interpreted such that it “damages” private property and is automatically a “regulatory taking,” a far more restrictive approach than is now the case. If a city downzones properties to a lower density, were they “damaged?” Under today’s rules, the answer is no: it is a valid exercise of the city’s police powers. If a city adopts more restrictive development standards for single-family properties such that the permitted size of a house shrinks, were the properties “damaged?” Under today’s rules, no: it is a valid exercise of the city’s police powers. If a city restricts how much you can alter an historic property, has that property been “damaged?” Again, no, under today’s rules. In all of these cases, how the courts will interpret Proposition 98 and its loosey-goosey language is anybody’s guess, but why take the chance? Proposition 98 proponents may accuse the opponents of creating confusion by raising this issue, but what else are they going to say to deflect attention away from this trickery?
Finally, I have to laugh when opponents of Proposition 98 are dismissed as faceless bureaucrats and evil developers bent on obliterating helpless homeowners. About 80% of Proposition 98’s financial support comes from apartment and mobile home park owners – hardly a pantheon of populism in a state where 42% of the households are renters. Opponents of Proposition 98 cover a whole gamut of interests – from local government, business groups, senior citizens, all statewide environmental groups, faith groups, California Tax Reform Association, League of Woman Voters…..on and on and on. Imagine – the BIA and the Sierra Club actually agree: vote NO on Proposition 98.
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Topics: Main Page, Government |
May 16th, 2008 at 12:06 pm
Absolutely on target! The Prop. 98 people keep talking about “takings,” when they really should be talking about “paid fair market value in exchange for your property.”
And their talk of “regulatory takings” really should say, “Extortion.” You want me to stop polluting? Pay me! Otherwise, your pollution control requirements are increasing my business costs, and that’s a taking. Phooey on that.
May 16th, 2008 at 1:29 pm
Wes, thank you!
May 16th, 2008 at 2:04 pm
Finally an honest post on the topic.
May 16th, 2008 at 4:18 pm
Tk, have you read Prop 98? Your “pollution” example has no basis in fact under Prop 98.
“takings” are defined in Prop 98 and simply do not result in the situation you offer.
The only thing honest about this issue, is the length to which government officials will go to maintain the powers they hold.
May 17th, 2008 at 12:22 pm
I read the definition of “taking” in Prop 98. I’m not sure how it could be written more broadly.
If you want to block eminent domain, put an eminent domain initiative on the ballot. If you want to get rid of rent control, put a rent control initiative on the ballot. If you want to abolish all government restrictions, put a libertarian anarchist initiative on the ballot.
Pushing an initiative that gets rid of all forms of “taking” just means you’re too cowardly to be honest about your motives.
May 17th, 2008 at 2:35 pm
I live in a mobile home park. Prop 98 terrifies us here. We own our homes, but if prop 98 passes we will lose much of the value of our homes - and could not afford to ever move - since the next possible buyer of our home could be charged a much higher space rent. The selling price- the value - of our homes will drop by a lot. You might think this is fair - but please consider this fact: the person (corporation) who bought our mobile home park bought the park while it was both zoned for mobile home use - and also, this is important - the park was already under rent control. This means that the mobile home park’s landowner bought the park for far less money than if it was zoned for other uses.
To suddenly change the rules now would give that landowner a windfall - while hurting all the people that actually bought homes in the park.
I wish this was not so - but it is. Anyway, that is why all this money has been given to the prop 98 campaign. It is being funded by people looking to score a nice profit - regardless of the trickery it takes to get it passed - or the damage to real people it will cause.
May 17th, 2008 at 3:33 pm
JB - The definition of “taking” that is included in Prop 98 reads “taken includes transferring the ownership, occupancy, or use of property from a private owner to a public agency or to any person or entity other than a public agency, or limiting the price a private owner may charge another person to purchase, occupy or use his or her real property.” How in the world is that “broadly” written?
Howard- I am terrified to pay free market prices for lots of items as well. I just don’t expect the government to force someone else to pay for these items for me. If you can’t afford the current fair market rent for your mobile home space, then maybe the government could assist you - I just don’t think they should force a private owner to do that for them.
May 18th, 2008 at 9:54 pm
But the government is the duly elected government for that community. There is no statewide rent control, and vacancy decontrol ensures that when a tenant moves out, the rates go back to fair market value.
May 21st, 2008 at 10:58 am
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