Policy Brief

Analysis of California’s Proposition 90

The Protect Our Homes Act

Executive Summary

The protection of private property rights is a foundational principle underlying our constitutional system of government and market-based economy. Yet over the last several decades, property owners in California and across the nation have witnessed an accelerated erosion of their property rights in two fundamental ways.

First, the government’s power to take private property through the use of eminent domain- initially intended to ensure that roads, infrastructure, and other legitimate public facilities were built-has gradually expanded to cover a wide variety of projects deemed to serve a public “benefit,” no matter how broadly or vaguely defined. For example, eminent domain has been widely used to transfer property from one private owner to another for economic development purposes, giving government the power to hand-pick winners and losers and undermining our free market economic system and citizens’ private property rights.

Second, states and local governments have adopted an increasing variety of land use regulations aimed at preventing the spread of urban sprawl and minimizing the effects of growth and development on the environment and citizens’ quality of life. Examples of such regulations include zoning ordinances, subdivision regulations, and open space preservation ordinances. Local governments in California have been particularly aggressive in expanding the regulatory state, adopting literally tens of thousands of ordinances and regulations governing the use of private property. However, these regulations can significantly limit the rights of landowners to use their land in the ways that were legally permissible and authorized when they purchased their property and can dramatically reduce the property’s market value, imposing an economic hardship and significant loss of value upon the owner. Compounding the problem is that property owners are only rarely compensated for the economic impacts associated with regulation, also known as “regulatory takings.”

Proposition 90-the proposed constitutional amendment on the November 2006 ballot known as the “Protect Our Homes Act”-attempts to address both of these threats to private property rights by restricting the use of eminent domain to a limited set of public uses and preventing governments from adopting unfettered new regulations that significantly reduce the value of private property without compensating the affected property owners. Clearly, many Californians are concerned about the security of their homes, businesses and property, as over 1 million citizens signed petitions to get Proposition 90 on the ballot.

Among its key provisions, Proposition 90:

  • Specifies that eminent domain may only be used for “public use” and prevents the transfer of property from one private party to another private party, unless that private entity is performing a public use project.
  • Places the burden on government to prove “public use” in all eminent domain actions.
  • Allows the owners of condemned property to recover legal fees, moving expenses, and other costs they incur as a result of an eminent domain action.
  • Requires government to compensate landowners for substantial economic losses to private property that may result from the adoption of new state and local government regulations and statutes, except when those actions are taken to protect public health and safety.
  • Exempts, or “grandfathers,” all existing state and local government statutes and regulations from its provisions, leaving all existing land use and environmental regulations in place. This means that private land that had previously been rezoned as agricultural, environmentally sensitive, or other designations would retain those designations. The initiative also allows for reasonable amendments to these existing land use regulations as long as they pertain to the regulation they amend without violating the tenets of Proposition 90.
  • Explicitly preserves government’s power to condemn property to abate nuisances such as blight, obscenity, pornography, hazardous substances or environmental conditions, so long as actions are limited to the abatement of specific conditions on specific parcels.

Proposition 90 would rein in government’s expansive power to award certain private parties the lands that belong to another through the application of force. Under Proposition 90, government could no longer use eminent domain to advance any purpose that it deems worthy, and no longer would property owners lack basic protections that prevent them from getting a fair shake in eminent domain proceedings.

Further, Proposition 90 would prevent future regulatory takings abuse by requiring governments to compensate landowners for significant economic losses incurred due to the adoption of new regulations. For example, if a new regulation limiting the cutting of oak trees prevents a property owner from building on his land, the government would have to compensate him for the lost value from using his land to build on. Simultaneously, it exempts all existing state and local regulations from this requirement, keeping the land use and environmental protections Californians currently enjoy fully intact. Proposition 90 would simply require government to pay for the public benefits it seeks to gain through new regulations, rather than forcing a minority of property owners to bear the burden of providing benefits enjoyed by the community-at-large.

Proposition 90 represents a momentous opportunity for Californians to take a strong stand against the abuse of private property rights by government. It would amend the state Constitution to establish reasonable and just property rights protections as a foundational framework for California law, effectively reiterating and clarifying the Founding Fathers’ intent as established in the United States Constitution. Proposition 90 would also impose fiscal discipline on government, requiring it to adequately account for and weigh the costs and benefits of public action. Finally, it would help reinforce the notion that the fundamental purpose of government is to protect our rights, not selectively undermine them.