The Destroy California Initiative

Pub date October 31, 2006
WriterSarah Phelan

If you knew there was an initiative on the ballot that would make it impossible for government to protect the environment, build affordable housing, raise minimum wages, and mandate health care, you’d vote no on it, right?
Especially if you knew this measure would force taxpayers to spend billions to prevent developers and private property owners from doing things that harm neighborhoods, communities, and the environment.
So why is Proposition 90, which does all this and more, still leading in the polls?
It’s all about fear — and the ability of one wealthy real estate investor from New York City to fund a misleading campaign that exploits legitimate concerns about eminent domain.
Eminent domain is the legal procedure that allows the government to take over private property. It’s been used traditionally to build roads, rail lines, schools, hospitals, and the like. But it’s also been used — abused, many would say — to condemn private homes and turn the land over to developers for more lucrative projects. And after the US Supreme Court ruled in 2005 that doing so was OK, it was easy for property-rights types to whip those fears into a frenzy.
New York Libertarian and real estate investor Howie Rich, who hates government regulation, used the court decision to saddle up a herd of Trojan horses with eminent domain, stuffing the poison pills of “highest best use” and “regulatory takings” deep in their saddlebags, slapping their rumps with wads of cash, and sending them into California, Arizona, Idaho, Montana, Nevada, Oklahoma, and Washington.
Here in California, Rich’s millions went in large part toward paying petitioners a buck per signature to qualify Prop. 90 for the ballot. The pitch was stopping eminent domain — but there was little mention of the extreme provisions contained within the measure’s fine print that if passed, will mean more lawyers and fewer herons and hard hats.
For starters Prop. 90 changes the rules for calcuutf8g how much the government has to pay property owners when it takes their land. The new rules would dramatically increase the price of infrastructure and public works projects like building roads and levees, as well as purchasing open space and preserving habitats and endangered species.
Worse, Prop. 90’s language changes the valuation of regulatory takings. That’s legal mumbo jumbo, but what it amounts to is this: whenever the government takes actions that aren’t explicitly for the protection of people’s health and safety — like establishing rent control, minimum wages, and agricultural easements — property owners can claim that the value of their holdings was decreased. (Protecting an endangered species, for example, might prevent some parcels from being developed.) Under Prop. 90 those landowners can file claims of “substantial economic loss” — and put the taxpayers on the hook for billions (see “Proposition 90 Isn’t about Eminent Domain,” page 22).
Prop. 90 opponents predict that if the measure passes, its effects will be disastrous, wide-ranging, and immediate.
Bill Allayaud, state legislative director for the Sierra Club, told us it was Prop. 90’s “regulatory takings” clause that led to unprecedented opposition after individuals and groups analyzed the measure’s fine print.
“One little paragraph activated a coalition like we’ve never seen in California history,” Allayaud says.
Prop. 90 flushes away a century of land use and community planning, including regulations and ordinances that protect coastal access, preserve historic buildings, limit the use of private airspace, establish inclusionary housing, and save parks. In short, Prop. 90 destroys everything that makes California a decent place to live.
Over at the California Coastal Commission, executive director Peter Douglas frets that his agency will no longer be able to carry out its mandate to protect the coast.
“Every decision the Coastal Commission makes where we approve projects but impose conditions to protect neighborhoods and communities will be subject to claims,” Douglas says.
“Sensitive environments like the San Francisco Bay and Lake Tahoe will be exposed, along with residential neighborhoods, ag lands, and public parklands. And it will erode the state’s ability to protect against new offshore oil drilling, new liquid natural gas terminals, harmful ocean energy projects like offshore wind turbines and wave energy machines and make it impossible to set aside essential marine reserves to restore marine life and fisheries.”
Members of the California Chamber of Commerce oppose Prop. 90 because it will make it more complicated and costly to build new infrastructure like freeway lanes, sewer lines, levees, and utility sites.
President Allan Zaremberg observes, “At a time when California is trying to finally address the huge backlog of needed roads, schools, and flood protection–water delivery systems, the massive new costs of Prop. 90 would destroy our efforts to improve infrastructure.”
Among government agencies the outlook is equally bleak. Unlike Oregon’s Measure 37, which passed in 2004 and has already led to over $5 billion in claims, Prop. 90 isn’t limited to private land but extends to private economic interests. This wide-ranging scope means that it’ll be almost impossible for government to regulate business without facing claims of “substantial economic loss,” making it prohibitive to protect consumers, establish mandatory health care coverage, or raise minimum wages.
San Francisco city attorney Dennis Herrera told the Guardian, “If Prop. 90 passes, we might as well get out of the business of local government.”
Asked what California would look like if Prop. 90 had been law for a decade, Gary Patton, executive director of the Planning and Conservation League, paints a sprawl-filled picture.
“All the project proposals that weren’t built would have been, open space and parks wouldn’t have been preserved, almost every public works project would have been affected, and things wouldn’t have been constructed, because there would have been no money because the cost of everything would have gone up.”
Currently, the cost of a piece of land is valued by the market. Under Prop. 90 land would be valued by what it might be used for.
“For instance, a piece of land alongside a highway could one day be developed into a subdivision,” Patton explains. “So that’s the price it would have to be bought at. So unless taxes are raised, Prop. 90’s passage would mean that California would be able to do less. Traffic would be worse. The affordable housing crisis would intensify. Fewer swimming pools and civic centers would be built. Everything that’s done through spending dollars collectively would cost more.”
Within the Bay Area individual communities have chosen to adopt urban growth boundaries, but if Prop. 90 was already in place, Patton says, many environmental and community protection projects wouldn’t have happened.
“Where now we have more focused growth, which is economically and socially as well as environmentally beneficial, there’d be lots more sprawl,” Patton explains. “We’d be a lot more like Fresno and Bakersfield and San Bernardino and Los Angeles. The Bay Area is a place where more people have got together and made sure their communities did things that have been beneficial.”
As for restoring Golden Gate’s Crissy Field or the South Bay Salt Ponds or preserving bird and wildlife sanctuaries, forget about it.
“We’d be more like Houston. Prop. 90 says unless you can pay me for not developing this land, then one day I’m gonna be able to develop it,” Patton says.
Mary Ann O’Malley, a fiscal and policy analyst at the state’s Legislative Analyst’s Office, helped write the legislative analysis for Prop. 90 and as such is familiar with the measure’s far-reaching but more obscure provisions.
“Governments will be required to sell land back to its original owner if they stop using the land for the purpose stated when it took the property in the first place,” O’Malley explains. “And government won’t be able to condemn property to build on another property for the purpose of increasing local government’s tax revenues, but it could do so to build roads and schools.”
As for how the “regulatory takings” section of Prop. 90 affects government’s ability to protect the environment, O’Malley says local governments frequently impose case by case mitigation requirements to uphold the Endangered Species Act, telling a developer where it can build.
“If this is simply an enforcement procedure required by the Endangered Species Act, then it probably would not be viewed as a compensatory act, but if it’s an independent local project decision, it might fall within Prop. 90’s purview.”
Although Prop. 90 supporters say it won’t affect existing laws, Douglas says it’s simplistic to believe that current zoning won’t be superceded.
“Zoning plans aren’t exclusive. They may allow ancillary uses with government’s approval. For instance, you can build additional housing and wineries on ag land, but sometimes these uses are totally incompatible with the area. At which point local government steps in and says, ‘Oh no you don’t.’ But under Prop. 90 government is vulnerable to claims.
“Taxpayers are gonna be stuck with a multibillion-dollar bill. It should be called the ‘Destroy California Initiative.’” SFBG
Read about the Proposition 90 money trail and the truth behind the campaign’s stories at