This isn’t so much a property rights story, as much as a story of what is happening to our economy. The Silverdome, which was built for 55.7 million dollars 35 years ago, just sold for $583,000. That is an amazing statement about how bad Detroit’s economy is doing today. Frankly, its downright scary.
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Growing up in California, I recall being amused by the ”Welcome to California, Now Go Home” bumper sticker. I don’t see those bumper stickers anymore. I wouldn’t be surprised to see a “Welcome Californian, Now Go Home” bumper sticker in places like Texas and Arizona, where many California citizens and California businesses have fled. Two major news stories of today seemed to illustrate the problem. First, we have news that the California budget deficit “fixed” only a few months ago, is predicted to be 21 Billion, according to the Orange County Register. Second, we have the report from the LA Times that the state energy commission has adopted a ban on the sale of televisions believed to consume too much energy. Our state government apparently just doesn’t get the link between overregulation which punishes business and a weak economy. The quote of commissioner Rosenfeld says it all: “It looks like a very good deal for society . . . “ These arrogant fools essentially believe they know what is good for all of us, whether we like it or not. Texas sounds better every day.
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The California State Game and Planning Commission is considering banning fishing of some parts of the California coast, including Laguna Beach, reports the Orange County Register. Do people who make a living in the fishing industry have a right to continue that livelihood? If the government is going to take away that right, should they be compensated? People have made enormous investments in developing this business. It seems it does not matter how badly our economy is hurting, the environmental advocates will continue to push for regulations which kill California business. They should consider environmental protection in the Third World–because that’s where they are sending our economy.
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What happens when billions of dollars of federal stimlus funds are approved to support global warming initiatives that make no economic sense? You get solar mirrors in the middle of the california desert. Unfortunately, the desert is populated by the flat tailed lizard. As the LA times reports “There are significant environmental issues involved in the California gold rush-like scenario unfolding in the desert,” said Peter Galvin, conservation director of the Center for Biological Diversity. “We are not going to just roll over when critical wild lands and last habitats of endangered species are in the mix.”
The company behind the project is already spending a huge amount of money on buying 6500 acres of habitat for this little lizard, who is kind of cute:
6500 Acres Just Isn't Enough For These Little Fellas
Global warming fanatics versus environmental fanatics. Who will win? Sadly, its all of us who pay taxes that lose.
I can’t think of a better way to spend 15 Billion of our money, can you?
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For those of you who don’t work in the area of regulatory takings, it may surprise you that it is extremely difficult to get a trial of federal takings claims in federal courts. With the antagonism of many state courts to takings claims–California is one of the worst–the ability to litigate takings claims in federal court is crucial. That is why October 7, 2009 Ninth Circuit decision in Los Altos El Granada Investors v. City of Capitola is so important. This is another case I worked on with Rob Coldren and Bill Dahlin of HKC.
I will spare you the procedural history of the case spanning 9 years. The decision summarizes that procedural history, noting the “sisyphean task” facing property owners seeking to adjudicate federal takings claims in federal courts.
The substance of the Appellate Court’s holding was that a proper “reservation” of the right to have a federal court determine federal claims remained viable. The Appellate Court reversed a District Court’s dismissal of the property owner’s claim and remanded the matter for a determination as to which claims should proceed to trial. The decision, while technically dealing only with procedural matters, provides much needed guidance for lawyers (and their clients) seeking to litigate Fifth Amendment claims in Federal Court. It is a welcome relief. Combined with the Guggenheim decision, local governments have a lot more to worry about when they adopt confiscatory regulations. It is long overdue.
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This article on rent control in India is a few years old, but the points it makes about the impact of rent control are timeless.
Filed under: Regulation Nightmares, Rent Control | Leave a Comment »
The good guys win one in a rent control case. (Ok, I’m a bit biased since this is our client) In a ground breaking decision in Guggenheim v. the City of Goleta, a three judge panel of the Ninth Circuit has concluded that the City of Goleta’s adoption of rent control in 2002 caused a taking of the Guggenheims’ Rancho Mobile Home Park property. The Court found that the adoption of the rent regulation was a taking because it had resulted in a huge wealth transfer from the park owner to tenant. The Court cited evidence that space rents were at 20 percent of fair market and mobile homes were selling at huge premiums because of rent control. The Court also found that when the government imposes such onerous regulation in the name of advancing affordable housing, it is improperly imposing a burden on an individual property owner that should be borne by the community as a whole. The Court left the decision of how much compensation to be paid to the District Court. The Guggenheim decision is the first state or federal appellate decision which has found the adoption of rent control caused a compensable taking. I am proud to be a part of the legal team representing the park owners.
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Mobile home park owners suffering under unfair and extreme rent control have been, in increasing numbers, seeking an exit strategy which will allow them to recover the underlying value of their land. One such exit strategy is converting rental mobile home parks to subdivisions, allowing the individual lots to be sold at fair market value, unburdened by rent control. State law is generally very supportive of this strategy, allowing park owners to subdivide without the typical impact fees and improvements demanded by local governments in conjunction with a subdivision. This strategy has become highly controversial and political, as tenants who believe they have a permanent entitlement to rent control, influence local governments, who ignore the limitations of state law. But that may be coming to an end with the decision of the First District Court of Appeal in Sonoma County Park Associates v. County of Sonoma. The County of Sonoma had adopted its own “conversion ordinance” designed to stop conversions except with the approval of residents and included numerous onerous conditions designed to make the process as difficult and expensive as process. The notably left of center court, in an exhaustive and well thought out analysis, found the County’s conversion ordinance was preempted by the state law. This reported decision is a major victory for many park owners, including several I represent. The Court of Appeal, however, showed its true feelings in essentially telling the state legislature that it should change the law to give local jurisdictions more authority to hinder conversions.
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Tom Malloy owns 320 acres of property in the Mojave Desert. He would like permission to create a fields wants to carve out a course for racing, driving and testing cars. The proposed Fairmont Butte Motorsports Park would be used primarily for events sponsored by car clubs and racing organizations. One would think the middle of the Mojave Desert would be an ideal location for such a project. Apparently not. Local environmentalists complain the site is a threat to poppyseed fields a mile away. The LA Times quotes Milt Stark, president of the Poppy Reserve/Mojave Desert Interpretive Assn., a volunteer group that gives tours and talks at the wildflower sanctuary. He complains: “It’s a terribly inappropriate business for that area. Visitors who come to see the poppies come out there to have peace and quiet.” Never mind that Malloy promises to clean up a site that is littered with shell casings and trash from trespassers. Never mind the construction and operation of the project would likely boost the local economy. We can’t disturb the poppy watchers!
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We know Sotomayor is a liberal on civil rights issues, but what about the civil right to protection of your property? Not surprisingly, it does not appear she will be much of an advocate for property rights, at least based on her decision in Didden v. Village of Port Chester. I would describe Didden as a step beyond the roundly hated Kelo case because it implicitly approved condemnation undertaken to benefit a private party where the local government clearly allowed itself to be used as a tool of of a private redeveloper. The City condemned a private property where the owners had proposed to develop a drug store after the property owners refused an extortive demand of the redeveloper for a payment of $800,000 or a 50 percent partnership interest. See a good discussion of the case on this blog. It seems, post Kelo, any action authorized by a government is, by definition a valid public purpose. That kind of government power is scary.
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