Eminent Domain and Gov. Napolitano

This week, Gov. Janet Napolitano vetoed House Bill 2675, a bill that, if it became law, would have severely restricted the use of eminent domain by municipalities. Her letter explaining the veto is here.

From the AZ Republic -

Its supporters argued that it protected property owners from having their property unfairly taken by a municipality and given to a private developer;

Opponents (aka - cities and developers) argued that the bill removes the best tool that cities have for dealing with blighted areas, or at least made the process overly onerous. They took to calling the bill "The Slumlord Protection Act."

More background on the bill, from the East Valley Tribune.

With the veto, the legislature may put the question on the fall ballot as a referendum; failing that, there is a petition drive underway to gather enough signatures to place a somewhat different question on the ballot. Lori Klein of the Arizona HomeOwners Protection Effort (AZHOPE) is leading that effort. The initiative petition they are pushing is actually even more restrictive than the recently vetoed bill. Among other things, it would allow property owners to sue municipalities if a zoning change negatively impacts the value of their property.

The issue, and the Governor's veto, are very controversial. Many of the Governor's detractors are painting her as the friend of greedy developers and amoral city governments; as noted above, the bill's detractors see it as a tool to keep cities from redeveloping. Check out the comments on Jon Talton's azcentral.com blog.

How about a compromise? Try this:

1. Don't restrict the use of eminent domain any more than it is currently restricted by law. There are legitimate uses of eminent domain, and there's no reason to restrict those uses. However, add language to ensure that municipalities pay true fair market value for seized property. Disputes to be settled by jury.

2. Instead, restrict what municipalities can do with seized property. Once property is seized, the municipality cannot transfer the property or control of the property to a private entity for 99 years. No selling, giving, leasing, renting, licensing, etc. the property out. Once seized, it must remain under direct city control for 99 years. I see lots of parks and schools in our future.

3. Leave an out. Leave a complicated, difficult way for cities to get around #2. I suggest allowing seized property to be transferable to a private entity for a project if authorized by the passage of a city-wide referendum with the additional restriction that the referendum must also pass in the specific precinct of the proposed project. This little restriction is rooted in an interesting pattern that occurred in a referendum here in Scottsdale a few years ago. The question concerned authorizing the use of eminent domain to clear land around a dead mall (Los Arcos) to give to a developer (Steve Ellman) to put up a hockey arena.

The interesting pattern was that while the referendum passed in all precincts but one, on a precinct-by-precinct basis, the vote split trended closer to 50/50 as you got nearer to the project site, until you reached the precinct that contained the proposed project. Where it thoroughly failed.

This would keep one part of a city, say, the more affluent (and hence more influential) part from imposing something on a less affluent (and less influential) part.

This idea at least has the benefit of giving neither side what they want yet addressing their concerns; the cities don't get to use eminent domain as a reverse Robin Hood operation, taking property from the poor and fencing it to the highest bidder. By the same token, actual slumlords can choose to clean up their properties, to sell them at a fair price, or to take the chance that their property will be seized and turned into a park or something.

The kicker about all this: this is being painted as a Democrat/Republican conflict, when in reality it's a socioeconomic class conflict.

"How's that?" you ask.

Have you ever heard of some high end condos being seized and torn down to make room for a garage, because there just aren't enough good mechanics in town?

Or heard of a mall getting torn down to make way for much-needed low-income housing?

Neither have I.

Kicker2: It sort of pains me to admit this, but on the one, the Reps are closer to being right on the issue (on an ethical basis) than the Dems; stealing from the poor to give to the rich is wrong, and that's how eminent domain is used in AZ cities. If the Repubs weren't so arrogantly ham-handed about the whole thing, this really could have turned into a political hot potato for the Governor. All they had to do was send her a reasonable bill. Instead, they sent her a crap bill that she had no choice but to veto, and anyone who reads the actual bill will agree.

Well, except for the slumlords. :)