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Court Ruling Fuels Dispute in West Over Eminent Domain
Initiatives Challenge Land-Use Regulations

By Blaine Harden and Juliet Eilperin
Washington Post Staff Writers
Monday, October 2, 2006

SEATTLE -- Libertarians and land developers have found populist fodder in a contentious Supreme Court decision from last year that favors eminent domain over private property.

This fall, they are trying to harness anger over the ruling in an effort to pass state initiatives in the West and federal legislation that could unravel a long-standing fabric of state and local land-use regulations. Among other things, the rules control growth, limit sprawl, ensure open space and protect the environment.

The property-rights movement, as it is known, has a major new benefactor -- Howard Rich, a wealthy libertarian real estate investor from Manhattan. He has spent millions -- estimates run as high as $11 million -- to support initiatives that will appear on ballots throughout much of the West.

The initiatives -- and legislation approved Friday in the House -- have alarmed many city and state officials, along with environmental organizations, budget watchdog groups and smart-growth advocates. They complain about "bait-and-switch" tactics.

"They bait you with eminent domain, but you end up voting to destroy all land-use regulation," said Elaine Clegg, a nonpartisan member of the city council in Boise, Idaho.

Following the lead of an Oregon initiative that in 2004 derailed the nation's strongest laws against sprawl, measures this November aim to do much the same thing in Idaho, Arizona, California and Washington. They would compel state and local governments to pay cash to property owners when land-use rules, such as zoning regulations, reduce the value of their land. Some of the measures say that if government can't pay up, owners can develop their land as they see fit.

In Oregon, there is no money to pay claims that total $5.6 billion, so land-use rules are being waived. In Washington, passage of a "pay-or-waive" initiative could cost state taxpayers $7 billion to $8 billion in the next few years, according to studies by the state and the University of Washington. In California, where there is no provision to waive payment, Proposition 90 has aroused opposition from staunchly conservative groups such as the California Taxpayers Association, which is concerned that the initiative could cost the state billions of dollars, triggering tax increases and slow growth.

The federal bill, which was approved in the House by a vote of 231 to 181, would revamp land-use regulation nationwide, allowing developers and property owners to challenge local and state rulings in federal court, rather than in state court.

The National Association of Home Builders has been pushing the measure for years, but the Supreme Court's eminent-domain decision finally "brought the bill back into the limelight," said Jerry Howard, the association's chief executive.

The bill's author, Rep. Steve Chabot (R-Ohio), who chairs the Judiciary subcommittee on the Constitution, said property-rights disputes that can drag on for years deserve speedy resolution in federal court.

"The Fifth Amendment says you can't take a person's property without due process," he said, comparing property rights with freedom of speech and freedom of religion.

Opponents of the bill, including 36 attorneys general and a slew of environmental advocates, say the measure will undermine state and local governments' ability to oversee growth and preserve open space.

In Idaho, a measure called Proposition 2 would halt eminent-domain seizures of the kind allowed by the Supreme Court in 2005 in Kelo v. New London . That ruling upheld the right of local governments to condemn private property and then hand it over to someone else for commercial development. Since Kelo , 26 states have passed laws that ban the use of eminent domain for economic development purposes.

But the Idaho initiative, as with others in the West, is about much more than just eminent domain. It would require state and local governments to compensate landowners for regulations that restrict what they can do with their land.

About three-fourths of the more than $330,000 spent to put Proposition 2 on the ballot came from groups funded by Rich, in a pattern of spending that has been repeated in many Western states.

Groups bankrolled by Rich have this year spent about $11 million in 12 states in support of measures to restrict land-use planning, cap state spending or limit judicial power, according to state campaign finance reports compiled by the Ballot Initiative Strategy Center, a Washington-based group that is supported by labor.

Rich was not available to comment on his spending or the goals of his property-rights groups.

John Tillman, president of one of those groups, Americans for Limited Government, declined in an e-mail to comment on the amount of Rich's spending, saying that campaign finance reports "speak for themselves." He did not dispute the $11 million figure.

Tillman did note that the Supreme Court decision in Kelo has alarmed the public, putting "everyone on notice that property rights are on shaky ground and that the time to act is now."

In some states, grass-roots opposition to land-use rules existed well before Kelo and before Rich began spending money. For the past 15 years in Washington state, the Washington Farm Bureau has fought laws that limit what some farmers can do with their land in heavily populated places such as King County, which includes Seattle.

In Oregon, which had been a national leader in land-use planning, the consequences of rolling back the rules are becoming clear. At last count, there were 3,038 claims by property owners involving more than 173,000 acres, according to a tally kept by Portland State University. Of the 2,630 claims that have been decided, 90 percent have gone in favor of landowners, with state and local governments waiving land-use rules. Most of the claims come from owners of what had been protected farm and forest land bordering fast-growing urban areas.

"The agenda behind these initiatives is to make it so expensive for local and state governments to regulate land use that they can hardly function at all," said John Echeverria, executive director of the Georgetown Environmental Law and Policy Institute.

In recent weeks, courts in Nevada and Montana have knocked some initiatives off ballots. The Nevada ruling was on technical grounds, but a state judge in Great Falls, Mont., found "a pervasive and general pattern of fraud" in the gathering of signatures for three ballot measures aimed at reining in government power.

"A number of paid out-of-state signature gatherers used bait-and-switch tactics to fraudulently induce countless Montanans to sign petitions other than the petitions they thought they were signing," wrote Judge Dirk M. Sandefur.

The ruling has been appealed to the Montana Supreme Court. Nearly all of the money for signature gatherers came from Montanans in Action, which declines to reveal its donors.

Montana Gov. Brian Schweitzer (D) has said that Rich is bankrolling the measures and has challenged him to debate their merits. Rich has not responded to this request nor to a similar debate offer from Gov. Ted Kulongoski (D) of Oregon, where Rich's money has been instrumental in putting a spending-cap initiative on the ballot.

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