JMBM Development Rights: In California the Magic Number is 99!

Prop. 99

California voters have spoken and the state now has a new law on eminent domain. On June 3rd, California voters overwhelmingly approved Proposition 99, while sending the rival Proposition 98, down to defeat. The genesis of both initiatives was the landmark decision in the case of Kelo v. City of New London. That decision upheld the right of government to take private property via eminent domain and turn it over to a private developer as long as the taking is for a public use. In 2006, spurred by objections to Kelo and general eminent domain complaints, proponents of restrictions on the process placed Proposition 90 on the statewide ballot. Proposition 90 failed. Undaunted, proponents continued their quest to limit the use of eminent domain. This year voters were faced with not one but two competing propositions, 98 and 99, each aimed at changing the application of eminent domain. The propositions were quite different, however. Proposition 99 will make minor changes in the use of eminent domain, while Proposition 98 would have instituted many of the sweeping changes that Proposition 90 sought.

Proposition 99 Approved

Voters saw Proposition 99 as more directly addressing the concerns brought about by the Kelo decision without unnecessarily undercutting the use of eminent domain. Proposition 99 zeroes in on a central complaint of Kelo; namely, that government may take a private residence and turn the property over to a private developer. Proposition 99 prohibits the use of eminent domain to acquire an owner-occupied single-family home for the purpose of turning it over to another private party. This prohibition would not apply if the property were to be used for a “public work or improvement.” It further requires a home owner to have lived in the residence for at least a year. The new law will not apply to eminent domain actions initiated by governmental entities within 180 days after June 3rd.

Benjamin M. Reznik is chairman of the Government, Land Use, Environment & Energy Department at JMBM. Contact him at BMR@jmbm.com.