Kelo Backlash, Cont'd
As an unintended consequences of Proposition 13, California city governments depend heavily on sales taxes, rather than property taxes. That gives them a strong incentive to favor retailers over other businesses and over housing (especially new homes) in zoning. It also creates a serious temptation to use eminent domain to help lure retailers. So California is an interesting place to watch the Kelo backlash building.
This Modesto Bee article reports on the left-right congressional alliance against the property-taking establishment:
Conservative Tracy Rep. Richard Pombo has joined some of the House of Representatives' most liberal firebrands in an effort to curb state and local eminent domain powers.
The strange-bedfellows alliance pits valley ranchers and property owners against cities and counties....
Pombo and at least 40 other House members are backing legislation meant to deter state and local governments from using the eminent domain powers extended by the court. The bill would not overturn the Kelo decision. Instead, the bill would cut off federal funds to any state or local agency that uses eminent domain for private commercial development.
Meanwhile in the San Diego area, local shenanigans are feeding the backlash, as the Union Tribune editorializes:
First came a report on the San Diego Model School Development Agency's push to seize and demolish 188 homes in the thriving City Heights neighborhood to build up to 509 town houses, condos and apartments more to its liking. The 30-acre site is far from the decaying neighborhood normally targeted in redevelopment, but blithe agency bureaucrats from the Soviet school of central planning--knowing they could call the area "blighted" if they chose--didn't care.
Then came yesterday's jaw-dropping story about National City's plan to use its powers of eminent domain to force the Daily family to sell a parcel the family leases to the Mossy family for one of its thriving car dealerships. After the two sides couldn't agree on a sales price, Mossy representatives made plain they would move their Nissan dealership--and the $1 million in annual sales and property taxes it generates for National City--unless the city helped close the deal. The City Council promptly caved in to Mossy's unsavory hardball tactics and, in its role as the city redevelopment board, began looking into seizing the land--after a mysterious epiphany in which members suddenly realized the site suffered from a heretofore undetected case of "visual blight."
What these stories have in common is a challenge to the argument made by eminent domain advocates: that California already protects property from Kelo-type seizures by requiring cities to find an area "blighted" first. Blight is a bit too easy to declare and, besides, one person's blight is another person's neighborhood. If an area is truly blighted, one might think property would be cheap enough to acquire profitably without local government's help. But then, of course, a developer might do something like build apartment buildings that don't generate big local taxes.