Third-World Property Rights in California

California is well-known for its high taxes, high deficits, never-ending regulations, its coddled government employees, its poor schools despite spending twice the national average per student, its building restrictions and high property costs, its high level of domestic out-migration to other states, and its third-world property rights.  California is one of the states that still allows governments to seize private property for private use virtually without restriction.  National outrage following the Supreme Court decision to allow New London, Connecticut to seize the Kelo home and neighborhood for proposed private use brought reforms in many states and local governments to reign in such abuse of property rights recognized in our Constitution.  The land seized from its rightful owners in the Kelo case is now a vacant wasteland.  Similar vacant wastelands have resulted in troubled California owing to similar eminent domain abuse of private property for private, connected company gain.

Third-world property rights are one of the worst impediments to economic growth and the standard of living in third-world countries.  California, with all its woes, has opted for property rights uncertainty to replicate those destructive effects upon ownership and investment right here in our most populated state.  Tim Cavanaugh gave some examples at reason.com:

But the acres of south Los Angeles wasteland generated by the Community Redevelopment Agency of Los Angeles (CRA/LA), the state’s largest and wealthiest RDA, are a grim testament to failure. The agency’s Normandie 5 Redevelopment Project has generated zero development. Its 107-acre Watts Project area, which has been in effect since 1968, boasts nothing but a Food 4 Less that hardly required government help to come into being. The massive $163 million Marlton Square project has stagnated, unbuilt, for nearly 20 years as a shady developer with friends in City Hall looted taxpayer funds. The two-block project area at the corner of Vermont and Manchester Avenues is a vacant lot. So is the long-fallow Central/Slauson project, where the CRA used eminent domain to shut down a metal works that was the only functioning business in the area.

 He also notes that the people attracted to such government property seizure schemes are not the best people:

Maybe the most important factor is the tendency of public-private partnerships to attract the worst elements of society: union goons, neighborhood activists, reverends, public-trough developers, political appointees, city planners, and so on. The Marlton Square project came close to breaking ground in 1999 under the legendary Lakers point guard and successful developer Magic Johnson—until itinerant local politician Mark Ridley-Thomas forced Magic out and turned the project over to a developer with a history of bouncing checks and cheating on his taxes, who went on to make millions of city dollars vanish before going bankrupt.

One of the more notable characteristics of these ignoble schemes is that they usually victimize the poor or the lower middle class for the comfort and profit of unscrupulous well-off people with good connections to government.  Fortunately, these would-be victims have a resolute champion in the Institute for Justice, which is making a point of becoming a nemesis for such low-life dispossession in the rascal-ridden state of California.  An example of the work the Institute for Justice does is its defense of a community youth athletic center against the out-of-control use of eminent domain by National City near San Diego.  A cavalier declaration of blight has been issued to 700 properties so that the city can exercise eminent domain over any of the properties over the next ten-year period.  The property owners must successfully fight off the blight rulings within a limited time to save their property from some potential exercise of the eminent domain claim in later years.  This means considerable expense and effort to prevent the loss of their property which may or may not happen.  This arrangement is a most cunning way to cause many property owners to fail to get the blight ruling overturned, especially when they are people of limited financial resources.  This is a plague upon the unwealthy for the future benefit of unscrupulous wealthy developers.

The Institute for Justice and some brave would-be victims have something to say about that however:



You can read more about this worthy case here.  Please consider becoming a supporter of the Institute for Justice while you are there.

Utah Challenges Federal Land Ownership

Utah Republican Gov. Gary Herbert signed a bill on 27 March 2010 authorizing Utah to file eminent domain proceedings against federal land that limits access to state land that may be used for energy development.  The federal government holds an outrageous portion of Utah, as it does of most Rocky Mountain and West Coast states.  In the case of Utah, the federal government holds 57.4% of the state and that land is generally used not at all or very unproductively.  This fact considerably constrains the income earning ability of the people of many of these western states.  It also reduces our energy supply, intelligent forestry, mineral extraction, ranching, and who knows what other productive uses of this forever fallow land.  In a time of recession and when Washington is controlled by people of a very different political persuasion, this particularly rankles.

There is virtually no chance that this act by Utah will succeed in the courts.  The courts have ruled that the Constitution grants the federal government sovereignty over state lands that it acquires.  This Utah attempt to condemn federal land is an exercise in frustration, but as such, it is significant.  The Governor has said he will first try to negotiate access to state lands across federal lands before going to court.  He hopes the eminent domain authorization will at least get the federal government's attention.

The Obama administration announcement that they are declaring the polar bear an endangered species has angered state officials in Alaska.  The polar bear population has in fact not been in decline, so this is purely an act of environmental political correctness on the part of the Obama administration.  This and other federal interferences are preventing the drilling of oil and gas in many areas in Alaska.

In the late 1970s, the Sagebrush Rebellion attempted to get the federal government to reduce its land holdings in the West.  Anger rose during the Clinton years, as the federal government cut back on logging, mining, and ranching on federal lands.  George W. Bush opened the lands for more use and the anger receded.  After Obama took over, his Interior Secretary canceled 77 drilling leases in Utah in February.  The Utah legislature, hard pressed for tax revenues, as most states are, had been hoping to use tax revenue on leases of state land and income of energy-producing companies to help cover education costs.

Heidi McIntosh, associate director of the Southern Utah Wilderness Alliance, chortled that the state was just frustrated that the federal government owned land that blocked the development of state land and that the state could do nothing about it.  They probably cannot, but the Sagebrush Rebellion is being given new life.

Kelo Eminent Domain Taking Site Abandoned

Suzette Kelo and her neighbors once had homes on the site in New London, Connecticut, known as Fort Trumbull, until the city of New London used eminent domain to take their neighborhood for the benefit of Pfizer, which had a nearby research facility.  Suzette Kelo, with the help of the Institute for Justice, took the case to the Supreme Court.  They argued that eminent domain was for public use, not the private benefit of a company such as Pfizer.

Five of the Supreme Court justices thought that whatever the city of New London thought benefited that government, even if it was pleasing a private company, was adequately definable as public use.  The precedent was set for state and local, and presumably the federal, governments to take land and property for any purpose they had a whim to do so for.  Indeed, despite the unpopularity of this kind of eminent domain, more and more such takings have been occurring since the Supreme Court ruling in favor of this tyranny.

The land once occupied by the homes of Suzette Kelo and her neighbors is now a wasteland.  Pfizer, according to the Hartford Courant, is shutting down its New London research and development headquarters and transferring most of the 1,400 people who work there to Groton, Connecticut.  Pfizer is looking to sell or lease its New London facilities.  This move results from a recent merger with Wyeth and a decision to reduce their combined research budget by 35%.  There is no need for so much innovation now that ObamaCare is on the horizon, with its intolerance for research and innovation in medical procedures and in drug development.  Most of the rest of the developed world is already intolerant of innovation with their socialized medicine schemes.

The city of New London is left now without the tax base provided by the 1400 Pfizer workers and without Suzette Kelo's neighborhood.  The brilliant central planners have served the taxpayers up a much smaller tax base and lots of vacant, undeveloped land.  Pfizer had initially built the facility in New London after buying a 24 acre lot from the city for $10 and being given tax breaks on top of that.  Then Pfizer complained that the Fort Trumbull section of town near them was not as up-scale as Pfizer would like its neighborhood to be.  The New London Development Corporation, headed by a Pfizer executive's wife and with a Pfizer vice president on its board, moved to seize the Fort Trumbull area.  That Development Corp. wanted up-scale condos and a high-rise hotel built there.  That has not happened over these last several years, but Pfizer should be able to sell its 24 acres of land for much more than $10!  Pfizer sure did a great job of taking New London!

Sometimes those who do evil things to others in order to please evil people, come to feel the brunt of evil on their own heads.  It is rather delicious to see.  Though I am sure there are some New London residents who did not deserve to share in the consequences.