COUNTY OF SAN MATEO

Inter-Departmental Correspondence

County Manager’s Office

 

DATE:

May 14, 2008

BOARD MEETING DATE:

May 20, 2008

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

 

TO:

Honorable Board of Supervisors

FROM:

John L. Maltbie, County Manager

SUBJECT:

County Manager’s Report #5

 

A.

Resolution in opposition to Proposition 98, the California Property Owners and Farmland Protection Act

 

RECOMMENDATION:

Adopt a resolution in opposition to Proposition 98, the California Property Owners and Farmland Protection Act

 

VISION ALIGNMENT:

Commitment: Leaders work together across boundaries to preserver and enhance our quality of life.

Goal(s): 23—Leaders throughout the County provide the impetus for broader regional solutions in land use, housing, child care, education, health and transportation.

 

BACKGROUND:

In 2005, the Supreme Court ruled that federal, state and local governments may define “public use” to include economic benefit, which would allow governments to employ eminent domain for the purposes of economic development.

 

In response, California voters considered Proposition 90 in November 2006. That proposition would have required local governments to pay property owners for “substantial economic losses” from the taking or damage for public purposes where “damage” is a government action to private property that includes, for example, downzoning, elimination of access to the private property and limitations on the use of private airspace. Your Board opposed Proposition 90, which was defeated by voters.

 

A State Constitutional amendment, Proposition 98 would limit governments’ ability to take private property. In addition, it would phase out rent control. Proposition 98 would prohibit governments from taking private property to transfer it to another private party. It would also prohibit the taking of private property for its natural resources or a purpose substantially similar to the private purpose. Proposition 98 would also increase the amount of compensation a landowner may receive to include business relocation costs.

 

In addition to restrictions on the use of eminent domain, Proposition 98 would prohibit governments from limiting the price property owners may charge to purchase or use the owner’s property. The Proposition would prohibit governments from imposing rent control laws and end rent control laws enacted after 2007. For rent control laws enacted before 2007, Proposition 98 would establish a unit-by-unit phase out of rent control. Rent controlled units would remain subject to local rent control laws for as long as they are continuously occupied. As a unit is vacated, landowners would be able to charge rents without such restrictions. In San Mateo County, the City of East Palo Alto has rent control restriction.

 

Proposition 98 would also expand property owners’ abilities to collect attorney’s fees and other legal expenses associated with challenging government efforts to take their property. Under current law, the property owner may collect such costs only when a court determines the final offer was unreasonable and that the owner’s final demand was reasonable. Proposition 98 would allow collection of such costs when a property owner collects an amount greater than that offered by the government entity.

 

DISCUSSION:

Opponents to Proposition 98 argue that Proposition 98’s primary purpose is to eliminate rent control, noting that more than 80 percent of funding to gather ballot-qualifying signatures came from apartment owners and mobile home park owners. Opponents fear that if Proposition 98 is successful it will reduce affordable housing options.

 

Proposition 98 opponents also argue that Proposition 98’s restriction that private property may not be taken or damaged for another private use would have far reaching impact by enabling critics of local (private) developments to sue by arguing that their private property has been damaged by government’s approval of the development. Local restrictions on development (for purposes such as farmland protections) may also be subject to Proposition 98. While it is unclear whether Proposition 98 can be read this broadly, opponents argue that litigation could prevent development and economic growth until such issues are resolved—possibly taking years.

 

Opponents also fear that Proposition 98 could restrict California’s ability to meet its water needs. By prohibiting the taking of private property for consumption of natural resources, Proposition 98 could prevent the use of eminent domain for public water projects since water could be considered a natural resource.

 
 

FISCAL IMPACT:

Unknown.

 

B.

Resolution in support of Proposition 99, the Homeowners and Private Property Protection Act

 

RECOMMENDATION:

Adopt a resolution in support of Proposition 99, the Homeowners and Private Property Protection Act

 

VISION ALIGNMENT:

Commitment: Leaders work together across boundaries to preserver and enhance our quality of life.

Goal(s): 23—Leaders throughout the County provide the impetus for broader regional solutions in land use, housing, child care, education, health and transportation.

 

BACKGROUND:

Sponsored by the League of California Cities and the California State Association of Counties, Proposition 99 is s measure that competes with Proposition 98.

 

Proposition 99 would provide fewer restrictions on the use of eminent domain. This proposition would prohibit the use of eminent domain on owner-occupied, residences for the purpose of transferring such property to another private party. Proposition 99’s eminent domain prohibition would not apply in a number of instances including acquiring private property for public work or improvement. In addition, it would restrict the eminent domain prohibition to owner-occupied residences that are the owner’s/owner’ principal place of residence for at least one year.

 

Proposition 98 and Proposition 99 will appear on the June 3, 2008 ballot. If Proposition 99 receives more votes than Proposition 98, Proposition 98 will not take effect. If Proposition 98 is approved by more votes than Proposition 99, it is unlikely that Proposition 99 will take effect.

 

DISCUSSION:

Critics and proponents agree that Proposition 99 offers far fewer restrictions on taking private property than Proposition 98. Critics of Proposition 99 argue that the exemptions in Proposition 99 make it virtually meaningless. In contrast, proponents believe that Proposition 99 addresses concerns regarding the Kelo decision without the additional restrictions in Proposition 98.

 

FISCAL IMPACT:

Unknown.