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HomeMy WebLinkAbout2008/03/18 Item 4 CITY COUNCIL AGENDA STATEMENT ~!~ CITYOF .~ CHULA VISTA MARCH 18,2008, ItemL SUBMITTED BY: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA OPPOSING STATE PROPOSITION 98 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA SUPPORTING STATE PROPOSITION 99 ERIC CROCKETT, ASSISTANT DIRECTOR REDEVELOPMENT AND HOUSING~ KEN LEE, PRINCIPAL PROJECT COORDINATOR~ .c=..D,.J) LORI ANNE PEOPLES, SENIO DEPUTY CITY CLE~(}J\ CITY MANAGER 4/5THS VOTE: YES D NO ~ ITEM TITLE: REVIEWED BY: SUMMARY At the June 2008 ballot, voters will have the choice between two initiatives on the controversial topic of eminent domain. The Howard Jarvis Taxpayers Association, the California Farm Bureau Federation, and the California Alliance to Protect Private Property Rights gathered signatures to place Proposition 98 on the ballot, which would not only make major changes to the law of eminent domain, but also take on much broader private property rights issues, including rent control, open space conservation, and local land use regulation. Proposition 98 closely resembles Proposition 90, which failed in 2006. To provide voters a simpler and much more straight-forward alternative for homeowner protection, the League of California Cities this year led the formation of Eminent Domain Reform Now, a coalition working to support responsible eminent domain reform. The coalition successfully qualified Proposition 99 for the June 2008 ballot. Proposition 99, entitled the Homeowners Protection Act, would very simply prohibit governments from taking an owner-occupied home to transfer it to a private party. This is consistent with this City's historical policies on the use of eminent domain by the Redevelopment Agency on properties that are both residentially zoned and used for residential purposes. Adoption of the first resolution opposes Proposition 98 and the second supports Proposition 99. ENVIRONMENTAL REVIEW The Environmental Review Coordinator has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a "Project" as defmed under Section 15378 of the State CEQA Guidelines; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is necessary. 4-1 MARCH 18, 2008, Item~ Page 2 of 4 RECOMMENDATION Council adopt the resolutions. BOARDS/COMMISSION RECOMMENDATION Not applicable. DISCUSSION The League of California Cities has asked cities to support their efforts to oppose Proposition 98 and support Proposition 99. The following discussion provides a summary of each proposition. Proposition 98: California Property Owners and Farmland Protection Act In addition to Proposition 98's proposed changes- to eminent domain law, opponents believe that there is a major hidden agenda in the measure's other provisions affecting rent control, open space conservation, and land use regulation. The initiative's major provisions are summarized below. 1. Property mav not be taken and then transferred to a private partv. For over 50 years, State and Federal Courts have held that the use of eminent domain by redevelopment agencies to eliminate conditions of blight is a public use. The initiative would end the use of eminent domain by redevelopment agencies except for public works projects, and would prevent the use by other public agencies in public/private partnerships for facilities. 2. New definition of Just Compensation. Existing law requires the payment of just compensation to the owner of property taken by eminent domain and is defined as "fair market value." A body of well-established law interprets the meaning and allows both public agencies and property owners to be reasonably certain about the value of property to be acquired. The initiative would add a constitutional definition of "just compensation" that would prevail over the settled body of law, possibly resulting in the need to have more frequent recourse to the courts to settle disputes over the meaning of "just compensation." Other changes that the initiative would make are: a. Just compensation would include an award of the property owner's attorney's fees if the jury awards one dollar more than the amount offered by the public agency. It is unclear which offer to purchase this provision refers to. b. Just compensation would include elements not currently recognized such as temporary business losses. Relocation and other business re- establishment costs would also be elevated to constitutional status, thereby perhaps abrogating existing statutes which place limits on the type and amount 4-2 MARCH 18, 2008, Item~ Page 3 of 4 3. Acquiring "immediate possession" of property made more complicated. Under existing law, after depositing with the court the estimated just compensation, a public agency can obtain possession of the property prior to a fmal judgment based on a showing of an overriding need for the condenmor to take possession prior to final judgment. If the property owner withdraws the deposit, he or she waives their right to contest whether the taking is for public use, but may still contest the amount. The initiative changes the balanced approach to prejudgment possession by permitting the property owner to contest both public use and just compensation after withdrawing the deposit. Public agencies would still be at risk of being prohibited from taking the property rather than simply paying more for it. 4. Balance of power between Legislature and Courts shifted. Current law provides that findings made by a public agency in connection with the taking of property by eminent domain are entitled to strong presumptions of validity, and courts will overturn those findings only where the property owner is able to demonstrate a gross abuse of discretion such as bribery or fraud. The initiative would change this balance, providing that a court must exercise its independent judgment and give no deference to the finding of a public agency. The court's inquiry would also not be limited to the administrative record, so the property owner could introduce evidence of value and other matters not before the condemning agency at the time the decision to condenm was made. 5. Governmental Regulations Affecting Price. The initiative would also define a regulation of property that limits the price a private owner could charge another person to purchase, occupy or use his or her real property as a prohibited taking for a private use. This would prohibit rent control ordinances (units as of January 1, 2007 would be grandfathered as long as at least one of the tenants continued to live in the unit) and make unconstitutional inclusionary housing ordinances adopted in many California cornmunities, which require new housing development to include affordable units for low and moderate income buyers or renters. The effect on the inclusionary housing provisions of the Community Redevelopment Law is difficult to predict. Redevelopment agencies might still be able to bargain for the provision of affordable units as a condition of agency assistance, but they would not be able to impose such requirements as a matter oflaw. 6. Limitation on Use of Eminent Domain for Consumption of Natural Resources. The initiative would prohibit the use of eminent domain to "transfer the ownership, occupancy or use of private property... to a public agency for the consumption of natural resources..." This provision can be read to prohibit the use of eminent domain by a city to acquire new drinking water resources, and would also prohibit the use of eminent domain if the public agency would use the property for "the same or substantially similar use as that made by the private owner." It would likely eliminate eminent domain as a tool to acquire conservation and open space easements. 4-3 MARCH 18, 2008, Item~ Page 4 of 4 7. Regulation of Land Use. The initiative requires a public agency to pay "just compensation" when it regulates the use of land, if the regulation transfers an economic benefit from the person who owns the land to another person. Existing law allows public agencies to use their police power to enact regulations governing the use of privately owned real property. These regulations range from traditional zoning to nuisance regulations and include conditions imposed on the new development of property, and most have an economic impact. Some properties will be benefited while others will be burdened, and read literally, this provision would make unconstitutional virtually all regulation of land use unless just compensation is paid. Proposition 99: Homeowners Protection Act The Eminent Domain Reform Now coalition consists of a broad mix of stakeholders, including seniors, homeowners, business, labor, environmentalists, affordable housing advocates, public safety leaders, and local governments. The coalition's intent behind Proposition 99 is to address homeowners' common fears about eminent domain, mainly its use on single-family homes. To address those fears and promote the responsible and appropriate use of eminent domain for "public use," including health and safety, Proposition 99 would prohibit governments from using eminent domain to take a single- family, owner-occupied home (including a condominium) for the purpose of transferring it to another private party (e.g., person, business, association). This policy stance is closely aligned with Chula Vista's local policies, including those contained in its redevelopment plans. The redevelopment plan for the Merged Chula Vista Project Area specifically provides that the Redevelopment Agency is prohibited from using eminent domain on any property that is both residentially zoned and used for residential purposes. DECISION MAKER CONFLICT Staff has reviewed the decisions contemplated by this action and has determined that it is not site specific and consequently the 500 foot rule found in California Code of Regulations section I 8704.2(a)(I) is not applicable to this decision. FISCAL IMPACT No fiscal impact as a result of taking formal action to oppose Proposition 98 or support Proposition 99. ATTACHMENTS A. Summary of California Property Owners and Farmland Protection Act (Prop 98) B. Summary of Homeowners Protection Act (Prop 99) Prepared by: Lori Anne Peoples. Senior Deputy City Clerk, City Manager's Office 4-4 ATTACHMENT A Proposition 98 Government Acquisition, Regulation of Private Property. Constitutional Amendment. BACKGROUND Government Actions to Take Property-"Eminent Domain" Every year, California state and local governments buy hundreds of millions of dollars of property from private owners. Government uses most of this property for purposes such as roads, schools, and public utilities. In other cases, government buys property for different purposes, such as to transfer it to (1) private owners to develop new businesses or (2) nonprofit organizations to provide affordable housing. Most of the time, government buys property from willing sellers. Sometimes, however, property owners do not want to sell their property or do not agree on a sales price. In these cases, California law allows government to take property from a private owner provided that government: . Uses the property for a "public use" (a term that has been broadly interpreted to mean a variety of public purposes). . Pays the property owner "just compensation" (generally, the property's fair market value) and relocation costs (including some business losses). This government power to take property for a public use is called "eminent domain." (The nearby box provides additional information about its use.) Page 1 of 8 4-5 Eminent Domain Challenges. Property owners are not required to accept the amount of compensation government offers. Instead, they may make a counteroffer or challenge Page 2 of 8 4-6 the amount in court. Under the State Constitution, property owners are entitled to have the amount of compensation determined by a jury. While property owners also may challenge government's right to take a property, these challenges are more difficult. In part, this is because courts give significant weight to government's findings and perspectives when ruling on disputes as to whether an eminent domain action is for public use. Programs to Promote Affordable Housing Rent Control. Over a dozen California cities have some form of rent control law. These cities include Los Angeles, San Francisco, Oakland, Berkeley, Santa Monica, and San Jose. In addition, about 100 citi~s and counties have laws limiting the rent mobile home park owners may charge people who lease space in their park. Altogether, about one million California households live in rent-controlled apartments or mobile home parks. While the provisions of these rent control laws vary, they typically restrict the amount of money by which a landlord (or park owner) may increase a tenant's rent each year. If a tenant moves out of a housing unit or mobile home park, property owners may reset rents to market rates. Once the unit or space is rented again, however, rent control laws restrict the rate of future rent increases. Other Housing Programs and Laws. About one-third of California cities and counties have laws referred to as "inclusionary housing." These laws (which can be mandatory or voluntary in nature) have the goal of providing lower-cost housing units in new developments. Mandatory inclusionary laws require developers to construct Page 3 of 8 4-7 affordable housing on part of their land or contribute funds to develop such housing. Voluntary laws offer developers incentives to provide affordable housing. (For example, a city might permit a developer to build an increased number of housing units if some of them are affordable to lower-income households.) In addition, many California cities have ordinances requiring apartment owners to provide relocation benefits to tenants if they convert their property into condominiums. PROPOSAL This measure amends the State Constitution to (1) constrain state and local governments' authority to take private property and (2) phase out rent control. The measure also might constrain government's authority to implement certain other programs and laws, such as mandatory inclusionary housing programs and tenant relocation benefits. The measure's provisions apply to all governmental agencies. Taking Property The measure prohibits government from taking ownership of property to transfer it to a private party-such as a person, business, or nonprofit organization. In addition, government could not take property to use it for (1) a purpose substantially similar to how the private owner used it (such as public operation of a water or electricity delivery system formerly owned by a private company) or (2) the purpose of consuming its natural resources (such as its oil or minerals). These restrictions on government's authority to take property also would apply to cases when government transfers the right to use or occupy property (but does not take ownership of it). None Page 4 of 8 4-8 of these restrictions would apply, however, if government was addressing a public nuisance or criminal activity or as part of a state of emergency declared by the Governor. Under the measure, government could continue to take property for facilities that it would own and use, such as new schools, roads, parks, and public facilities. Government could not take property for one purpose, however, and then use it for a different purpose unless it offered to sell the property back to its previous owner. Property Owner Challenges. If a property owner challenged government's authority to use eminent domain, the measure directs the court to exercise its independent judgment and not defer to the findings of the government agency. In addition, property owners could challenge government's right to take the property even if they accepted funds that government deposited as part of an accelerated eminent domain action. Property Owner Compensation. The measure contains provisions that would increase the amount of compensation provided to property owners. For example, property owners would be entitled to reimbursement for all business relocation costs, which could exceed the maximum amounts specified under current law. In addition, property owners would be entitled to compensation for their attorney costs if the property owner was successful in an eminent domain challenge. Page 5 of 8 4-9 Rent Control The measure generally prohibits government from limiting the price property owners may charge others to purchase, occupy, or use their land or buildings. This provision would affect local rent control measures. Specifically, government could not enact new rent control measures, and any rent control measure enacted after January 1, 2007 would end. Other rent control measures (those enacted before January 1, 2007) would be phased out on a unit-by-unit basis after an apartment unit or mobile home park space is vacated. Once a tenant left an apartment or mobile home space, property owners could charge market rate rents, and that apartment unit or mobile home space would not be subject to rent control again. Other Government Laws and Programs The measure appears to limit government's authority to impose restrictions on the "ownership, occupancy, or use of property" if the restrictions were imposed "in order to transfer an economic benefit" from one property owner to other private persons. The range of government laws and programs that would be affected by these provisions is not clear and would be determined by the courts. Given the wording of the measure, however, programs such as mandatory inclusionary housing and condominium conversion relocation benefits might be prohibited. Related Measure on Ballot. This ballot contains two measures related to eminent domain: Proposition 98 (this measure) and Proposition 99. If this measure were Page 6 of 8 4-10 approved by more votes than Proposition 99, the provisions of Proposition 99 probably would not take effect. FISCAL EFFECTS Eminent Domain Changes Much of the property state and local government acquires is bought from willing sellers or is taken by eminent domain for purposes that would still be allowed under the measure. In these cases, government could continue to acquire these properties, but might need to pay somewhat more for them. This is because the measure increases the amount of compensation provided for properties taken by eminent domain and willing sellers are likely to demand similar increased amounts. In some cases, the measure would prevent government from taking property by eminent domain. This reduced ability to take property could apply to many government plans for redevelopment, affordable housing, and public ownership of water or electric utility services. As a result of this reduced authority to take property, government might (1) buy fewer properties and have lower costs or (2) offer property owners more to purchase their properties and thus have higher costs. The net fiscal effect of these potential changes in the number and price of properties acquired cannot be determined. Overall, we estimate that many governments would have net increased costs to acquire property, but that the net statewide fiscal effect probably would not be significant. Page 7 of 8 4-11 Other Changes It is difficult to estimate the fiscal impact of the measure's phase out of rent control and limitation of other programs that transfer economic benefits from property owners to private parties. In response to these provisions, governments might choose to change their policies in ways that do not increase their costs. For example, a government might repeal a mandatory inclusionary housing ordinance and not enact a replacement policy, or repeal the ordinance and enact land-use regulations that encourage the construction of lower-cost housing. In other cases, conforming to the measure's provisions could result in new costs. For example, a government could respond to the elimination of rent control by creating publicly funded programs to subsidize affordable housing. Given the uncertainty regarding some of the measure's provisions, some governments might be unaware that their policies conflicted with the measure's provisions and be required to pay damages to property owners. The fiscal effect on state and local governments associated with these changes in rent control and other policies is not possible to determine, but there probably would be increased costs to many governments. The net statewide fiscal effect, however, probably would not be significant. Page 8 of 8 4-12 ATTACHMENT B Proposition 99 Eminent Domain. Acquisition of Owner-Occupied Residence. Constitutional Amendment. Background California state and local governments frequently acquire private property to build public facilities (such as roads, parks, and schools) or to promote public objectives (such as economic development and affordable housing). Most of the time, government buys property from willing sellers. Sometimes, however, property owners do not want to sell their property or do not agree on a sales price. In these cases, California law allows government to take property from a private owner provided that government: . Uses the property for a "public use" (a term that has been broadly interpreted to mean a variety of public purposes). . Pays the property owner "just compensation" (generally, the property's fair market value) and relocation costs (including certain business losses). This government power to take property for a public use is called "eminent domain." The nearby box provides additional information regarding the terms public use, just compensation, and relocation costs. Page 1 of 4 4-13 Proposal This constitutional amendment limits state and local government's use of eminent domain in certain circumstances. Specifically, the measure prohibits government from using eminent domain to take a single-family home (including a condominium) for the purpose of transferring it to another private party (such as a person, business, or association). This prohibition, however, would not apply if government was taking the home to: Page 2 of 4 4-14 . Protect public health and safety. . Prevent serious, repeated criminal activity. . Respond to an emergency. . Remedy environmental contamination that posed a threat to public health and safety. . Use the property for a public work, such as a toll road or airport operated by a private party. In addition, the prohibition would not apply if the property owner did not live in the home or had lived there for less than a year. Related Measure on Ballot. This ballot contains two measures related to eminent domain: Proposition 99 (this measure) and Proposition 98. If this measure were approved by more votes than Proposition 98, this measure provides that the provisions of Proposition 98 would not take effect. Fiscal Effects Under current law and practice, government seldom uses eminent domain to take single-family homes. Even when it does so, the acquisition often is for a purpose that is permitted under the measure (such as construction of a road or school). Accordingly, this measure would not change significantly current government land acquisition practices. Page 3 of 4 4-15 In a very limited number of cases, however, this measure might result in government: · Savings-because government could not acquire a home that the owner did not wish to sell. · Costs-because government might pay more to buy a home than would have been the case if it could have taken the home using eminent domain. The net fiscal effect of such actions would not be significant. Page 4 of 4 4-16 RESOLUTION NO. 2008- - RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA OPPOSING STATE PROPOSITION 98 WHEREAS, a constitutional amendment ballot measure, Proposition 98, will appear on California's June 2008 ballot; and WHEREAS, Proposition 98 proponents want voters to believe the initiative is about eminent domain, but in fact the measure contains hidden agendas and flawed language which will eliminate rent control and other renter protections, threaten development of public water proj ects, stymie local land use planning and impair our ability to protect the environment; and WHEREAS, the majority of the funding to qualifY this measure comes from wealthy apartment and mobile home park owners who are attempting to trick voters into abolishing rent control and other renter protections, thereby jeopardizing an important affordable housing tool to protect working families, seniors, single-parent homes, veterans and others; and WHEREAS, provisions in the initiative would also preclude the use of eminent domain to acquire land or water to develop public water projects that are needed to provide our residents, businesses, farmers and economy with a reliable and safe supply of water; and WHEREAS, Proposition 98 is opposed by the Association of California Water Agencies and the Western Growers Association, who warn the initiative will impair water projects to protect water quality and supply; and WHEREAS, language in the initiative will also prohibit the passage of regulations, ordinances, land use and other zoning laws that enable local governments to plan and protect communities; and WHEREAS, the California Police Chiefs Association opposes the measure because it threatens their ability to keep communities and the public safe; and WHEREAS, leading environmental groups warn provisions in the measure would impair our ability to enact environmental protections such as laws that control greenhouse gas emissions, preserve open space, protect coastal areas, and regulate development; and WHEREAS, the No on Proposition 98 campaign is represented by the League of California Cities, California State Association of Counties, League of California Homeowners, California League of Conservation Voters, California Alliance for Retired Americans and other leading state and local associations who oppose Proposition 98. NOW, THEREFORE, BE IT RESOLVED BY THE City Council of the City ofChula Vista that we hereby oppose Proposition 98 on the June 2008 ballot. 4-17 Resolution No. 2008- Page 2 BE IT FURTHER RESOLVED that we authorize the use of our name by the No on Proposition 98 campaign in opposition to Proposition 98, and direct staff to fax a copy of this adopted resolution to 916.442.3510. Submitted by Approved as to form by Ann Moore City Clerk David R. Garcia City Manager 4-18 RESOLUTION NO. 2008- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA IN SUPPORT OF STATE PROPOSITION 99 WHEREAS, in June of 2005 the US Supreme Court ruled in Kelo v. New London that government could take a home through eminent domain to give to a private developer; and WHEREAS, since that decision more than 40 states have reformed their eminent domain laws; and WHEREAS, California has failed to place a prohibition on the use of eminent domain to take homes for private development; and WHEREAS, Proposition 99, which will be on the June 2008 ballot, will prohibit government from using eminent domain to take an owner-occupied home to transfer to another private party; and WHEREAS, the protections in Proposition 99 directly address the issues in the Kelo decision and the measure does not contain any unrelated provisions that will result in unintended, harmful consequences for California; and WHEREAS, the League of California Homeowners supports this measure because it will provide ironclad protections for California homeowners; and WHEREAS, the Yes on Proposition 99 campaign is represented by a broad based coalition, including the League of California Cities, California States Association of Counties, League of California Homeowners, California League of Conservation Voters, California Alliance for Retired Americans and other leading state and local associations who support Proposition 99; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City ofChula Vista that we hereby support Proposition 99. BE IT FURTHER RESOLVED that we authorize the use of our name by the Yes on Proposition 99 campaign in support of Proposition 99, and hereby direct staff to fax a copy of this adopted resolution to 916.442.3510. Submitted by Approved as to form by David R. Garcia City Manager Ann Moore City Attorney 4-19