Owners Stand to Gain From Property-Use Bills

If conservative lawmakers in Washington and Sacramento have their way, property owners in the San Fernando Valley and Ventura County will probably have fewer government regulations to deal with and a better chance of getting compensated when the government limits use of their properties. But environmentalists and growth-control advocates worry that the proposed new laws protecting private property rights will make it easier for polluters to pollute and for developers to build without concern for their neighbors or for nature. The U.S. Senate Judiciary Committee in December voted 10 to 7 in favor of the Omnibus Property Rights Act of 1995, which would compensate private property owners if the value of their property is diminished by government action. Senate Bill 605 would compensate owners whose property has been physically taken for public use or who can prove they are being deprived of economic benefits because of requirements to obtain a permit. The affected property must be diminished in value by 33% or more.

The 5th Amendment to the Constitution guarantees that private property shall not be taken for public use without just compensation, but courts have been reluctant to say just how much of the property must be taken in order for the property owner to be compensated. The Senate will soon consider setting a standard of 33% or more.

Owners would be compensated the difference between fair market value of the affected property before action by a government agency and its value after an agency action. The government is not required to pay compensation in cases where the property is a nuisance.

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Property owners would get six years to make a claim under the proposed bill. Also, federal agency representatives would no longer be allowed to enter private property without the owner’s written consent, and the agency would have to share with the owner any information collected during the visits. Under current law, an agency representative may under certain circumstances enter private property without advance permission to search for endangered species or test soil.

The House of Representatives last year passed its own property bill in the form of House Resolution 925, the Private Property Protection Act of 1995. This bill requires the federal government to compensate an owner whose property is diminished by 20% or more because of federal regulatory action. If the diminution in value is more than 50%, owners can force the government to buy their property at fair market value.

The House bill, however, applies only to “takings� under the federal wetlands rules, the Endangered Species Act and the Food Security Act. The Senate bill covers government actions under all federal laws.

The California Senate is considering Senate Bill 635, the Property and Homeowner Protection Act. This bill would require the state to compensate property owners for takings in the form of government regulations and restrictions on property use.

Any private property purchased by the state would also have to be offset by the state’s sale of property of equal or greater value. S.B. 635 would also require county assessors to reassess properties whose value has been negatively affected by certain regulatory actions.

President Clinton has threatened to veto the federal proposals and Democrats in the state Senate are considered likely to block passage of S.B. 635 in its current form. Passage of some form of federal and state property-related bills, though, seems more likely than ever.

“These bills are good news for property owners and bad news for environmentalists,� said William Fulton, editor of the California Planning and Development Report in Ventura. “The U.S. Supreme Court has been reluctant to set a standard for takings based on a specific percentage of the property being taken. The chance that lawmakers will impose such standards is getting stronger.�

The federal legislation could affect many parcels with wetlands or endangered species, Fulton said--particularly large undeveloped portions of Ventura County, the Antelope Valley and the Agoura and Calabasas areas. “There are a lot of species in these areas listed by the federal government as endangered,� Fulton said. State legislation would have an even bigger local impact, he predicted.

“Legislation to protect property rights is long overdue,� said Gideon Kanner, professor emeritus at Loyola Law School in Los Angeles and a resident of the San Fernando Valley. “We’ve had decades of regulators telling us that their regulations really aren’t that burdensome when in fact they’re choking the economy.�

Nancie Marzulla, president of Washington, D.C.-based Defenders of Property Rights, agrees with Kanner. “In today’s world, property owners are under siege,� Marzulla said. “The government is supposed to be a government of limited powers, but it’s not. Property owners are being singled out for mistreatment by the federal government.�

But many environmental advocates and supporters of comprehensive land-use planning view the federal and state proposals as disastrous. “It would do an incredible amount of damage to land-use planning,� said Linda Barr, legislative representative for the Sierra Club California in Sacramento.

“Property law in the United States has never been interpreted in a way that allows people to do whatever they want with their property,� Barr said. Besides, she added, “there’s no proof that current law isn’t protecting private property rights.�

The issue of protecting private property owners has become a clearly partisan issue, Barr said. “The conservative, right-wing agenda would have a chilling effect on the ability of government to regulate at all.�

Ron Galperin is a real estate attorney with Wolf, Rifkin & Shapiro in West Los Angeles.