June 3, 2008 Ballot Prop. 98

Yes votes: 1,675,213 (38.4%)

No votes: 2,677,456 (61.6%)

Proposition 98 has two chief components which would amend the state constitution. The first component would place new limitations on state and local governments right to seize private property. The 2nd component would eliminate rent control in California. In addition, the measure contains language which could restrain the government from housing and tenant benefits laws.

The Library's Hot Topic on Proposition 77 provides an overview of the measure and other reform proposals, and includes includes links to reports, official voter information, public opinion polls and news stories.

Eminent Domain

Article I, Section 19 of the California Constitution allows the state government and local government the power of "eminent domain" for public use. Eminent domain is the right of the federal, state and local governments to take private property provided it is for the benefit of the public as a whole. California law states that the government must pay "just compensation." If the owner does not wish to sell his or her property, the government can still exercise its right to seize the property. Traditionally, the government's right of eminent domain has been used for projects such as highways, schools, libraries and public utilities. More recently, critics have accused state governments of using eminent domain to develop or revitalize specific areas as a means to bring in additional property and sales tax revenues. Governments are also required to compensate land owners if new laws are passed which affect parcels and create economic losses for that owner. Eminent domain is an issue which has previously surfaced on California ballots. Most recently,Proposition 90 was placed on the 2006 general election ballot. It would have established new guidelines when the government seized land, compensated property owners or made laws that affected the economic stability of land owners. Prop. 90 was defeated 52.4% to 47.6%.

CALIFORNIA CONSTITUTION: ARTICLE 1 DECLARATION OF RIGHTS SEC. 19. Private property may be taken or damaged for public use only when just compensation, ascertained by a jury unless waived, has first been paid to, or into court for, the owner. The Legislature may provide for possession by the condemnor following commencement of eminent domain proceedings upon deposit in court and prompt release to the owner of money determined by the court to be the probable amount of just compensation.

The federal suit of the Kelo family against the City of New London, Conn., became a landmark eminent domain case in 2005. The U.S. Supreme Court ruled that the power of eminent domain included the authority to take private land without consent of the owner, for the express purpose of reselling that land to another private party. The Kelos had to leave their home when the city of New London seized their property for a privately sponsored development plan. The court said the development would add to the city's tax base, therefore making the seizure justified. With many other states enacting eminent domain reform in the wake of the Kelo decision, concerns have arisen that similar suits could be launched in California. State property-rights groups and homeowners groups have asserted that Proposition 98 and Proposition 99 are necessary to reform what they see as dangerous lack of land seizure restrictions in California law.

New Eminent Domain Restrictions

Prop. 98 would prohibit state and local government from seizing property and transferring it to an individual, a business or a non-profit agency. Government would also be barred from using the property in a similar way as the original owner. These restrictions would be null and void in cases where the government is engaged in stopping a crime or preventing a public nuisance. The government would be permitted to use seized properties for public facilities such as public schools, roads and parks. However, the government is barred from seizing the land for one purpose and then using it for another unless it first offers to sell the property back to the original owner. Prop. 98 would bar the government from placing restrictions on property if the intent of the government is to transfer property to a private person or entity for that person or entity's economic benefit.

Compensation to property owners would increase under Prop. 98. All business relocation costs would be reimbursed to the original owner, exceeding current limits in state law. The owner would also be entitled to reimbursement for attorney costs if they mounted a successful challenge to the government in an eminent domain dispute. In the case of a legal challenge, the court is directed to use it's own legal judgment rather than defer to government findings.

Rent Control

About 1 million Californians live in rent controlled living situations. California has more than a dozen cities that have some form of rent control, and many cities and counties in California also place restrictions on the rent that mobile home park owners can charge their tenants. Currently, vacancy decontrol is a part of the state law. This allows for unregulated rent increases when a tenant moves out. Individual cities have passed laws to strengthen or weaken rent control.

Banning Rent Control

Prop. 98 would bar the government from placing price limitations on what an owner can charge to buy or rent their property. Both state and local government would be affected under the measure. Rent control measures enacted after Jan. 1, 2007 would end. Measures enacted before this point would be phased out once a unit or house has been vacated and the owner could now charge market rates. Prop. 98 would also bar any new rent control measures from being enacted.

California Cities Currently With Rent Control:

• Berkeley
• Beverly Hills
• Campbell
• East Palo Alto
• Fremont
• Hayward
• Los Angeles
• Los Gatos
• Oakland
• Palm Springs
• San Francisco
• San Jose
• Santa Monica
• Thousand Oaks
• West Hollywood

Proposition 98 - Key Provisions:

• Prohibits state or local government from seizing property and transferring it to a private person or entity.
• Property owners would receive more compensation for eminent domain seizures.
• Rent control would be abolished in California.
• Previous rent control measures would either end or be phased out.
• No new rent control measures could be enacted.

Proposition 98 is sharing the ballot with Proposition 99, a eminent domain measure which carries a provision that if it is approved by more votes than Prop. 98, Prop. 98's provisions would not go into law. If both measures pass, but Proposition 98 receives more votes, both measures would be in effect. Prop. 99 was created as a challenge to Prop. 98, which has more extensive property rights provisions. Prop. 99 supporters believe that the inclusion of rent control in Prop. 98's provisions is unrelated to eminent domain and would have a harmful effect on the state's population. Proposition 98 carries no provision about other measures passed but supporters have claimed that they believe Prop. 99 is a flawed measure which does not adequately champion landowner rights.

Background Publications

Brown, Warner and Portman, The California Landlord's Law Book, Vol. I: Rights & Responsibilities, Appendix C (NOLO Press 2005)

California Practice Guide, Landlord-Tenant, Chapter 5 (Rutter Group 2005).

More than meets the eye: What would Proposition 90 mean for California? Sacramento:The California Budget Project, Sept. 2006.

Rent Control In The New Millennium By Dennis Keating and Mitch Kahn, National Housing Institute, 2001.

"Twenty Years Later: A History of Rent Control in California," Steve Carlson, Sacramento: California Housing Council, Winter 1995-96.

Arguments for and Against

Prop. 98 supporters believe that illegitimate property seizures are taking place throughout the state and that their measure will create common-sense restrictions. They say that the measure's provisions to limit government seizure power, will provide "full compensation" to landowners and protect California farmland from urban sprawl. They believe that the measure's removal of government price control restrictions will free landowners to charge the appropriate market value for selling or leasing their land.

Opposition groups claim that Prop. 98's provisions to eliminate rent control around the state could have disastrous consequences on poor, working-class and aged citizens. They also believe that the language of the measure would could potentially bar important environmental projects, such as local land-use development. Critics also say that Prop. 98 is drafted in such a way as to potentially prohibit the acquisition of property to develop public water projects that would help maintain California's water resources and supply.

In Comparison: Prop. 98 and. Prop. 99

Proposition 98 and 99 are both eminent domain measures on the June ballot. They have different effects however, and supporters of both initiatives believe that their proposals better address the eminent domain issues.

Prop. 98's supporters largely come from taxpayer groups, property associations, and business groups. It is sponsored by the Howard Jarvis Taxpayers Association, the California Farm Bureau and the California Alliance to Protect Private Property Rights. Proposition 99's supporters come from a coalition of environmental groups, homeowner's associations and city and county governments. It is sponsored by the League of California Cities and the California League of Conservation Voters.

Prop. 98  Provisions	Prop. 99 Provisions
Proposition 98 would raise the compensation amounts provided by the government in eminent domain seizures.	Prop. 99 has no provision for raising compensation amounts
Prohibits the government from taking ownership of any property and transferring to a private party.	Prohibits government from taking a single-family home and transferring it to a private party
Prohibits goverment from taking ownership of any property and using it for a purpose similar to those of the private owner.	No provision restricting use of property as compared with use of original owner.
No prohibition if government is using property to prevent or address criminal activity, a public nuisance or if addressing an emergency declared by the governor.	No prohibition from taking a family home if government is taking property to protect public safety, repond to an emergency, prevent environmental problems or if building a public work.
Directs courts to use independent judgment when deciding eminent domain cases.	No provision included for legal challenges.
Property owners would be reimbursed for attorney fees in the case of a successful legal challenge.	No provision included for legal challenges.
Contains no mention of Proposition 99.	Contains section which would make the provisions in Proposition 98 void if Prop. 99 passed by more votes.
Would eliminate all rent control in California.	Would not eliminate rent control.

Official Voter Information

Title and Summary

Analysis by Legislative Analyst's Office

Individual Campaign Committees
Committees formed to support or oppose the ballot measure.

Key Websites and Links

California Department of Consumer Affairs Rent control page

California Proposition 98 versus Proposition 99 (2008) Information and analysis site from Ballotpedia.org

Easy Voter Guide: Prop. 98

Pros and Cons: Prop. 98. Analysis from League of Women Voters

Rent Control. Wikipedia.

Public Opinion

Eminent domain initiatives: voter sentiment favoring passage of Prop. 99 but not Prop. 98, Field Poll #2269, May 29, 2008.

Californians and their Government, Public Policy Institute of California, May 2008. Californians opinions on Prop. 98 and Prop. 99.

Californians and their Government, Public Policy Institute of California, March 2008. The poll tested the conflicting eminent domain measures on the June ballot.

Audio and Video

Campaign Videos

Vote NO on 98, YES on 99 Video posted on youtube.com by tenants rights lobbyist.

Audio Presentations

KQED Radio Forum program: Proposition 98 - Eminent Domain and Rent Control.
Fri, Mar 14, 2008, 9:00 AM, Host: Dave Iverson
Guests: Michael Shaw, legislative director with the National Federation of Independent Business (Sacramento), and Ted Gullicksen, office manager for the San Francisco Tenants Union
Download (MP3)