Prop. 98 Supporters Concede Defeat

Prop. 99, a rival measure on eminent domain that preserves rent control, leads in returns.
LA Times, June 3, 2008

SACRAMENTO -- Californians on Tuesday appeared to be rejecting a state ballot measure that would phase out rent control and bar government agencies from taking homes, businesses and farms for private development.

While Proposition 98 was falling short, voters were favoring Proposition 99, a more narrowly drawn competing measure that would prohibit government agencies from using eminent domain powers to force the sale of owner-occupied residences for private projects.

The backers of Proposition 98 conceded defeat shortly after 10 p.m.

"By placing a second eminent domain measure on the ballot, opponents of private property rights created enough confusion between the ballot measures to defeat Proposition 98," said Jon Coupal, president of the Howard Jarvis Taxpayers Assn. "Prop. 99's loopholes will allow eminent domain abuse to continue."

Opponents of Proposition 98 charged that the measure was sold as eminent domain reform when its real purpose was to eliminate rent control.

Tuesday's primary election, which also featured congressional and state legislative races, was plagued by low turnout, one result of a decision to split off the state's presidential primary and hold it in February.

Less than one-third of registered voters were expected to vote by mail and in person Tuesday, according to Stephen Weir, the Contra Costa County clerk-recorder who heads the statewide association of elections officials. Weir said there were no reports of major problems in Tuesday's election.

Under current state law, government agencies can use eminent domain powers to force property owners to sell for fair market value and can then sell the land or buildings at a discount to a developer for construction of a mall or other profit-making venture.

Proposition 98, which was backed mostly by landlord groups, would change the state Constitution to phase out rent control in addition to barring agencies from forcing property owners to sell their property for use by private developers; it would allow the use of eminent domain to take property for public uses, such as schools and roads.

Proposition 99 was placed on the ballot as a competing measure by associations representing cities, counties and renters. The eminent domain provisions are similar but more narrowly focused than Proposition 98.

Like Proposition 98, it would exempt public works projects. Proposition 99 would make no change to rent control laws.The Howard Jarvis Taxpayers Assn., California Farm Bureau and other sponsors of Proposition 98 said it was a necessary response to a 2005 U.S. Supreme Court decision that upheld the right of governments to take homes for commercial development.

The measure would maintain rent control for current tenants but lift it on apartment units and mobile home spaces as they are vacated.

"It's kind of un-American to force a housing provider or any other business to provide services at less than fair market value," said Dan Faller, president of the Apartment Owners Assn. of California. Faller's group was part of a main campaign that spent about $7 million to support Proposition 98, with about 80% of the money coming from real estate interests, including owners and managers of apartment buildings and mobile home parks.

Opponents spent about $11.3 million, much of it from the League of California Cities, California State Assn. of Counties and California Redevelopment Assn. Faller was not confident late Tuesday that the measure would pass, citing opponents' larger bankroll and "a lot of deception. They were telling tenants they would be out on the street the day after this passes."

The potential rollback of rent control drew the opposition of Jeannine English, president of the California AARP; Janis R. Hirohama, president of the League of Women Voters of California, and Larry Gross, executive director of the Los Angeles-based Coalition for Economic Survival, a tenants group.

"Seniors and other vulnerable people have a difficult time finding low-cost housing and this would eliminate those options for them," English said. About 1.2 million people live in apartments and mobile home parks covered by rent control in California.

Gov. Arnold Schwarzenegger spoke out against Proposition 98, warning that it could add to the cost and delay of funding public works projects with voter-approved bonds by setting up additional restrictions on government use of eminent domain.

Proposition 99 was written so that it, and not 98, would take effect if both passed but Proposition 99 received more votes.