By Larry Jones
November 20, 2006

Voters in nine states approved ballot initiatives November 7 restricting state and local use of eminent domain for private development. In a strong expression of opposition to the U.S. Supreme Courts 2005 decision in Kelo v. City of New London, which affirmed local use of eminent domain in taking private property for economic development, voters in Arizona, Florida, Georgia, Michigan, Nevada, New Hampshire, North Dakota, Oregon and South Carolina approved measures that restrict local use of eminent domain for private development.

Voters rejected similar initiatives in California, Washington and Idaho. In these states, the ballot initiatives included prohibitions against using eminent domain for private development as well as language imposing restrictions on regulatory takings. The takings language would have required state and local governments to pay property owners when their rules and regulations cause property values to decrease, or waive the rules or regulations. Opponents of the takings initiatives claimed that passing these measures would open the flood gates to law suits against local governments, impose billions in new costs on taxpayers, and jeopardize environmental and quality of life protections. American for limited Governments, which is chaired by New York real-estate investor Howard Rich, has bankrolled many of takings initiatives.

Opponents of the takings measure also cautioned voters, reminding them of the Oregon experience where voters adopted a pay-or-waive takings measure in 2004 and already recent poll show that 49 percent of Oregon residents now say they would oppose the measure while only 29 percent say they would still support it.

In Arizona the measure not only prohibits local use of eminent domain for private development but includes takings language that will allow property owners “to seek compensation for any reduction in their right to use, divide, sell, or possess their property caused by the passage of any land-use law.” Opponents of the measure, which passed by a margin of 65 percent to 35 percent, believe it opens virtually every land use regulation to the possibility of legal challenge, which could paralyze local officials.