Real Estate Magnate Capitalizing on Eminent Domain Outrage

| Fri Oct. 6, 2006 3:13 PM EDT

More than a year ago, people and lawmakers across the political spectrum took up arms against eminent domain abuse. The fillip was the Supreme Court ruling that the City of New London could replace a working-class neighborhood with condos, a hotel, and office space related to a Pfizer center.

What alarmed Americans were the evictions of small businesses and working-class neighborhoods for the benefit of corporations and developers. Statehouses rushed to curb the practice. But now the zeitgeist is also being channeled against something else: land-use regulation in general.

Groups backed by Howard Rich, a wealthy New York real estate investor and libertarian activist, have spent about $5 million on initiatives to appear on ballots in four states this November. In California alone, they've spent $3.3 million on Proposition 90. If it passes, the state will have to compensate landowners and developers for regulatory actions that diminish the value of their property.

The Sierra Club is against it. So are the editorial boards of 11 newspapers. A land-use lawyer in San Francisco says what backers of Prop 90 really want is "to gut the government's police power to regulate business, including land use, development, mining, and grazing."

On the other hand, economist Tim Harford in Slate points out instances when environmental protections backfired. He argues that taxpayers should foot the bill to save nature.

--April Rabkin

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