“Property owners do not acquire a constitutionally protected vested right in property uses …” – Texas Supreme Court; City of University Park v. Benners, 485 SW 2d 773 (1972).
To fully solve the problem of local regulations making Texas cities less and less affordable for the average Texan, delaying construction, and costing Texans jobs, the Texas Legislature must undo the damage done by Texas courts that have subjugated private property rights to the whims of local government planners.
Under the Texas Supreme Court’s 1972 University Park v. Benners decision, property owners must have permission from the government to use their property for anything. So cities can tell owners how they can and can’t use their property, tell them how much of their property they can or cannot use, and can even allow property owners to use their property for a specific use for a time then later prohibit that use. Owners must bear the full cost of these restrictions to serve the “public interest.”
Fortunately, the solution to this is simple. The Texas Legislature should subject cities to the provisions of the Texas Real Private Property Rights Preservation Act, just like every other Texas government entity, giving property owners the ability seek compensation for losses due to regulations. By removing the exemption for cities found in Sec. 2007.003 of the Texas Government Code, the Texas Legislature will provide Texans their day in court to recover the costs of local government regulations that result from outcomes like these:
- In Harris County, media reports indicate the approval process for business permits can cause delays of up to six months while trying to comply with unnecessary provisions.
- A 2015 study found that bureaucratic procedures can add up to 3.5 months to the already lengthy Austin permitting process.
- A survey from the National Association of Homebuilders found that “government regulations represented 25 percent of a [residential] unit’s final sales prices.”
In the aftermath of Tiger Woods’ dominant victory in the recent American Express Championship golf tournament, a number of Wood’s competitors announced they will be asking the U.S. Department of Justice to file suit seeking the breakup of Woods for violating federal antitrust laws.
“He’s dominating the game,” said Adam Scott, who finished second, eight shots back of Woods. “It’s not the first time he’s done it, either. We need to take steps now to ensure that the game remains competitive.”
After finishing in fifth place, Ernie Els, one of golf’s top players, joined in with those who said something must be done.
“Tiger just doesn’t understand how abusive he is of his monopoly position,” said Els. “He unduly pressures and intimidates competitors and potential competitors.”
Fox News reports that the city of Taunton, Massachusetts is considering the use of eminent domain to save some manufacturing jobs:
When the Haskon Aerospace plant in Taunton, Mass. shut down in October 100 workers lost their jobs. Many had worked at the facility for decades, making seals and gaskets for aircraft.
City leaders are considering an unusual measure to save the plant, which has been a staple in the community for 80 years, operating under the umbrellas of numerous corporate entities over the decades.
The Taunton City Council is exploring the possibility of exercising the power of eminent domain to take the machinery away from the parent company, Bellevue, Wash. based Esterline. The city would pay a fair price to prevent the equipment from being sold at an auction scheduled for December 14.
Former Haskon workers hope to raise the capital to buy it and run an employee owned operation or find a new corporation to take over the business.
A coworker of mine noted the creativity of this endeavor. I agree with him. In fact, governments area full of very bright, very creative people. So it never surprises me to see actions like this in government because God created man in His image and endowed all people–government employees as well–with a measure of His creativity to use when they face challenges. Normally, in a free market, the employment of that creativity works out to the benefit of all because all the property and effort used in the process is voluntary. Not so in this case, where the government will use theft to supply the needed resources to carry out this project.
Creativity is a beautiful gift from God, but just like with all of His gifts, we are required to use them wisely for His glory and our good.
“Our free market system is usually termed capitalism and by that definition capitalism has hardly been around long enough to deserve all the evil for which it is being held responsible. … Actually, all systems are capitalistic. It is just a matter of who owns and controls the capital—ancient king, dictator, or private individual. We should be looking [for] a free market system where individuals have the right to live like kings if they have the ability to earn that right.” – Ronald Reagan, 1979
It is not often that governments voluntarily reduces fees or taxes. So when one does, it is worth taking a closer look.
Last month, Plano voted to eliminate impact fees on developers building new homes and businesses. The fees were charged based on the size of the water meter for the project, and typically ran from $1,000 to $2,000 for a typical home, but could go as high as $95,000 for the largest meters. The money was then used to build additional infrastructure for the city. But as new construction has slowed in Plano, the city is looking for ways to make it less expensive for people to live in.
Taken by themselves, impact fees could be seen as a user fee, which is one of the better ways for governments to raise money. Use a service, pay a fee. That is what makes toll roads so appealing from a market perspective. But user fees are only good if used instead of general taxation, replacing the tax revenue rather than supplementing it.
I don’t know which route Plano took, but the good news now is at least its city council members acknowledge the fact that fees and taxes make living their more expensive—not for the developers, but for the people who live there and ultimately have to bear these costs.
Eminent Domain reform moved forward for the first time since 2005. HJR 14 will stop local governments from using blight designations to condemn blocks of perfectly good homes and businesses for economic development projects. That is good news—El Paso and other cities may be out of the downtown redevelopment business when it comes to using eminent domain.
However, local government opposition weakened public use language in HJR 14, meaning more work needs to be done in 2011. Legislators should push for statutory changes that ban Kelo-style transfers of taken property from one owner to another, further reform blight laws, and end government land speculation by allowing original owners to repurchase any condemned property that hasn’t been used within five years.
When it comes to regulatory takings—which probably has a bigger negative impact on the Texas economy—nothing was accomplished. Cities are still free to take property by restricting its use with few limitations.
This post was first published by the Texas Public Policy Foundation.
Four years have passed since the U.S. Supreme Court’s infamous Kelo decision, which essentially changed private property ownership from a fundamental civil right to a privilege granted by the state at its sole discretion.
Texas has failed to adequately respond to this decision. The first attempt in 2005 missed the mark. In 2007, the Legislature passed strong property rights protections in HB 2006, but the bill was subsequently vetoed over concerns about compensation.
SB 18 is this legislative session’s eminent domain reform bill. However, it was recently stripped in the Senate State Affairs Committee of two key reforms. As it stands today, there is a good chance that after the legislature adjourns, Texas property owners will still be subject to the same takings that outraged the nation in the Kelo case.