PRIMER ON PROPERTY RIGHTS AMENDMENT
he General Assembly will take up several thousand bills when it reconvenes in January. Only one -- a bill proposing the Property Rights Amendment to the Virginia Constitution -- will make a place in history for the 2012 General Assembly. If Delegates and Senators vote for the Property Rights Amendment, they will follow the lead of the great Virginians who shaped and championed our nation’s commitment to individual liberty by insisting that the protection of private property ownership be guaranteed to all Americans. But as obvious as it may seem that the General Assembly would not stand against the fundamental rights of the citizens, the outcome is far from certain.
The Property Rights Amendment will protect your rights from overreach by state and local governments—many of whom are now leading the opposition to its passage. They have mounted an aggressive campaign –one financed by your tax dollars – to block its passage in Richmond. If the opponents of the Amendment succeed they will take away Virginians’ opportunity to have the final say in approving the Amendment on the November 2012 ballot. Similar state constitutional amendments have passed with overwhelming majorities everywhere citizens have been able to vote on them.
The opponents and their lobbyists have united behind an effort to mislead Virginians about the financial consequences of the Amendment’s passage. The questions and answers below dispel their misinformation by explaining the shortcomings of the current laws and describing the benefits from passage of the Property Rights Amendment.
Make sure your local Board of Supervisors or City Council knows that you do not appreciate their use of your tax dollars to pay lobbyists to deprive you of your fundamental right to private property ownership.
Most importantly, call your Delegate and Senator to make sure they support the Property Rights Amendment. To learn who represents you in the General Assembly click here.
Q. What are my property rights? Why aren’t these enough?
A. Currently, Article I, Section 11 of the state Constitution provides that “just compensation” must be paid when property is taken or damaged for public use. But the current Constitution leaves it to the Virginia General Assembly to define “public use.” Accordingly, government officials in Virginia have been able to confiscate property for uses that are not truly public (such as economic development). And when they do take land, they have been able to force property owners to accept less as compensation than what they are losing.
Q. Why is the proposed Property Rights Amendment better?
A. It does three things to stop government overreaching when it takes land, and from underpaying property owners. First, it clarifies that government can take private property only when the land will be for projects the public will actually use (such as transportation and schools – not private projects that will only benefit developers) – it makes the words “public use” mean what they say. Second, it will end the systematic shortchanging of Virginians who lose their business to a condemnation or see their property’s value severely diminished when their highway access is cut off. And third, it enshrines the right of private property ownership as a fundamental right, recognizing that it has the same status in the eyes of the law as the rights of freedom of speech or religion.
Q. Why is it important to recognize property rights as a fundamental right?
A. Of all the power we give the Commonwealth to regulate our lives, the two greatest are the power to take an individual’s freedom (and in extreme circumstances an individual’s life) and to take an individual’s property. Neither should be taken without the greatest deliberation and care. In Virginia, property rights are often treated as a secondary right. So, in the eyes of the law, property rights are not as protected, or as respected, as other civil rights. The Amendment gives property owners much greater standing in court when the government attempts to take their property.
Q. What is the history of the proposed Property Rights Amendment?
A. The U.S. Supreme Court, in its infamous 2005 Kelo decision, ruled that the U.S. Constitution allowed one person’s property to be taken by the government and then sold or given to someone else who promised to use it to generate more jobs and taxes. That ruling awakened Americans to the abuses taking place in their communities and galvanized them into action. More than 40 states enacted anti-Kelo reforms. In 2007, Virginia banned the use of eminent domain for economic development and enacted other protections. Virginia cities and counties fought hard to stop these reforms and have lobbied hard to dilute them ever since.
Consequently, the 2007 reforms are only as strong as a majority of the next General Assembly wants them to be. The only way to make these protections ironclad is to have the voters of Virginia write them into the Constitution.
Q. What has to happen to pass the Amendment?
A. A constitutional amendment must be approved twice by the General Assembly then ratified in a referendum by the voters. In 2011, the General Assembly passed the Amendment for the first time by wide, bipartisan majorities in both houses. The House of Delegates passed the Amendment 83-15, and the Senate passed the Amendment 35-5. If the Amendment passes in the 2012 General Assembly, it will be placed on the statewide ballot next November (2012), where it is expected to pass with an overwhelming majority. Passage of the referendum would put property rights protections out of reach of the continuing efforts to water them down.
Q. Could Kelo happen in Virginia?
A. Yes. It has and cases are currently pending in which it could occur again.
For example, in 2007 in Roanoke, the Roanoke Redevelopment and Housing Authority confiscated a family-run office furniture and interior decorating business that Carilion Health System, the city’s biggest employer, wanted for the site of a medical office building. The RRHA obliged because the medical building was supposed to generate more taxes and jobs than the office supply company and the mayor was worried the hospital would leave the city. When the economy went sour, Carilion lost interest and said it no longer wanted the property. The redevelopment authority went ahead with the taking anyway, forcing an operating, taxpaying business to move and creating what remains a vacant lot. This case became known as Virginia’s Kelo and others similar to it are currently pending in Norfolk. Passage of the Amendment will make it impossible for government to take someone’s land and give it to a politically-favored third party.
Q. Don’t property owners already get paid fair market value when their property is taken by eminent domain?
A. No. In Virginia property owners are never actually made whole when their property is taken by the government using the power of eminent domain, because they are forbidden from presenting evidence as to certain losses and almost never reimbursed for their costs to pursue just compensation. The Amendment gives meaning to the phrase “just compensation.” Here are examples of government shortchanging of property owners:
Norfolk, 2005. The City of Norfolk threatened condemnation against The Lafayette Hotel in response to pressure from leaders of the adjacent neighborhood who wanted it demolished for a park. When the owner refused to permit the city’s appraiser on his property, the city sent a police officer with him to do his work, resulting in an appraisal and offer of $600,000. When the story broke in the newspaper, the public outrage forced the city to back down. Two years later, the owner held a public auction for the property and sold it for $2.2 million. Virginians won’t have to rely on public outrage to get a fair shake in getting just compensation if the Amendment passes.
Fairfax County, 2008. VDOT expanded Leesburg Pike at Tysons Corner from six to eight lanes to make room for the Metro subway line to Dulles Airport. One of the losers was Pike 7 Plaza. The 21-store shopping center not only lost parking spaces, but more importantly, two of its four entrances onto Leesburg Pike. The lengthy backups into and out of the shopping center’s parking lot frustrated customers and hurt business, making it a far less appealing and less valuable commercial space. Experts calculated the loss at $16 million. A Fairfax judge ruled that because Pike 7 Plaza still had some highway access, the law denied its owners the right to ask a jury for money to makeup for the diminished value caused by the traffic snarls.
So, the jury never heard about the $16 million loss the owners forecast and awarded them a payment only for the land that was taken, $2.1 million. Because VDOT had already given the owners a partial payment of $4.6 million pending the jury’s award, the owners are now responsible for paying back the $2.5 million difference. Passage of the Amendment will cure injustices like this by allowing owners to make their case to a jury for damages from lost access.
Q. Two of the most controversial aspects of the Amendment would allow owners to present evidence to a jury if they have suffered damages in the form of “lost access” or “lost profits.” Why are these provisions necessary?
A. Whenever VDOT builds a new road, it creates winners and losers among property owners along its path, depending on whether it makes it easier -- or harder -- for cars to enter and exit. This can mean life or death for a business. Presently if you lose access to your property as a result of the use of eminent domain there is no guarantee that you will be allowed to present this evidence to the jury.
In the same way, a property owner whose business is taken by eminent domain is, under present law, not permitted to present evidence to a jury as to the lost profits he or she would have made had the business not been seized. The Amendment permits a property owner to present evidence to a jury as to these lost profits, and allows a jury to award compensation for these lost profits that are proven by the property.
Opponents of the Amendment have made baseless and inflated claims about the financial effect from this, contending it would guarantee hefty new payouts of public funds. The only thing the Amendment guarantees is that the property owners will be allowed to present evidence of damages to the jury.
Q. Does the Amendment mean that property owners will automatically receive additional compensation for lost profits and lost access?
A. No. The Amendment simply allows property owners to present evidence to a jury as to the value of their lost profits and lost access, if any, along with their other evidence as to the just compensation they believe they are owed. The ultimate determination as to whether a property owner should receive any compensation for lost access or lost profits will remain with the jury. The law currently forbids property owners from presenting this type of evidence.
Q. The Amendment states that “the condemnor bears the burden of proving that the use is public, without a presumption that it is.” What does this mean for property owners?
A. One of the most significant things the Amendment does is to correct an imbalance of power between individuals and the government taking their property. Currently, if an owner challenges a taking as not being for a public use the owner must prove that the government has acted improperly, and the government’s confiscation of property is always presumed to be for a public use. The Amendment reverses this condition so that when a property owner challenges the legality of a taking, the government must prove that it has exercised its power in accordance with the law.
Under present law, the judge must presume that the government is acting legally, no matter how dubious the circumstances. The proposed constitutional amendment will create a check and balance because it will require public officials to prove to a judge that a taking is for a legitimate public use.
