Property Frights

Why property rights initiatives are losing at the polls

When Phil Marble went door to door in Bellevue and Seattle, Washington, last fall soliciting support for Referendum 48, a sweeping statewide property rights initiative, he used his own experience to get people's attention.

A Washington native, Marble had worked as a reforestation contractor and landscaper in the '70s and '80s. Then in 1990 he decided to start a nursery that would specialize in native plants. He bought 16 acres in a rural area of Whatcom County, which butts up against the Canadian border.

Six months later, the nearby Nooksack River flooded and scoured topsoil off of much of his property, leaving one-third to one-half useless for nursery purposes. The state Soil Conservation Department quickly approved Marble's plan to replace the topsoil. But several of his neighbors were major players in the local and county governments, and they wanted to direct future flood waters from their land onto his. Naturally, they didn't want to pay for it.

"I was the fall guy. I was new on the block, and I guess they figured I could be a pushover," Marble says.

Just as Marble was finally ready to begin replacing 40,000 yards of soil, the county suddenly issued a stop-work order in September 1993. The order didn't list any specific violations; it just stated that he was exceeding the approved restoration plan. Later county officials told Marble he was filling in a floodway and ordered him to create a channel seven feet deep, 200 feet wide, and 1,200 feet long. But according to Marble, no such floodway had ever existed in the past–and he has an engineering study and 50 years of aerial photographs to prove it. Gene Aarstol, one of Marble's neighbors and head of the Deming Diking Association, wrote in a February 12, 1996, letter to Whatcom County Executive Peter Kramen that "there has been a floodway and overflow channel through Mr. Marble's property ever since my 94-year-old father and I can remember."

County officials didn't back down, so Marble filed suit against the county on Fifth and 14th Amendment due process grounds. His case has been in federal court for nearly two years, and chances are it will drag on for years to come.

Marble estimates he's racked up $300,000 in engineering studies and lawyers' fees, and that's not counting the cost of keeping nearly half his land idle. To get by, he's been freelancing as a landscaper. Though he doesn't want to dwell on his predicament, it's clear he's very concerned about the future.

"Look, I'm 49. It's taken five years of my life, and it takes years to get any plants on line. What am I going to do?"

Even if he wins, he could lose.

"We're talking about so much money that the county would have to pony up. I could end up winning, but still owe large amounts to my lawyer," says Marble.

When Marble finished telling his story, people would shake his hand, tell him how much they sympathized with his situation–and say they were going to vote against Referendum 48.

"It was very disheartening," he says.

Disheartening not only to Marble but to property rights supporters in Washington and across the country. Referendum 48 was a high-profile showcase for the movement, and it lost by a resounding 3-2 margin. The measure was pounded in urban and suburban areas. And it wasn't the first time voters had rejected a property rights measure. In 1994, Arizona voters overturned a 1992 takings bill by the same ratio.

In many respects 1995 was a banner year for the property rights movement. Protecting property rights was a key component of the Contract with America, and dozens of states considered takings legislation. But for all their successes, property rights supporters have yet to show that they can win at the ballot box. They have not demonstrated that they can convince the broad majority of citizens that protecting property rights–and compensating people for their losses–is a matter of good government and simple justice. And they've made political and drafting mistakes that have further hampered their cause.

Future political historians may look at these setbacks as rookie errors. It's easy to forget, but the modern property rights movement is less than 10 years old. "When we founded our organization in July 1990, you probably could have counted the state and local organizations on one hand," says Peggy Riegle, chairman of Fairness to Landowners Committee, a national property rights organization.

In the mid-1980s, University of Chicago law professor Richard Epstein provided the intellectual framework for the property rights movement. Historically, property owners have received compensation only when the state takes outright possession of their land. Epstein argued that regulations that diminish the use and value of property are no different from any other kind of taking. Public interest law firms, such as the Institute for Justice, Pacific Legal Foundation, and Northwest Legal Foundation, used Epstein's work to launch a property rights renaissance in the courts. Disgruntled ranchers, farmers, and foresters began to coalesce and form grassroots organizations across the country.

In many parts of the country property rights groups focus their attention on federal laws: on the Endangered Species Act, the Environmental Protection Agency, and wetlands regulations. But the federal government isn't the only threat. Washington state groups direct much of their attention on the State Environmental Policy Act and state buffer zones, wetland ordinances, and fish and wildlife habitat regulations.

"Most of the buffer zones and designated wetlands come from the state," says John Carlson, chairman of the Washington Institute for Policy Studies and host of a local conservative radio talk show. Hence the movement to do something about takings at the state level.

The Washington property rights movement expanded and broadened its base following passage of the Growth Management Act in 1990 and 1991, which implemented comprehensive statewide land-use planning standards for the first time. The GMA created urban growth boundaries, sharply limiting the permissible uses of property outside them. "Thousands of property owners were wiped out at the stroke of a pen," says Jim Klauser, executive director of the Northwest Legal Foundation.

But though the property rights movement in Washington and elsewhere grew rapidly, activists spent most of those early years in rural areas out of the limelight and without political influence. Like the Congressional Black Caucus today, property rights supporters were a minority faction in the minority party. In Washington state, they spent five years at the legislature just trying to get committee hearings for their bills. Frustrated by inaction, Dan Wood of the Washington State Farm Bureau organized a petition drive for an "initiative to the legislature" in 1994. As the name suggests, this type of initiative goes to the legislature, which must pass the measure within two years without any changes or it goes to the ballot. If the initiative passes, it becomes law without the governor's signature.

Activists didn't have high expectations that the legislature would pass any property rights bill, so they went for the brass ring. Unlike most takings legislation, Initiative 164, as Referendum 48 was known then, had no threshold for compensation–compensation was due for any regulatory taking, no matter how small–and was not limited to environmental regulations. The measure would have required state and local agencies to prepare an economic impact statement before adding new land-use regulations for public benefit and to choose the option with the least impact on private property. Then those agencies would compensate property owners for any resulting loss in value.

The initiative languished, but then the 1994 elections changed the political environment. Republicans took control of the state House and narrowed the gap in the Senate. Suddenly Initiative 164 had a chance–if it qualified. Developers poured money into the campaign and gathered the necessary signatures. The House passed the initiative 69-27. It was bottled up in the Senate for some time, but Republicans and rural Democrats forced a floor vote and it passed 27-20. Supporters didn't have much time to savor the victory, however, because opponents quickly gathered signatures to place the measure on the ballot that November as Referendum 48. They figured that property rights protections couldn't survive a showdown at the ballot box.

Something similar happened in Arizona. There, property rights supporters had an easier time winning their initial legislative victory because the state legislature and governor were pro-property rights. The 1992 bill would have required every state agency to determine the impact of new regulations and decide how to compensate landowners for any loss in property value. Before the bill could become law, however, green groups put the measure before the voters as a referendum.

Used to being a minority in the minority, property rights activists in both states previously had little incentive or opportunity to go beyond their circle of true believers and those who were well-versed in property rights. Suddenly they had to take their case to voters who knew little or nothing about the issue and find a way to convince them in 15- and 30-second soundbites.

Bob Robb, an Arizona political consultant, says the campaigns made the mistake of assuming that most voters already understood and embraced their viewpoint. "Most Americans are not taught that private property is essential to our freedoms. They are taught that property rights are inferior," he says.

Robb says another problem that proponents of the Arizona campaign had was showing "clear-cut abuses that this law would prevent," because most of the egregious takings cases in that state are committed by the federal government. Dan Jansen, counsel to Arizona Speaker Mark Killian, who led the legislative effort to pass the property rights bill, concedes that may be true but says, "If you're in the state legislature, you do what you can. You can't pass a law that reins in the EPA."

Activists in Washington didn't have that problem because they could target SEPA, the Growth Management Act, and other state and local laws resulting in regulatory takings. The Referendum 48 campaign highlighted the experiences of Phil Marble and other property owners, hoping to convince voters that the state was unfairly imposing the cost of regulations on real people. These horror stories had played well among people in rural areas, who were legitimately afraid that regulations could devastate their livelihoods. But a family living in the suburbs isn't worried about bureaucrats declaring their backyard a protected habitat for the spotted owl or their swimming pool a wetland.

"Proponents never did go to the average person who rents or has a single-family home and say this situation is intolerable and is hurting the average person," says Skip Richards, founder of the Committee for Land Use Education (CLUE) in Whatcom County. He says the campaign should have stressed how government restrictions on property hurt average voters by increasing the cost of housing and limiting job growth. But that is a hard case to make. The only direct experience that most people have with land-use regulation is with zoning ordinances. Even though people may understand intellectually that zoning raises the price of housing, those costs are hidden and indirect. If people can't see the cost, it doesn't make them upset.

And the truth is that most people like zoning. They believe it preserves the property values and character of the neighborhood. As with the school choice issue, voters in the suburbs see stronger property rights as something that would help other people, but would raise their taxes and threaten their neighborhoods. And if suburban voters won't give inner-city kids educational alternatives, they aren't going to vote to pay rural landowners and developers to comply with environmental regulations.

"If there is even the slightest risk that something could raise their taxes, they'll vote no," says CLUE's Richards.

That's what Marble discovered going door to door.

"People didn't want to pay for it. I heard that so many times from people I talked to," he says.

Environmental concerns also helped the opposition. Opponents in Washington and Arizona said the referenda were "pay the polluter" measures that would eviscerate environmental regulations. That charge fueled voters' already negative perception of Republicans and conservatives on environmental issues. Republican pollster Linda DiVall found in a recent nationwide survey that voters prefer Democrats 2-1 over Republicans on the environment. More damning was her finding that Republican voters, particularly those in the suburbs, have more confidence in the Democratic Party to protect the environment. Washington and Arizona voters are no exception.

But for the most part the opposition campaigns soft-pedaled green concerns and concentrated on a pocketbook message: This measure will raise taxes and increase bureaucracy. Late in the Referendum 48 campaign a study by the University of Washington's Institute for Public Policy and Management estimated that the initiative's cost could run as high as $12 billion. Many observers say it was a fatal blow to the pro side. "After that [study was released], most people stopped listening," says Richards.

Proponents tried to discredit the study, pointing out that it was funded by environmental foundations with connections to the opposition campaign and used data collected from local governments, which opposed 48. They argued that the study's estimates were way off, in large part because it assumed that government agencies would continue business as usual.

"I'm convinced that if [Referendum 48] had passed, it would have changed the government's behavior. We wanted government to think twice before imposing new regulations, and make sure it was worth the cost," says Tom McCabe, executive vice president of the Building Association of Washington and one of the leaders of the "yes on 48" campaign.

But they hadn't convinced voters that government behavior needed to be radically changed–certainly not at the price of higher taxes. A Seattle Times poll found that people who thought their taxes would go up voted no by a 3-1 margin. Even worse, Referendum 48 even lost in rural eastern Washington by 6,000 votes.

"They used a conservative argument to defeat a conservative idea," says McCabe.

Many people who supported Referendum 48 say the initiative was its own worst enemy, however. "Referendum 48 was recklessly written. Even those who defended it had to add caveats as to how the legislature could fine-tune it," says radio host Carlson, who led a successful initiative campaign in Washington to pass the nation's first "three strikes" law. "They had all the right ideas and all the right principles, but [Referendum 48's] vagaries allowed critics to make worst-case scenarios."

Wallace Rudolph, a professor of constitutional and administrative law at Seattle University, says he voted for Referendum 48, but its ambiguous wording left several important components open to interpretation: The measure would certainly apply to relevant regulations that were passed after the measure became law. But would it trigger compensation for new enforcement of old regulations (probably), or current enforcement of old regulations (very unlikely)?

Property restrictions for the public benefit–Referendum 48 listed regulations protecting wetlands, buffer zones, fish and wildlife habitat as examples–would have required compensation. Regulations that curtail public nuisances, which represent a harm to the entire community, would not. But there is no comprehensive list or standard to apply.

The public-nuisance standard probably would apply to some zoning regulations, such as prohibiting sewer plants in residential neighborhoods–though House Majority Leader Dale Foreman suggested that a ban on spraying pesticides near a school might require compensation. But most zoning laws would seem to fall under the public benefit heading because they protect and preserve the "essential characteristics" of neighborhoods.

However, John Groen, staff attorney for the Bellevue, Washington, office of the Pacific Legal Foundation, says that Referendum 48 would have required compensation only for regulations similar to the wetland, buffer zone, and habitat restrictions cited in the initiative–which usually leave a portion of the land completely idle. This interpretation would exclude popular zoning ordinances. But it also would mean that government agencies would have been obligated to compensate landowners when part of the property is rendered completely idle, yet could have imposed regulation that sharply limited the use of all of the property without compensation.

Even Dan Wood, the measure's original sponsor, wrote in a memo to Referendum 48 supporters shortly after the defeat that "our opponents have identified 'problem areas' with 164/48. Zoning, Retroactivity, and the Economic Impact Statement were identified as problem areas, as well as some technical language."

How could property rights supporters have drafted an initiative that Carlson says "became a millstone around the necks of its supporters"? Rudolph, who helped write the state's term limits initiative that passed in 1992, says that too often "when people get together to draft an initiative they only see the virtue of their side and no one tries to pick it apart." In the legislative process, confusing or unpopular provisions in a bill can be clarified, modified, or removed at any point until it's signed into law. But an initiative's language is frozen once it's filed, and that includes initiatives to the legislature. By the time Initiative 164/Referendum 48's "problem areas" were identified, it was too late to change anything.

Because of the 1994 elections, property rights had far more supporters in the legislature than Initiative 164's backers had anticipated. Legislators could have drafted a narrower and less-ambiguous bill, but ironically it would have had less chance of becoming law than the flawed 164. A property rights bill, unlike the initiative to the legislature, would have required Democratic Gov. Mike Lowry's signature, and he would have vetoed it. So legislators passed 164, but not before Majority Leader Foreman and Rep. Mike Padden engaged in a colloquy–a scripted exchange–intended to clarify what the legislature believed the initiative would and would not do. The legislators hoped the courts would consider that interpretation when they determined the measure's scope.

But arguing that the scope of Referendum 48 probably wouldn't wipe out zoning and probably wasn't retroactive–after all, no one could know for sure until it became law–didn't play well with the voters. "I believe the courts would have handled it and come up with the correct interpretation, but that's not going to cut it in an initiative campaign," says law professor Rudolph.

Property rights supporters looking at the results from Washington should be careful not to blame their defeat entirely on bad drafting, however. The Arizona bill was technically sound, and it was trounced by the same margin and lost in many rural areas of the state. Working on a more modest scale, however, activists have made gains even in those states. Arizona enacted a limited bill in 1995 that codifies the 1994 Dolan Supreme Court decision, which ruled that governments cannot force individuals to give up property rights in exchange for other rights without compensation.

In Washington state, Richard Sanders, a veteran property rights lawyer, was elected to the state Supreme Court. Jeanette Burrage, former executive director of the Northwest Legal Foundation, was elected to the King County Superior Court. Voters in Whatcom County approved a "mini 48" backed by CLUE, adding property rights language to the county charter. The state House has passed a bill this session known as "48 lite" or "48 done right," but no one gives the bill any chance of becoming law this year. Supporters are hoping a new, pro-property rights governor will be elected this fall.

Nationally, federal takings legislation remains stalled and congressional Republicans are rethinking their strategy for the entire environmental reform agenda. Referendum 48's defeat has dampened enthusiasm for property rights initiatives in other states. However, 17 states passed some takings legislation in 1995. Florida, Louisiana, Mississippi, and Texas enacted laws with compensation provisions, though none as sweeping as Washington's would have been.

Fairness to Landowners' Riegle says activists will continue to focus on legislative efforts. But property rights organizations are strongest in the West, where virtually all of the states have an initiative and referendum process. After their victories in Arizona and Washington, property rights opponents in those other states are sure to challenge any major takings measure. So in the end property rights forces will have to face voters directly in many cases.

"They say conservatives are liberals who get mugged. Maybe more rural people need for it to happen to them to be convinced," Riegle says. That might help in rural areas, but property rights activists cannot win any statewide initiative without significant support from urban and suburban areas. Until they can solve this electoral question, they aren't going to like the voters' answer.

Ed Carson ([e-mail]) is a staff reporter for REASON.