As part of his plan to address California’s fiscal crisis, liberal Democratic Governor Jerry Brown has proposed abolishing California’s 400 local “redevelopment agencies,” which would save the state some $1.7 billion per year, an important step towards closing the state’s $25 billion annual deficit. Unfortunately, his plan has so far been stymied by opposition from California Republicans, all but one of whom voted against it in the California Assembly. Under the California state constitution, passage of the bill requires a two thirds majority in the state Assembly, and Brown fell one vote short.
The GOP’s stance on this issue is extremely unfortunate, and at odds with the Party’s supposed devotion to free markets and property rights. As Steven Greenhut, an expert on California property rights issues points out in a recent Wall Street Journal op ed, the redevelopment agencies are notorious for their abuses of the power of eminent domain for the benefit of powerful private interest groups:
[I]n the last 60-some years, redevelopment agencies have become fiefdoms that run up enormous debt and abuse eminent domain by transferring private property to large developers promising to build tax-generating bonanzas. Today, there are 749 such projects. In the late 1950s, there were only nine. According to the state controller, redevelopment agencies consume about 12% of all state-wide property taxes—money that would otherwise go to critical public services....
Palm Desert’s redevelopment agency proposed to eliminate so-called blight by spending nearly $17 million on revamping a municipal golf club that remains one of the nation’s premier golfing locales.
In the 12 years I’ve spent reporting on this issue, I’ve seen an agency attempt to bulldoze an entire residential neighborhood and transfer the land to a theme-park developer. I’ve witnessed agencies declare eminent domain against churches—which pay few taxes—in order to sell the property at a deep discount to big-box stores that promise to keep city coffers flush. Working-class people and ethnic minorities often are the victims of this process since they often live in the vulnerable neighborhoods, and they have less muscle than big business developers.
The trouble is that blight is an amorphous concept, easily abused by government officials and redevelopment agencies. Once “blight” is found, the agency creates a project area and can then begins selling bonds (incurring debt) without a public vote. In 1995, one area of the city of Diamond Bar, where I lived, was declared blighted because there was chipped paint on some buildings....
While economic development and local control are crucial issues, it’s hard to understand why any Republican would believe that a regime of government planning and subsidy is the best way to achieve those goals. They should be standing up against the abuses of property rights and the fiscal irresponsibility inherent in the redevelopment process and championing market-based alternatives to urban improvement—even if it means defending a proposal from a Democratic governor they often disagree with.
As I have often pointed out in previously, dubious “blight” condemnations are one of the most serious threats to property rights in the United States today. They are especially likely to be used to victimize the poor, ethnic minorities, and the politically weak.
For these reasons, among others, Jerry Brown’s proposal should be supported not only because it will save the state money, but because it will protect vulnerable property owners against abusive takings. It’s also worth noting that these kinds of blight condemnations not only cause great harm to their victims, but also generally fail to produce the economic growth that supposedly justified them in the first place.
Overall, I have been skeptical about the prospects for “liberaltarianism,” the proposed political coalition between liberals and libertarians. On this issue, however, the two groups have an obvious common interest. The libertarian goal of protecting property rights overlaps here with several liberal objectives, including helping ethnic minorities and supporting one of the nation’s most prominent liberal governors.