August 6, 2019
By Christina Sandefur
For the past 20 years, Tom
Messina has owned and operated a popular 24-hour diner in Denver, Colorado. He
had always planned to pay for his retirement by selling his restaurant. Tom
just turned 60, and he was looking forward to following his lifelong plan and spending
time with his family. The prospective buyer planned to build apartments and
shopping on the property, which fit well with the neighborhood’s mixed-use
urban zoning plan.
Then a handful of neighbors decided
they’d rather see the restaurant stay as-is. As reported by Reason
last week, a small group of community members filed paperwork asking the city
to deem Tom’s restaurant “historic,” meaning the small business owner would be
prohibited by law from redeveloping the property. Such a designation would
destroy the property’s value and ruin Tom’s retirement plans. It would also exacerbate
Denver’s housing problems, since it would prevent much-needed additional
housing from being built.
Unfortunately, there are
copious examples of “historic preservation” ordinances devastating property
rights throughout the country. Earlier this year, we blogged
about why the owner of Strand Book Store in New York City opposed the government’s
attempt to designate her building a city landmark because doing so would make
it nearly impossible for her to sell, alter, or even improve or repair the
building. (Since then, New York City did indeed designate the Strand as a city
landmark—something its owner calls “a
punishment.”)
In 2006, Arizonans
overwhelmingly approved Proposition 207, written with help from the Goldwater
Institute. By far the strongest protection for property rights in the nation, the Property Ownership Fairness Act requires
government to pay owners when its regulations eliminate their property rights. In
other words, while owners can be barred from polluting, maintaining dangerous
conditions on their property, or using their land in ways that violate the
rights of their neighbors, they can’t be prohibited from renovating, improving,
or developing their property unless the government pays them for taking way
those rights.
By forcing officials to
consider the costs of regulations that aren’t necessary to protect the public’s
health and safety, the Act has sent a message that governments can’t take away people’s
property rights to serve special interests. Only two years after Arizonans enacted
Prop 207, Arizona’s largest county, Maricopa County, issued a moratorium on
building permits for properties near Luke Air Force Base. The suspension had a devastating
effect on property values: The value of newly zoned vacant residential lots
dropped 95 percent, while existing home values were halved.
Property owners suddenly
found themselves barred from renovating their properties, forbidden to install
pools in their yards, mount solar panels on their roofs, or undertake urgent
electrical and plumbing repairs. Building new homes was out of the question.
Air Force veteran Robert Landers was told he could not install the therapeutic
spa his doctor had prescribed to him to help recover from surgery. As a result
of the moratorium, more than 175 property owners filed nearly $20 million in
claims for compensation. The county, faced with the true costs that its
regulation had imposed, rescinded its freeze on permits.
Changing the rules in the
middle of the game unfairly prevents property owners like Robert Landers in
Arizona and Tom Messina in Colorado from pursuing their plans and leaves them
with plummeting property values. That’s because costs of regulation are always
eventually borne by somebody.
Proponents of restrictive
zoning policies talk of the importance of “preserving neighborhood character.”
But using the heavy hand of government to “militantly preserv[e] their way of life and physical
surroundings” imposes immense costs
on neighborhoods and individuals who lack the resources or political aptitude
to fight back.
States should follow
Arizona’s example and adopt commonsense protections for property rights,
fairness, and the rule of law. If there is sufficient community interest in
“historic preservation,” then the public should pay the property owner for the
costs of imposing those aesthetic preferences. If the price is too high for the
community, then it certainly shouldn’t be borne by the property owner alone.
Christina
Sandefur is the Executive Vice President at the Goldwater Institute.
(Photo courtesy of YouTube.)
