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SR-20080429-8C~~ ~;tYaf City Council Report Santa Monica`° ~'~~ ~a8 City Council Meeting: ""-~'~- Agenda Item: ~, ~' ~ To: Mayor and City Council From: Marsha Jones Moutrie, City Attorney Kathryn Vernez, Assistant to the City Manager for Community and Government Relations Subject: Resolution opposing Proposition 98: Limits on Government Authority: Initiative Constitutional Amendment; and supporting Proposition 99 Recommended Action Staff recommends that the City Council: 1. adopt a resolution opposing Proposition 98: Limits on Government Authority: Initiative Constitutional Amendment; and supporting Proposition 99: Eminent Domain: Acquisition of Owner-Occupied. Residence Constitutional Amendment; 2. direct staff to send copies of the resolution to Governor Schwarzenegger, California State Senator Kuehl, California State Assemblymember Julia Brownely and the League of California Cities; and 3. direct staff to educate the public on these Council positions via the website and appropriate links to other governmental agencies where information is available. Executive Summary Proposition 98 on the June 2008 ballot is a measure that would eliminate rent control and renter protections, threaten land use planning and jeopardize laws that protect the environment including efforts to ensure a reliable water supply of clean safe drinking water. The impact on City laws and regulations would be enormous and the list of City activities put at risk is long. Proposition 99 also appears on the June 2008 ballot and is an eminent domain reform measure that will constitutionally protect homeowners without the adverse consequences of Proposition 98. 1 Discussion Proposition 98 Proposition 98 would amend Article I, Section 19 of the State constitution, which regulates the government's condemnation of private property through the process of eminent domain. This process entails a governmental agency "taking" private property fora "public use" upon payment to the owner of "just compensation." Historically, governmental agencies have exercised this power in order to secure property for traditional public works, such as roads and schools. However, over time, court decisions have authorized expanded use of the process to include government facilitation of private development which will benefit the community generally by fostering urban redevelopment. Thus, for instance, in recent years, government entities have exercised their power of eminent domain to acquire property, including homes, for private developments, such as retail outlets, which would benefit the public by locally enhancing economies and tax revenues. Property rights advocates have responded to this trend by proposing initiatives restricting condemnation powers. In November of 2006, California's voters narrowly rejected one such measure, Proposition 90. It would have prohibited the use of eminent domain and severely restricted local power to control land use. Proposition 98 was developed in response to the failure of Proposition 90. like its predecessor, Proposition 98 would prohibit the use of eminent domain for urban redevelopment. It would also expressly invalidate rent control ordinances throughout the state. Further, it would amend the California Constitution to add a provision allowing property owners to sue to obtain compensation for or invalidation of regulations that impose costs on property owners, even if the regulated activity constitutes a nuisance, threatens the public health or safety, or harms the environment. Additionally, Proposition 98 would impose a sweeping prohibition against regulation of the use of real property enacted "in order to transfer an economic benefit to one or more private persons at the expense of the property owner." 2 The potential impact of Proposition 98 upon Santa Monica is enormous. In general, it would severely restrict the City's power to promote the general health, safety and welfare through the Rent Control Law and through land use, environmental, and other regulations effecting real property. The extent of the measure's impact is difficult to predict because Proposition 98's language is broad and general. Judicial interpretation would certainly be required. And, if the measure passes, a protracted flood of litigation is inevitable. However, since the Initiative's purpose is clearly to expand private owners' rights, it is likely that courts will interpret the measure to expand the class of impermissible regulatory takings and thereby limit local powers. Moreover, whether challenges to local regulations would be limited to future enactments is also uncertain. Proposition 98 does not specify. Therefore, if it passes, existing local Taws may be subject to challenge. Whether or not the measure operates solely prospectively, there will be years of uncertainty and massive litigation costs. As to rent control, Proposition 98 would prohibit rent level controls as to new tenants occupying their units after passage of the measure. And, many current protections mandated by the City's Rent Control Law would be at risk. For instance, just cause eviction protections may be prohibited by Proposition 98. Likewise, Ellis Act protections such as relocation requirements and extended occupancy periods for the elderly and disabled may be prohibited. Also, removal permit requirements may be invalidated by the proposition. And, it may also invalidate limitations on the owner occupancy exemption, which now requires a 50% interest in the property to qualify for the exemption. The impacts on other City regulations would also be enormous. Because the City is small, dense and fully developed, preserving qualify of life requires constant balancing of competing interests. This is an ongoing challenge which the City meets by carefully administering extensive regulatory processes which apply policy formulated through a public process in a manner that protects property owners' rights. Thus, for instance, 3 the City regulates the location, density, design, height and extent of development. Likewise the City ensures community welfare by imposing development fees to address impacts and engaging in long-range planning. In the long run, these and other regulatory processes protect and enhance the value of all private property within the City. Nonetheless, all of these City activities -widely recognized as appropriate and necessary -may be subject to challenge under Proposition 98. The list of city activities at risk is long indeed. In addition to the traditional zoning activities noted above, the City protects its invaluable historic resources through its landmark process. And, the City protects unique coastal resources through various regulations. The types of laws and regulations that could be impacted include a wide range of environmental protections including those that curb global warming and protect open space, public water projects that involve "consumption of natural resources" thus possibly precluding statewide public water projects. These activities are put at risk by Proposition 98. In summary, while the exact impact of Proposition 98 on Santa Monica is impossible to predict, general consequences appear certain. The measure would mandate a phase out of local rent control laws and, depending upon judicial interpretation, could eliminate many tenant protections enacted by the voters, the City Council and the Rent Control Board. And, by depriving the City of its ability to strike and adjust the delicate balance between individual property rights and the common good, Proposition 98 would divest the City of its ability to protect the health and safety of its residents and the quality of their lives. Proposition 98 Proposition 99 also appears on the June 2008 ballot. It is an eminent domain reform measure that will constitutionally protect homeowners, without the adverse consequences of Proposition 98. Proposition 99 is supported be a broad coalition of homeowners, business, labor, cities, counties and environmentalists who also oppose 4 Proposition 98. (Attachment B) This measure will prevent government from taking a home through eminent domain to be transferred to a private developer. This reform provides protections for California homeowners, and unlike proposition 98, it would not eliminate rent control. and renter protections or cause the other adverse consequences of Proposition 98. Financial Impacts & Budget Actions There is no fiscal impact from the recommendations in this report and no additional budget authority is required to educate the public as recommended. Prepared by: Approved: Ka~hryn Vernez, Assistant to the City Manager for Community and Government Relations Forwarded to Council: P. 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Wht Employment Rights (POVVER? Ethnic Natonal Coakiwt of Hrspu%c Orgarezafiw>S Black, Avian, nihiarm• arxi Fthtic Renaissuxe CDC Sarth Atian Nehvork ~Iffit'_L Assoc'sa6On vi Ca6twrra 1Vater Agerxies Sogcxrl Beek Water L°Msirict Vsta hrigation 1Ts[rict ~ -C 'fag/a g No on 98 -The Attack ®n Renters, Seniors, Vi/orking Families and the Environment Yes on 99 -The Homeowner Protection Act Proposition 98: the Landlords' Deceptive Attack on Renters. • Prop. 98 would strike a devastating one-two punch that would crush California renters including millions of seniors, widows, veterans and young families. • First, Prop. 98 eliminates important renter protections, like laws protecting renters against unfair evictions. Second, Prop. 98 eliminates rent control. • Prop 98 gives landlords new powers and incentive to kick out renters, vacate the unit and eliminate rent control protections so they raise rents. • Prop. 98 also eliminates renter protections like laws requiring the fair return of rental deposits. Wealthy Landlords Put 98 on the Ballot for Their own Financial Gain. Prop. 98 is the worst kind of dishonest, special interest proposition there is. Wealthy apartment and mobile home park owners spent millions to get Prop. 98 on the ballot. More than 80% of funding behind Prop. 98 comes from landlords. These landlords don't care about eminent domain. That's just their smokescreen to try to trick voters into abolishing renter protections and eliminating rent control. Hidden Agendas Hurt the Environment, Water Quality and Supply, and Our Economy. The problems with Prop. 98 don't stop with abolishing renter protections. Hidden provisions: - Gut Environmental Protections, like laws we need to combat global warming, and protect our land, air, water and coasts. EVERY leading environmental organization in California OPPOSES 98. - Jeopardize the Quality of our Drinking Water and our ability to secure new sources. of water to protect our environment and fuel our economy. That's why the CA Chamber of Commerce, Western Growers Association and Association of California Water Agencies OPPOSE 98. - Result in Frivolous Lawsuits, Higher Taxpayer costs, and Hurt our Economy. Prop. 99 -Real and Powerful Eminent Domain Reform With NO HIDDEN AGENDAS. • Prop. 99 would prohibit government from taking our homes to transfer to a private developer. • Prop. 99 protects homeowners from eminent domain, with no hidden provisions. Proa. 98 is opposed by srouas like: • AARP • League of Women Voters of California • California Professional Firefighters • Tenants Together • Coalition for Economic Survival • Coalition to Protect California Renters • Golden State Manufactured Home Owners League • National Wildlife Federation Prop. 99 is supported by ¢rouos like: • League of California Homeowners • Tenants Together • California Alliance for Retired Americans • California Fire Chiefs Association • League of Women Voters of California • National Coalition of Hispanic Organizations • Coalition for Economic Survival • California League of Conservation Voters • California Fire Chiefs Association Paid for by No 98IYes 99, Californians to Stop the Prop 98 Attack on Renters and in Support of Prop 99, the Homeowners Protection Act. A committee of seniors, homeowners, taxpayers, renters, educators, business, labor, environmentalists, local government and public safety, League of California Cities (Non-Public Funds) and Califomians for Neighborhood Protection: Yes on Prop 99, Noon Prop 98, a sponsored committee of conservationists and labor 1121 L. Street, Suite 803 -Sacramento, CA 95814 - 916.443.0872 -www.No98Yes99.com www.rvo7ares7y.com Reference Resolution No. 10284 (CCS).