Monthly Archives: June 2012

Lowball Watch — Nevada

The Las Vegas Sun reports the settlement of an eminent domain action by the city of Henderson. Connor Shine, Henderson to Pay $500,000 to Settle Eminent Domain Suit, Las Vegas Sun, June 5, 2012.  Click here.  

The taking was of 4.6 acres for a sewer easement, plus a road that would serve M Resorts, and “the stalled Inspirada development.” The city evidently settled because it feared that a trial would result in much higher figures than its offer, which would also require it to pay the owner’s attorney fees in addition to the value of the taken land.

The city offered $883,400, and the owner demanded $7 million. The final settlement figures were: $500,000 paid by the city in addition to its $883,400 offer/deposit, plus another $1,000,000 paid by M Resorts, for a total of $2,483,400.

They’re Singin’ Our Song: California Land-Use Laws Hamper the State’s Recovery

For some time now we have been taking note of the fact — spotlighted several years ago by Dartmouth economics Professor William Fischel — that the high cost of housing in California is to a large extent the product of an onerous land-use regulation regime that disfavors construction of housing where people want to live. Now, along comes Professor Steve Clowney, with a post on the Property Prof blog, of May 18, 2012. Click  here. He takes note of a recent article in Forbes.com, reporting that, on the one hand, there is a shortage of engineers and computer geeks in the Silicon Valley area, but on the other hand, local high-tech enterprises willing to pay higher salaries are unable to attract qualified engineers to do the job. Why? It turns out that the technical folks are no dummies, so they won’t leave their present locations (where, ironically, there may be a job shortage) because they see the cost of housing in the Bay Area as a disincentive to moving.

The high cost of housing causes those already in place up there to demand (and get) higher pay for their goods and services, to allowthem to handle the increased cost of housing. So any newcomers may get higher pay from the employee-seeking high-tech Silicon Valley outfits when they move in, but it is consumed, and then some, by the increased cost of living (which includes a higher cost of housing).

Follow up. An article in the June 10th issue of Los Angeles Times (click here)  reports that there is a shortage of homes fopr sale in California — at least in places where people want to live, not in the boondocks where overpriced homes were built and sold to suckers during the “bubble.” That explains why home prices in California remain unreasonably high.

SCOTUS Likes “Moral Hazard” — Conscientious Property Owners Get Screwed Again

Take a moment to peruse the brand-new opinion of the Supreme Court in Armour v. Indianapolis, No. 11-1616, June 4, 2012.  Click here.  It’s on the subject of property taxation — the kissin’ cousin of eminent domain valuation, and here too the Supreme Court’s majority displays the sort of the-government-can-do-no-wrong attitude we have come to know and despise in eminent domain cases (particularly those raising a right to take issue, where anything that is merely “rationally related to the conceivable” is deemed good enough to justify takings of private property for transparently private uses in violation of the “public use” limitation of the Fifth Amendment).

What happened here was that Indianapolis had imposed an assessment for a new sewer line, that could be paid by the assessed land owners either as a lump sum or on an installment plan. A number of land owners did the former. Then the state changed the law, so the city informed the owners who were still paying off the assessment, that there was no liability on their part, so they could forget about paying the balance of their assessments. But what about us, said the owners who had already paid the whole amount in a lump sum? Tough, said the city — we’re keeping your money. So those folks, feeling aggrieved, sued. They won in the lower state courts, but the Indiana Supreme Court, a court that rarely sees a case of a landowner vs. the government that it likes, reversed. Now, a SCOTUS majority has affirmed that holding.

How did they do it, given the blatant disparity of treatment of the two groups of identically situated property owners? Easy. The city said it would be too inefficient, i.e., too much trouble to refund the money, and that was good enough for the court’s majority. Unsurprisingly, the opinion is by Justice Breyer, and is concurred in by Justices Ginsburg, Kagan, Sotomayor, Kennedy and — surprise, surprise — Thomas. The Chief Justice dissented, along with Justices Alito, and Scalia who concurred in the Chief’s dissent.

We always thought that the wretched Kelo case was the ultimate in the Court’s majority’s  the-government-can-do-no-wrong attitude, even when the beneficiaries of the government action in question are favored private individuals. But this one is right up there, and in terms of demonstrating such a judicial attidude of pro-government favoritism, runs neck-and-neck with Kelo. This much seems clear to us when we reflect on the uncontested fact that the way the city did it, some of the land owners assessed for the same project wound up paying 30 times as much as others, in spite of the fact that the state law in question required equality of treatment of the assessed property owners.

And that, folks, is equal protection of the law as seen by the Magnificent Nine.

Bubble, Shmubble — California Housing Is Still Too Expensive

From the Los Angeles Daily News — click here.:

“The [National Homebuilders A]ssociation said the Los Angeles-Glendale-Long Beach market ranked fourth in the nation for expensive housing. Which helps explain the $350,000 median price of a San Fernando Valley home in January, according to the Southland Regional Association of Realtors.

“Factor in Irvine coming in fifth, San Diego at No. 7 and San Jose at No. 9, and California accounted for six of the 10 least-affordable housing markets in the nation, according to NHBA.” Emphasis added.

Ghost Writers in the Sky

For an interesting article on the subject of judicial opinions increasingly being ghost-written by judges’ clerks, check out the column in the New York Times by  William Domnarski, Judges Should Write Their Own Opinions, May 31, 2012 — click here . The problem is that judges are appointed to judge — to create the decisional law they prescribe for society. But on the other hand, the judicial workload has increased dramatically over the decades, and that makes it difficult, if not impossible, at least for most judges, to write all opinions they sign.  But the problem is that however able their clerks may be, nobody appointed them to make judicial decisions, and as the late, lamented Robert S. Thompson of the California Court of Appeal put it, it is a bad idea to provide a publicly financed mechanism whereby weak judges are able to conceal the fact that “their” handiwork actually isn’t theirs.

We have written about some aspects of this problem and will have more to say presently. Suffice it to say for now that in the 1980s when the Supreme Court decided several important inverse condemnation cases, the Justices were filing some 150 opinions on the merits per term — a term being the nine months (October through June) when the court is in session and decides cases. Of course some work is being done on pending cases during the summer recess, but when it comes to opinion drafting, whether during the recess or the court’s term, the question is: who is doing the drafting, and to what extent do the clerks’ drafts represent the text of the final opinions that are eventually filed?

We are on the road at the moment, so we lack convenient access to some of the stuff that should be cited in this connection. We will attend to it in a few days by way of a follow-up to this post. In the meantime, do read Domnarski’s op-ed because it has some interesting things to say.

High Speed Railroad (Cont’d.)

The high-speed rail drama continues in California. To add to the high speed rail project’s woes, it turns out that California voters, having by now realized that they were snookered  back in 2008, when they voted for a $9 billion high-speed railroad between Los Angeles and San Francisco — a project whose estimated cost zoomed up to $98 billion but has now been scaled back to $65 billion — have now turned against it, and by a large majority, are opposed to building it, particularly at this time when the state is flat-broke. See Ralph Vartabedian, Voters Have Turned Against California Bullet Train, Poll Shows, L. A. Times, June 3, 2012 — click here . Most Californians would like to see another referendum on the “bullet train” project, and if it took place, 59% of them would vote “No.”

And that isn’t all. Yesterday’s L. A. Times brought the news that the  high-speed project is (predictably) being hit with several lawsuits demanding that the start of construction be enjoined, on the grounds, among others, that its environmental report is flawed. See Dan Weikel and Ralph Vartabedian, Bullet Train Hit With a Double Blow, L.A. Times, June 2, 2012, at p. AA1 — click here.. To add to this project’s woes, the Orange County Transportation Board has weighed in, pointing out that the priority in giving California a viable north-south railroad should be to close the gaps in the existing line, build up ridership, and then capitalize on it by adding a high speed railroad. It turns out that the existing north-south railroad has gaps between Palmdale and Bakersfield, so that if you want to go from Los Angeles to Oakland by rail (there is no railroad to San Francisco) you have to go as far as Palmdale, then take a bus to Bakersfield, and then do it again between Stockton and Oakland — all of which makes the trip last some nine hours, as compared to one hour by plane.

While all this is going on, the State if facing a multi-billion dollar budget deficit, which Governor Jerry Brown wants to close by asking Californians to vote for a tax increase.

Stay tuned.

ALI-ABA Land Use Institute Scheduled for August

The annual ALI-ABA Land Use Institute will take place this year in Chicago, on August 8-10, 2012, at the Millennium Knickerbocker Hotel. In addition to a variety of land-use topics, the program also covers updates on eminent domain and inverse condemnation law. This program has been running annually for decades, and is widely acknowledged as the best land-use CLE program. In addition to lawyers, it is also of interest to zoning officials and planners.

Apart from plenary presentations by a variety of speakers with various points of view,  there will also be concurrent breakout sessions on selected topics, including one on the Basics of Eminent Domain for attendees with a land-use background, who want to learn more about eminent domain. An ethics segment is included.

To enroll or to obtain the brochure, contact ALI-ABA, 14025 Chestnut St., Philadelphia, PA 19104-3099, telephone (800) CLE NEWS, or go to www.ali-aba.org/CU010.