Property and TheftArguably, one of the main reasons we permit government to exist is to help protect our property from theft by rapacious others. So it is particularly disturbing when government itself gets into the act of taking away people's property without just compensation. As in the Drug War, the cops are becoming the robbers. And as with censorship and affirmative action, the government is violating the Constitution (in this case the Fifth Amendment).
Consider the case of a couple in Washington State who had the bad luck to own a beautiful farm, mostly ash groves and pastures. The state built a highway nearby, and a badly planned drainage channel backed up and turned the pastures into a bog. Did the state compensate the owners for the damage done to their property? Far from it. Instead, it labeled the bog a "wetland." And since you can't farm on a wetland, it then canceled the land's agricultural status, recalculated the tax rate, and demanded $8000 in back taxes.
And how about the case of Mr. John Thorpe of San Fransisco? Thorpe tried to get a permit to build on a piece of property he owned, but the U.S. Fish and Wildlife Service told him he couldn't. Why not? Because a marshy area in the lower part of his land was designated as habitat for the endangered salt marsh harvest mouse. Thorpe altered his building plans to build on the higher ground instead. But he couldn't do that either. Why not? Because when global warming melts the polar ice caps and causes the level of the ocean to rise, the poor salt marsh harvest mouse will run to the high ground to escape. Thus it too must be considered habitat for the mouse. (This is a true story, given in The Detroit News, July 17th, 1992.)
Washington State had a ballot issue last November (Referendum 48) that would have required just compensation for regulatory takings. Foes of the issue warned that the law would cost local governments between $278 million and $899 million a year, and that ultimate lifetime compensation costs would be between $3.8 billion and $11 billion. What these figures represent, of course, is the value that governments in the State of Washington expect to illegally wrest from property owners in the future.
Current legal standards typically specify a percentage threshhold by which the value of a piece of property must be reduced before a regulatory "taking" can be said to have taken place. This is bizarre. If any reduction in value has occurred, a taking has been made. The percentage should simply indicate the amount of compensation that is due the owner.
I am familiar with the point (made by my friend Paul Danish, among others) that government can also hand out "givings" which increase an owner's property value, for instance by re-zoning property or building a nearby highway. But since the government is also going to collect higher property taxes in perpetuity from that point forward, I tend to discount this. Government can only be an "Indian giver," by which I mean one who gives in the same manner that the U.S. Government typically gave to the Indians.