PAYING PROPERTY OWNERS FOR ECONOMIC LOSSES
State and local governments pass laws and other rules to benefit the overall public health, safety, or welfare of the community, including its long-term economy. Arizona’s Private Property Rights Protection Act (Proposition 207) remains one of the strongest pro-property-rights laws in the nation. It requires government to compensate owners for land use regulations that reduce property values. A group of Maricopa County land owners near Luke Air Force Base in Arizona is a perfect example of the importance of these protections.
In August 2008, the county adopted a building moratorium, stopping all new building permits from being issued. A family that lives there can no longer put a pool in its backyard, install solar panels on its roof, or do basic electrical or plumbing work, let alone add a garage or start construction on a new home.
While Arizona’s counties are given authority to restrict land uses, Proposition 207 requires them to compensate the owners. Thanks to that law, landowners around the Air Force base will not be forced to shoulder the costs of the county’s building moratorium.
The Goldwater Institute has recently filed claims for compensation with the county under Proposition 207 on behalf of more than 175 landowners. These claims illustrate exactly why the voters enacted Proposition 207, to protect owners from unfairly losing property rights to government land laws. But how much would the government have to pay property owners? Current law requires government to pay “just compensation” to the owner before taking property. Just compensation includes money to reimburse the owner for the property’s “fair market value” (what the property and its improvements would sell for on an open market), plus any reduction in the value of remaining portions of the parcel that government did not take. State law also requires government to compensate property owners and renters for moving costs and some business costs and losses. The measure appears to increase the amount of money government must pay when it takes property. Under the measure, for example, government would be required to pay more than a property’s fair market value if a greater sum were necessary to place the property owner “in the same position monetarily” as if the property had never been taken. The measure also appears to make property owners eligible for reimbursement for a wider range of costs and expenses associated with the property taking than is currently the case.
Octavian D. Curpas
Phoenix, Arizona
february 2009
