Photo by wfyurasko on Flickr.
On Tuesday, Virginians will vote on a statewide ballot measure, Question 1, that would amend the Virginia Constitution to limit the government’s ability to exercise eminent domain. As written, this amendment has severe unintended consequences, and readers should vote against Question 1 to prevent greater costs to all our infrastructure.
Greater Greater Washington has already endorsed a no vote on this amendment. The editors pointed out that this amendment is worded poorly, is unnecessary given laws that have already been enacted, and would make public projects prohibitively expensive.
Furthermore, it would make public-private partnerships involving eminent domain almost impossible, hindering critical projects such as the Metrorail Silver Line, the new 495 HOT lanes, or many worthy economic development projects.
Eminent domain, the government’s power to acquire private property for public use, is central to state and local government’s ability to build infrastructure and facilities — things like transit, roads, parks, schools, and police precincts. In 2005, the US Supreme Court in Kelo v. City of New London also upheld a long-standing government practice: acquiring land and transferring it to a private developer for an economic redevelopment project. However, the Court also left states with the power to restrict this practice.
Since Kelo, a concerted, partisan response in many states has sought to severely limit the government’s power to conduct its business through eminent domain, and to undermine urban planning in general. Question 1 is Virginia’s version of this partisan effort, with Virginia’s Attorney General Ken Cuccinelli advocating in favor. While proponents frame it as a “property rights” issue, make no mistake: this amendment goes too far and tries to slip in significant roadblocks to all public projects that use eminent domain.
If the goal is to prevent the kind of eminent domain use in Kelo, then Question 1 isn’t necessary. Virginia already enacted laws to address this in 2007. What this amendment does is open up a Pandora’s Box of problems that proponents have failed to address. These problems are why the Virginia Municipal League, Virginia Association of Counties, and mayors across Virginia strongly believe Question 1 is a setback for building needed infrastructure and hinders the ability to create strong and vibrant communities.
First, Question 1 would interfere with innovative projects in transportation by limiting eminent domain in any setting that would be “for profit.” Immediately, this language would obstruct and likely stop most transit-oriented development projects, redevelopment along transportation corridors, toll roads, or other projects that uses “public-private partnerships” — projects where the government and private sector collaborate. These types of projects have traditionally enjoyed bipartisan support in Virginia and nationwide. Nonetheless, Question 1 would prevent such projects.
This would thwart projects like Metro’s Silver Line expansion to Dulles Airport where part of the financing comes from public-private partnerships. Other projects, like the 495 Express Lanes, would face challeges because they involve the government and private sector collaborating over toll revenues. In short, Question 1 unnecessarily interferes in government’s ability to collaborate with the private sector to innovate and improve our transportation and public facilities.
Secondly, the broad wording of this amendment requires the state to compensate owners for “lost access” from a literal taking, or “damage” a project causes. This wording sets a dangerous path. It is a cousin of the argument that the government should compensate property owners for decreased property values that result from any government action, like building a affordable housing or high school in a neighborhood, even if there is no physical impact to the property.
A fast food restaurant owner might claim that a median (or transit line) prevents cars from turning directly into his or her drive-thru and thereby claim “lost access” compensation. Consider how the median and new Metro Rail line along Route 7 near Tysons Corner has reduced direct access to some of the surrounding shopping centers out of geographic necessity. Under this amendment, the property owners could potentially claim compensation because cars can’t directly turn into their shopping centers like they used to.
The amendment is written vaguely enough that a court might agree with this hypothetical fast food restaurant owner. Some have argued that courts might reject this broad interpretation, but we do know that litigators will be pushing the limits of this new constitutional wording. Projects would get bogged down in more costly litigation until courts sort this out, and if the broader interpretation wins out, it would increase every project’s costs into the future.
Finally, Question 1 also requires the government to compensate property owners not only for their property’s value, but also for “lost profits.” For example, farmers would not only get compensation for their land at market value, but also for profits they may (or may not) experience in the future from sales of their produce. While a noble goal, there is a fundamental math problem with this logic. The future profits of a piece of real estate, like a farm or factory, already factor into its market value: economists call it “capitalized value.”
This is why a high-yielding farm sells for more than a low-yielding farm, all other things being equal. The existing norm of compensating at market value already addresses these potential profits, so requiring additional compensation is economic double-counting. Furthermore, profits are speculative, which is why the Virginia Supreme Court has rejected claims for lost profits and lost access for over 100 years.
Ultimately, Question 1 would limit public projects by increasing costs and encouraging frivolous litigation. In the end, we all pay for this when the cost of building public infrastructure increases drastically. This amendment goes beyond simply protecting private property rights. It would nearly kill, or at least severely inhibit, public-private partnerships to build infrastructure, thus requiring more government bonds and debt to build. It would also increase the cost that we Virginians pay for our transit, roads and other infrastructure.
Do not be fooled. A vote in favor of Question 1 is a bad deal for Virginia’s infrastructure and the future of our communities. Please vote NO on Question 1 this Tuesday.