As we mentioned here, here and here, California Proposition 90 is the most deceptive, destructive and potentially devastating measure on the November ballot. Billed as an effort to “stop eminent domain,” it would actually make it impossible for state and local government to take any action to constrain the unrestrained free market. The inevitable consequence of Prop 90 would be runaway gentrification that will displace all low-income people from San Francisco and other cities. For example, if Prop 90 were to pass, San Francisco’s Proposition H (a modest increase in relocation assistance for tenants in no-fault evictions) would probably be ruled unconstitutional.

In order to understand the effect of Prop 90, a distinction needs to be made between a “physical taking” and a “regulatory taking.” The federal and state constitutions both prohibit the government from taking someone’s private property for public use without just compensation. Eminent domain (where the government literally seizes your property) is a “physical taking,” and under current law the property owner must be fully compensated. But a government regulation (such as zoning laws, rent control, or historic preservation ordinances) is only a “regulatory taking” if it leaves the owner with no viable economic use for his or her property. So San Francisco and other cities can set limits on real estate developers for how tall a building they can build, whether a certain percentage of the units must be affordable, and how much parking needs to be provided – and as long as the developer can still make a decent profit, it’s constitutional.

Prop 90 amends the California Constitution to redefine a “regulatory taking.” If it passes, any new statute, ordinance or government regulation that could cause “substantial economic loss” will be classified as a taking. Take, for example, San Francisco’s Proposition H. Although rents in San Francisco for newly vacated apartments have nearly doubled in the last 10 years, the relocation assistance that landlords must pay tenants when they evict them for a “no-fault” reason has remained stagnant at $1000. Today, $1000 couldn’t get you a first month’s rent on a studio in this city, let alone the move-in costs of last month’s rent plus security deposit. In response to this crisis, Prop H would increase the relocation assistance to $4500, and provide an additional $3000 for tenants who are elderly, disabled or have children.

But such an increase would be a “taking” under Prop 90. Even if a landlord could still make a profit after paying the additional relocation assistance, they could turn around and sue the City for having incurred a “substantial economic loss.” Imagine a group of real estate speculators who buy a small apartment building in San Francisco, evict the tenants for “owner move-in” and then re-sell the building at twice the purchase price. Prop 90 would ignore the fact that the owners have made an obscene profit, but would make it illegal for the tenants to receive a small increase in relocation assistance because that would be a “regulatory taking.”

Supporters of Prop 90 argue that it exempts regulations that are directly passed for “public health and safety.” But that is an extremely narrow exception that would still invalidate most regulations of private property. Most regulations are justified to promote the “general welfare,” like Proposition H, and so would probably be unconstitutional under Prop 90’s new definitions.

When you look at who’s behind Prop 90, it’s not a surprise that it’s truly the “end of government” initiative. Howie Rich, the New York Libertarian millionaire, placed Prop 90 and other similar initiatives in six states this November because he hates government regulation. A real estate investor, Howie Rich would plan to make millions throughout the country if his agenda is implemented – and the rest of the world be damned.

California can send a powerful message this November and soundly reject Prop 90. In San Francisco, we cherish our city’s most vulnerable tenants, don’t want to see them priced out of our city, and we don’t appreciate outsiders coming in to tell our local governments what we can and can’t do to protect them. For the sake of Prop H, and other sensible measures down the road, Prop 90 must be defeated.

For feedback, contact paul@thclinic.org