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The ownership and use of private property is a fundamental right that distinguishes us as a free people. The framers of both our national and state constitutions understood the importance of protecting that right. The Fifth Amendment of the Bill of Rights states, "No person shall be…deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation." Article 1, Section 17 of the Michigan Constitution asserts, "No person shall be…deprived of life, liberty or property, without due process of law," while Article 10, Section 2 holds, "Private property shall not be taken for public use without just compensation…" So with both federal and state constitutional protections, why are private property rights endangered in Michigan? Because government has found an easier way to take private property through regulatory takings.
Regulatory takings are an effective way for lawmakers and bureaucrats to pursue their policy goals without having to pay for them by restricting the right of property owners to use their property with the promise that a common benefit will be realized by the general public (although there is often times disagreement as to the extent or even the value of the benefit). But someone has to pay for those benefits. Government officials with more good intentions than money have discovered a convenient source of funding at the expense of private property owners. The following are examples:
Wetland Laws — A property owner is denied the use of his property to build a home because wetlands would have to be filled. The courts have generally ruled that unless the loss of property use approaches 100 percent, the owner is entitled to no compensation, even though this property may be virtually useless for its intended purpose. The benefit of protecting wetlands is realized by the public at large, but the entire cost is borne by the landowner.
Zoning Ordinances — A small business owner opens a coffee shop, but a city ordinance prohibits him from placing the kind of sign he wants on his property advertising the business. His ability to operate his business and generate a profit has been seriously harmed. Even though the value of his property is diminished, he receives no compensation but is expected to bear the cost of a supposed "esthetic value" realized by local residents and visitors to the area.
Smoking Bans — A family owned restaurant has been operating successfully for years, providing for the needs of its customers with both smoking and non-smoking areas. The state passes a law that bans smoking in all restaurants. The cost of that law is borne by the restaurant owner who looses the business of customers who smoke. The government is now making business decisions for him and eroding his private property rights.
It is politically expedient to pass laws promising benefits for the majority at the expense of the minority, those being the individual property owners subject to the regulation. Our elected officials instead should be committed to protecting individual freedom through strengthening private property protections. In the absence of leadership by elected officials, Michigan residents may be forced to go directly to a ballot initiative so voters can decide if they want their private property protected from government regulatory taking. Florida, Arizona and Oregon already have passed strong protections against regulatory takings. Voters in Oregon overwhelmingly approved a ballot measure that is elegant in its simplicity. The measure stipulates that when government imposes a restriction on the use of private property, it has to pay the landowner for the lost value as a result of that restriction. If government chooses not to or cannot afford to pay the landowner, the restriction is invalid.
Taxpayers usually are not concerned about protecting private property rights until the government takes an action that affects them directly; by then it may be too late. Michigan property owners should demand that their private property be protected from regulatory taking.
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Russ Harding is senior environmental policy analyst for the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the author and the Center are properly cited.
The Mackinac Center for Public Policy is a nonprofit research and educational institute that advances the principles of free markets and limited government. Through our research and education programs, we challenge government overreach and advocate for a free-market approach to public policy that frees people to realize their potential and dreams.
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