SLOAN | Amendment 74 aims to give property owners peace of mind

Author: Kelly Sloan - October 18, 2018 - Updated: October 17, 2018

Kelly Sloan

Back in 1961, the Animas Valley Sand and Gravel Company sought to acquire about 50 or so acres of land in La Plata County for the purpose of, you guessed it, producing and selling sand and gravel. Insofar as there existed no law or regulation proscribing their doing so on the acreage in question the land was in due course purchased, for a price reflecting its intended use.

Some 12 years later, the La Plata County Board of Commissioners enacted a master land use plan which, for various reasons, mostly aesthetic, re-zoned much of the land, precluding all but eight acres from being mined for sand or gravel. The property owners argued in court that this constituted a “taking” by government in that it reduced the value of their land substantially. In 2001 the Colorado Supreme Court ruled that since the land retained someof its original value (about 10 percent), the government’s regulatory imposition did not merit compensation. In other words, since the county did not completely de-value these people’s property it owed them nothing for the amount by which it did de-value it.

The Fifth Amendment to the Constitution concludes with the words, “nor shall private property be taken for public use, without just compensation.” It is not difficult to envision that the above scenario is representative of the kind of injustice that clause was meant to oppose and is exactly the kind that Amendment 74 is intended to resist.

The concept of government compensating owners for expropriated property is neither a new nor exotic concept in Western legal tradition. Buttressing the Fifth Amendment, Colorado’s state constitution includes a section which reads: “Private property shall not be taken, or damaged, for public or private use, without just compensation.”

Proposed Amendment 74 inserts after the word “damaged” in that sentence the single clarifying line “or reduced in fair market value by government law or regulation.” Even that concept, of regulatory taking, is not entirely novel, having long been recognized by the courts. At issue is the gradation of taking – whether the government ought to compensate a property owner when an imposed regulation reduces a certain amount of a property’s real value, or only, as the court regrettably interpreted in 2001, when said regulation reduces all of its value.

The late Justice Antonin Scalia once wrote that “the law should not take the position that there is nothing between taking a property and otherwise affecting it.” What Amendment 74 does is simply to tell the court to sharpen the distinction; if you purchase a piece of property under the assumptions in place at the time of that purchase, and the government, state or local, subsequently imposes a regulation changing those assumptions, the effect of which is to diminish all or part of the value of that property, then at least you ought not be automatically precluded from seeking redress or compensation under the takings clause.

As you can imagine, this is attracting grief from corners for which the security of private property is not the dominant concern. The fanatical environmentalists and other left-wingers, of course, hold the rather dispositive view that private property, if its existence is to be suffered at all, must be subordinate to collective concerns. Others, mainly certain local governments, take a less ideological view, but harbor deep-seated fears of an avalanche of litigation erupting from aggrieved property owners in the wake of the amendment’s passage.

Here the opposition is guilty of a little casuistry. The new law will be tested in court, to be sure; but the measure is deliberately non-prescriptive and thereby avoids sweeping aside legal precedents, direction, and requirements established by the courts for advancing such cases. Home rule authority is unhindered, for instance, as is the general prohibition on class action takings claims and the seeking of speculative damages, i.e. seeking compensation for loss of potential value.  It is commonly understood, for example, that if one were to erect the Statue of Liberty on one’s property that would cause its value to escalate, but a local prohibition against doing so would not justify a claim of diminished inherent value.

In explaining the importance conservatives attach to the concept of property rights, Russell Kirk wrote “separate property from private ownership and Leviathan becomes master of all.” Someone else once remarked that the aim of socialism is to forever render private property insecure. One hopes Amendment 74 may hinder, if not check, the steady erosion of private property rights that has been endemic in America; for if Coloradans are to retain some sense of security of their property in the face of nearly constant assault, this is the most prudent and constitutionally responsible way to go about it.

Kelly Sloan

Kelly Sloan

Kelly Sloan is a political and public affairs consultant and recovering journalist based in Denver. He is also an energy and environmental policy fellow at Centennial Institute.