Whose Property Is It?

Henry Ingram, Esq. Article Appears in the Pennsylvania Landowner - October 1995
Whose Property Is It?
Do we really have ask?

The emergence of property rights as a national and Pennsylvania political issue for the past five years has caused great hue and cry among environmental regulators, politicians and the anti-development/preservationist lobby. It was spawned in large measure by the growth of state and federal land-use regulation of the past two decades, which has sparked a firestorm of grass-roots agitation. Landowners around the country are upset with their government for denying them the free use of their land in the name of protecting endangered species, maintaining “Wild and scenic” Rivers, preserving wetlands, and establishing parks. Indeed, literally dozens of state and federal statutes and programs restrict the non-harmful use of private property.

Politicians and regulators are confused. They think: “Look at all the good we’ve done and now the voters are mad! What happened?” what happened is things just went too far in the system is out of balance.

Politicians began to wake up to the fact the ecosystems and biodiversity don’t pay taxes; and the shrill voices of the large anti-development organizations don’t always have the votes and they certainly don’t pay taxes. In fact it’s the other way around. They get tax dollars from you and me through direct government grants and other thinly disguised transfer payments. However it seems that the voices of hard-working, tax paying, voting, ordinary citizens are being heard.

A good example can be found in Indiana County where recently the County Commissioners voted down a contract to conduct a Natural Heritage Inventory funded in part by key ‘ 93 money. There was just too much public opposition. According to press reports, local citizens were concerned that an NHI would lead to even more excessive environmental regulations. This shows what can be accomplished if landowners stay awake and stay together. Americans believe deeply in the right to private property. According to Competitive Enterprise Institute, Democratic pollster spell Celinda Lake found that two-thirds of Americans believe that property rights are in adequately protected under current law. Similarly, while polls seem to indicate broad public support for current environmental laws, those same polls show strong public sentiment in favor of compensation for regulatory takings. A 1995 Roper-Starch poll found that 66 percent of Americans think that “The government should be required to compensate” individuals and businesses who suffer land devaluations due to federal wetlands and species protection regulations. Only 26 percent said the government should not.

Property rights organizations are now active in every state in the nation. As of October 1994, a dozen states had enacted property rights protections of some kind and legislation is being pursued in dozens of others including Pennsylvania. Property rights were an issue in the last election cycle. It is clear the candidates were not helped if they appeared to oppose increased protection of private property. Many believe that the issue of property rights increased the Republican majority in the House by at least ten seats. Remember the Contract with America?

The two federal laws and state counterparts responsible for the lion’s share of regulatory takings are the Endangered Species Act (”ESA”) and Section 404 of the Clean Water Act (”CWA”), the source of regulations severely limiting the development of privately-owned wetlands. However it would be a mistake to believe that these are the only to federal laws that unduly limit the use of private land. Any bill seeks to protect the property rights of Americans must cover all laws that deprive landowners of the reasonable use of their land. There is no rational basis upon which to pick and choose which laws, environmental or otherwise, should be covered. Regrettably, the bill that passed the House as part of the Contract with America applies only to a handful of laws.

Nonetheless, because the ESA and the CWA’s section 404 are the primary focus of landowner ire, they merit special attention. According to the General Accounting Office, over 75 percent of those species currently listed under the ESA rely upon private land for some or all of their habitat. In the case of wetlands, approximately three-fourths of the lands that meet the regulatory definition of “wetlands” are on private land.

Thus, as long as government continues to rely upon regulation to protect the so-called public resources, widespread conflict with private landowners will continue. Despite the public uproar over excessive regulations, restrictions on land-use continue to roll off the government red tape machines. Take a look at the draft management plan for the Allegheny River issued recently pursuant to the Wild & Scenic Rivers Act. It is certainly no model of sensitivity to private property rights. And proponents of “absolute protection” for the River are crying the blues because more federal (meeting tax payer) money is not available to lock up even more riparian private property. And keep an eye on this: The new Pennsylvania Department of Conservation and Natural Resources has announced $920,000 in “state grants” to governments and preservation groups for Rails-to-Trails projects in five counties in southwest Pennsylvania. The college state money but it is actually Key ‘93 money which comes from realty transfer taxes we pay. It will be used to facilitate the acquisition of more land for “public use. ” Why don’t we fix our roads or existing parks first? And although the Ridge Administration has marginally altered the application of wetlands regulations so as to blunt their impact on private parties, particularly small lot developers, the reform doesn’t go far enough.

The strongest opposition to the protection of property rights comes from representatives of the environmental, anti-development establishment. The standard charge against paying compensation for regulatory takings is that this would involve “paying polluters not to pollute” and lead to porn shops next to schools and liquor stores next to churches and therefore would undermine the protection of public health and safety. Who these people think they’re kidding? One is the last time readers of The Landowner tried to put a porn shop next to a church or school?! When someone starts flashing now with this kind of counter intuitive, ad hominem attack in debate on public policy issue, you know you have him on the run!

The proper aim of government efforts is to protect “the environment” is to prevent activities which harm the environment or thrust harmful substances upon on consenting persons and their properties; and, failing that, to punish those who violate the rights of others in this manner. This is the aim of controlling pollution-controlling the unwanted imposition of wastes or toxins by one party on another.

Indeed, the current controversy over property rights should not be viewed as being about government pollution control efforts or protection of public health and safety. Most property rights advocates are rebelling against federal government regulations, largely environmental, that restrict the reasonable use of private land. Most “takings” cases arise not when public health is at risk, but when the rights of landowners are suppressed by the exercise of bureaucratic power for non-essential, usually aesthetic, purposes.

Groups opposing property rights legislation typically argue that federal environmental laws do not take private land, and that requiring compensation for regulatory takings would impose an extreme financial burden on the government. Those two arguments are contradictory, and takings opponents cannot have it both ways. Either property rights are not being violated, and a takings compensation requirement would be superfluous enactment, or violations are rampant, and substantial amounts would have to be paid in compensation. Only one of these arguments can be true.

The Clinton Administration has implicitly acknowledged that the latter is more likely to be the case. In a June 7 letter to Senate Judiciary Committee Chairman Orrin Hatch, White House Office of Management and Budget Director Alice Rivlin claimed that the House property rights bill would cost $28 billion over the next seven years. For the federal government to be exposed to such financial claims, federal regulations must be infringing upon the rights of landowners on an unprecedented scale.

Overblown claims about the potential cost of a takings compensation requirement obscure the more fundamental issue. Land-use restrictions inevitably entail costs. The real issue is who should bear those costs. In a recent newsletter, the competitive Enterprise institute called James Hoffman, Dean of the Northwestern School of Law at Lewis and Clark College on this point. He said:

The pervasive notion that society can avoid the costs of public action if Government can avoid compensating for property affected is simple self deception. The costs of government action will be borne by someone. The compensation requirement, like a rule of liability, simply determines who that someone will be.

Under current policy, “public goods” provided by government such as military bases and highways are created by purchasing lands from private owners. On the other hand, “public goods” like wetlands preserves and wildlife refuges are created by bureaucratic edicts that deny property owners the use of their land. If the public wants to protect the habitat of endangered species or preserve an ancient stand of trees for some aesthetic, spiritual, or broad “environmental” value, then the public should be willing to pay for it, just as it pays for other “public goods. ” The costs should not be imposed on whoever is unfortunate enough to hold title to a piece of land coveted by some regulatory bureaucrat for some public purpose concocted by nameless persons elected by no one.

It is time to recognize the property rights are important for both economic and environmental reasons, and must be protected from both government and private malfeasance. Compensating landowners when they’re deprived of the reasonable use of their land will not produce environmental catastrophe. Far from it. In many cases it will eliminate the negative environmental incentives created by the heavy hand of existing government regulations.

Properly understood, property rights to not undermine sound environmental conservation, they are its foundation.

Pennsylvania Landowners’ Association, Inc.

P.O. Box 391

Waterford, PA 16441

Phone: 1.814.796.4023