After a group of homeless moms simply moved into a vacant three-bedroom house in Oakland owned by a company that invests in local real estate, local progressives turned them into folk heroes. These women weren’t squatters who took something that wasn’t theirs, but valiant protesters who were standing up for their communities against — all together now — corporate speculators.
As one of these Oakland moms said, “Housing is a human right. I pay bills there. I pay water, PG&E, internet. We live there. We want to purchase the home; it needs to belong back in the hands of the community. It was stolen through the foreclosure crisis.” That certainly puts a new spin on the term “property ownership.”
If I find a house that happens to be vacant, move in, and start paying utilities, then it’s apparently my human right to live there. And since when is foreclosing on a property — i.e., repossessing it after the buyer defaults on the loan — a form of theft? If such fairy tales are turned into rights, who exactly will build housing or provide mortgages?
Most disturbing, however, was the response from some lawmakers. Assemblyman Ash Kalra, D-San Jose, inveighed against “opportunistic landlords and corporate landlords” who “keep our homes vacant,” according to news reports. And it gets worse.
“I want to thank Moms 4 Housing for taking that house and for demonstrating that nowhere, nowhere should there be a vacant house anywhere in California when we have the housing crisis that we have,” Sen. Nancy Skinner, D-Berkeley, told the Los Angeles Times. “And it was totally legitimate for those homeless moms to take over that house.”
Let’s hope Sen. Skinner never buys an investment house or leaves hers vacant for a remodeling or an extended vacation because, you know, it might be my fundamental human right to make myself at home there.
That particular situation ended peacefully. The moms were evicted, but the property owners agreed to sell this property at market rates to a community land trust on behalf of these women. The owners also gave community groups a right of first refusal on other properties. (Note the infuriating headline in this Times article: “Evicted Oakland moms will get their house back after a deal with Redondo Beach company.” Get their house back?)
The agreement — touted by some observers as a victory for civil disobedience — only rewards this type of behavior. It sends the message that property rights don’t matter. If you want something, just take it. The end result of such thinking is now on display much farther south, in the city of Los Angeles.
The Los Angeles city council might use the power of eminent domain to seize a 124-unit apartment building called Hillside Villa in Chinatown. The Community Redevelopment Agency had provided various loans to the developer in 1986 in exchange for providing below-market rents. (Note to developers: Government benefits always come at a price, often a stiff one.)
With those restrictions ending, the owner wants to rent the apartments at market rates. Councilman Gil Cedillo’s plan would have the city take the apartment building to maintain the lower rents. “If it works, Cedillo wants the city to consider seizing other privately-owned buildings whose owners are on the cusp of converting their rents from below-market to market rate,” according to an editorial in the Los Angeles Times. In other words, this might just be the beginning.
To its credit, the Times inveighed against the idea, noting that “L.A. leaders cannot ignore the possible repercussions if the city were to seize private property.” These include, quite obviously, scaring “away the private and for-profit developers that L.A. relies upon to build much-needed housing, as well as the investors who help fund the construction in the first place.”
Even better, the Times noted that “private property rights are a bedrock American value, and eminent domain has long been deeply unpopular.” If a newspaper editorial board with a liberal editorial slant thinks this policy goes too far, you can be sure that it goes much too far.
Cities can probably get away with using eminent domain this way. Jim Burling, a legal scholar with the pro-property-rights Pacific Legal Foundation, told Reason magazine that while such an idea erodes property rights, “It is theoretically possible for the city to thread the needle to make this work constitutionally.” He’s no doubt right, given legal precedent.
In the 2005 Kelo decision, the U.S. Supreme Court declared that cities can take private property and give it to other private owners as long as there is a public “benefit.” In this case, the city would own the apartment building. But in craftily shifting the standard from public use to public benefit, the court made it easier for governments to abuse this takings power. Los Angeles will no doubt claim that providing affordable housing is a public benefit.
The bigger issue, however, is that Los Angeles and other California cities have screwed up their housing markets through decades of excess regulation, slow-growth rules, rent controls, and other policies that depress housing construction and drive up the price of the housing that everyone says they want.
I’m struck by this paragraph in a February 3 Times news article regarding the city’s eminent-domain proposal: “Los Angeles leaders have relied on different strategies for slowing the growth in housing prices — limits on rent hikes in older buildings, new restrictions on Airbnb and incentives for developers who build affordable housing.”
Unfortunately, all those strategies only contribute to the crisis. The city has yet to embrace the one strategy that really works: letting the market do its thing. That seems like a far more sensible way to meet people’s housing needs than empowering public officials to use tax dollars to seize private property — or encouraging people to commandeer empty properties.
Steven Greenhut is Western region director for the R Street Institute. Write to him at firstname.lastname@example.org.