20 Changes For 2010: Protecting Private Property

The next two recommendations in the Civitas Institute 2010 Agenda: “20 Changes for 2010: A Primer for State Reform” focus on reforming state annexation laws and the rules concerning eminent domain in order to ensure that the property rights of all North Carolina citizens are protected and upheld. Our Nation’s forefathers and framers of the U.S. Constitution regarded the defense of property rights as one of the few and fundamentally unchanging roles of our government.  Changing regulations and ambiguous language in the state’s general statutes threaten to diminish the property rights of North Carolina residents.   

Annexation:
The Problem: Inconsistent and ill-defined rules and regulations concerning the protection of property rights for all North Carolina citizens.

The state statute on annexation laws is inadequate and inconsistent, an ill-devised means for protecting the rights of 4.1 million North Carolinians living in unincorporated areas. There is no clear distinction as to what can be defined as a reasonable and necessary circumstance to warrant annexation. Residents living in areas waiting to be annexed into larger municipalities have minimal say in proceedings and cannot vote against or appeal an annexation rule. Often after annexation, residents receive little or no benefits from the larger municipality. Services such as water and sewer management, as well as roads and infrastructure projects, are substantially delayed or often never reach these residents. Further, contrary to a joint study commission’s recommendation, annexation oversight should not be delegated to local government commissions as they often have the potential to show bias toward the state, while ignoring the wishes of residents.

HB 524, sponsored by Rep. Bruce Goforth (D-Buncombe), Paul Luebke (D-Durham), Earl Jones (D-Guilford), and Edgar Starnes (R-Caldwell), proposes omnibus changes to current annexation statutes. However, it has been reviewed as a largely ineffective solution and will arguably augment the problems associated with annexation.¹   The bill would allow municipalities to annex areas without regard to whether or not the area already has effective infrastructure or other necessary services that the municipality would otherwise provide.  It would give cities and towns more time to delay infrastructure services to annexed areas in need of them, while forcing property owners to pay immediately for the costs associated with those services.  HB 524 passed the House last session, but fortunately did not get a hearing in the Senate.

True annexation reform requires stronger legislation.

Solution:
12.) Stronger protection against forced annexation. 

When asked in a June 2008 Civitas Institute DecisionMaker poll whether they support a proposed one-year moratorium on forced annexation that would briefly stop cities from forcing homeowners into their political boundaries without owner consent,  51 percent of voters said they would support such a measure, compared to 37 percent that said they would not. 

Ideal reform would ensure North Carolina residents have a meaningful voice in annexation proceedings, municipalities are tied to their commitment to provide needed infrastructure and other services, and the process maintains comprehensive representative oversight. 

Recommendation:

• Pass legislation to protect unincorporated areas from predatory annexation,similar to SB 494  (Shaw, D-Cumberland) introduced last session.
  • Such a law should prohibit annexation without prior voter approval of residents in the area targeted for annexation. The legislation should also require county approval of the annexation and ensure immediate provision of infrastructure services to annexed localities.

Eminent Domain:
The problem: The lack of a strong state constitutional amendment has allowed for the abuse of eminent domain as a means to accrue land for public use.  There has been a significant expansion of blight laws for seizing property – expanding government’s ability to seize property beyond protecting the public from a clear and direct harm to health and safety caused by the property. Finally, compensation for property owners relies on the government arbitrarily defining the value of the land, rather than compensation based on market value. 

Solution: 
13.) Protect private property against eminent domain abuse.

Voters were also asked in the June 2008 Civitas poll: “Should the state be able to forcibly take property from a private individual and sell it to another individual in order to foster economic development?” An overwhelming 92 percent said no, while only 3 percent said yes. 

When a state brings up an eminent domain amendment to the voters, which does not also try to address regulatory takings, the voters overwhelmingly pass the amendment.² Eminent domain should be limited to property taken solely for public and government use. Further, the blight justification for seizing property must be narrow and well defined, and must easily distinguish between what are necessary takings and what are illegal eminent domain procedures. The taking of property from a private owner should be supported by necessity lacking any viable alternative.  Finally, property owners must be compensated with fair market value, not a price determined by the government.

Recommendation:

• Replace state statutes on eminent domain with a clear and well-defined amendment to the state Constitution. 
  • Such an amendment shou shift the burden of proof to government in all eminent domain proceedings, and clearly defines property being taken as necessary for public use. The amendment should also ensure that private property is not seized merely to be redistributed to another private owner.

¹  http://capefearbusiness.com/?p=5006