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Danger Ahead: Hometown Democracy

By January 11, 2010No Comments
Danger!  Loss of Property Rights

Danger! Loss of Property Rights

I’m normally a guy who scolds others for exaggeration or overstatement.  At the risk of violating my principles, let me say this:  next fall we’ll vote on the most dangerous constitutional amendment Florida has ever seen – Florida Hometown Democracy.  If you don’t yet know what it’s about, take time to educate yourself and then tell everyone you know.  This amendment needs to be stopped.  It will not only impact the petroleum industry, but it has the potential to set Florida’s economy back decades.

What the Amendment Does

The amendment has been promoted by a few aggressive anti-growth advocates who raised the signatures necessary to place it on the ballot for the 2010 general election.  Hometown Democracy has a nice sound to it and who can be against voting in favor of democracy?  Even so, it will be a disaster if it passes.

In a nutshell, the amendment requires that before any adoption of or change to a land use plan, the issue must be submitted to the voters.  This doesn’t mean that you avoid the gauntlet of your local planning agency and governing body that you currently have to run.  It means that you have to jump through all the hoops on the current course plus wait until you can get it on the ballot and have a vote.  Then, if the local not in my backyard (NIMBY) advocates object, you have to spend money to educate the voters or kiss your project goodbye.  Of course, hundreds of thousands of dollars can be spent on a local election campaign.  Just add that cost to the other costs of any project that would require you to go through this process.

Property Rights 101

Both the United States and Florida constitutions were designed specifically to protect property rights and other individual rights by limiting the powers of government to the exercise of due process in accordance with law.  Takings and other limitations of those rights were intended to occur only in accordance with the strict provisions of law.  Neither our constitution nor our laws grant to a popular majority the power to pass judgment on an individual’s lawful use of property.  Yet this amendment could result in the denial of property rights based on the outcome of a well- funded campaign.  Let’s hope this doesn’t happen.

What will be the Impact of the Amendment?

No one can anticipate with certainty all the impacts this amendment could have on our economy.  It’s entirely possible that there will be some unanticipated consequences that will be worse than imagined.  I do feel confident in predicting that none of the consequences will be good – unless of course you happen to think that freezing the economy of Florida in its current state is a good idea.  That said, there are a few things we can expect:

1.      Dramatic reduction of real estate investment, development and construction.  A major portion of any future development we can reasonably anticipate would require land use change.  Investors are not going to risk money on this amendment process.  We’ll lose the investment dollars and all they would produce.

2.      Locked-in job losses.  We would lock in the job losses that have already been experienced by the development and construction industries.  Although these industries have been greatly impacted by the current economic downturn, most expect them to return.   Passing the amendment would be like shooting someone with the flu.

3.      Dramatic upheaval in Florida’s real estate market.  Almost immediately the amendment will create artificial constriction on the supply of property available for development.  The resulting development restriction will prevent the impacted properties from realizing their full potential.

4.      Create dramatic swings in land value.  Currently-entitled property could see dramatic upward spikes in value, taxes and insurance.  Some owners, with no desire to sell, could be forced to do so because of these increases.  All non-entitled land, including agricultural land, could be dramatically de-valued.

5.      Impact beyond the real estate market.  Almost every business in Florida is dependent on growth either directly or indirectly.  Businesses across the entire economic spectrum will be forced to downsize without the income brought by new development.

6.      Impact to local government. Local government will be handcuffed and unable to respond to changes in the community without an expensive referendum.

It already looks like there will be great interest and voter turnout in the 2010 general election.  Let’s make sure that everyone understands what they’ll be getting with the Hometown Democracy amendment and votes against it.

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