Governmental regulation has long been one of the most contentious issues between property owners and the reigning authorities. Property holders after the American Revolution were sufficiently distressed over the subject to demand protection in the new Bill of Rights from what they saw as the over-reaching control of a potentially dictatorial regime—and some are just as distressed today. Surveys of business owners consistently rank burdensome regulation among their top concerns to be redressed by Congress and the courts. But where are the lines between property rights and the concerns of society drawn? Two contrasting opinions follow.
Karen Kerrigan is president of the Small Business Survival Committee, a Washington, D.C.-based advocacy group. She replied by e-mail.
Philosophically speaking, where do you believe the rights of property owners end and the obligations of state and/or federal regulators begin?
The framers of the Constitution were very straightforward in securing and protecting the rights of property owners via the Fifth Amendment to the Constitution—“No person shall be deprived life, liberty, or property without due process of law … nor shall private property be taken for public use without just compensation.” If and when the state justifies regulation or land seizures out of concern for the “health, safety and welfare” of citizens, the obligation of the state is to appropriately compensate the owner for the loss of their property. The rights of property owners under the Constitution never end-private land ownership is guaranteed and protected by the Bill of Rights. If the government wants to take property, it must pay for it… period.
What one piece of regulation-related state or federal legislation, agency rule-making, or pending court case have you and your organization most supported or opposed during the last two years (the period of the 105th Congress), and why?
It is difficult to zero in on one. SBSC is engaged in its own court case against the EPA, for example, because we feel the agency violated a law (the Small Business Regulatory Enforcement Fairness Act)—a law to protect small business—when it issued its harsh new Clean Air Standards. We also feel that the agency developed the rule using junk or nonexistent science.
SBSC [also] spent a tremendous amount of our time and energy educating the public and opposing the U.N. Global Climate Treaty. Under this treaty, the U.N. would essentially be given control over U.S. energy use and consumption. We would be required to slash energy use by almost 40 percent—this would send shockwaves through our entire economy. Meanwhile, our major competitors—China, India, Mexico, etc.—would be exempt from the terms of the treaty.
Should property owners be able to recover monetary damages for regulatory takings under the 5th Amendment to the Constitution? Why or why not?
Absolutely. And, fortunately, the courts have upheld the rights of property owners in regards to takings through regulation. In some cases—like smoking bans, for example—it may be more difficult to prove that a regulatory action for a “public good” places an unfair burden on individual property owners. However, it seems plausible that a restaurant—one effectively destroyed by such a ban—could perhaps make a “takings” case. For the most part, today’s regulatory actions are no different [from] the confiscation of property during the Revolutionary War era, when the abuse of debtor relief laws and other means to seize assets and property provided the framers with even more cause to protect property owners against the tyranny of the state and the greedy kings they left behind. Many environmental laws, restricting people’s use of their property, are takings. When individuals are limited or forever banned from using their property, or if that property is seized outright or through regulation, “just compensation” should be granted.
Of the many areas of American governance—labor, business, consumer, environment, etc.—which do you and your organization believe will be the most contentious area going into the 21st century, and why?
There will be tremendous opportunities to make our case for reforms and changes in laws that reflect a modern, technologically-driven work force and economy. As the power of organized labor wanes due, in part, to their dwindling membership numbers in the private sector and changes in the composition of the work force—more people becoming business owners, self-employed and independent contractors, combined with increased mobility in the work force—their issues will become less important. Despite the fact that [organized labor’s] current efforts to derail open trade agreements have been successful, eventually they will be defeated.
On the environmental front, we remain very concerned about “global” efforts to solve alleged environmental problems, and the use of dishonest and incomplete science in pushing politically-driven agendas. Issues involving the environment will likely remain the most contentious, as the federal government is amassing more power over the states on this issue. The EPA, for example, believes it has the authority to regulate to CO2 under the Clean Air Act. That means if they begin to regulate and place caps on CO2 (as called for in the Global Climate Treaty), this will have a tremendous impact on states and governments at all levels, not to mention their economies and the U.S. economy as a whole.
Marvin Schnee is president of Schnee Realty Company, Inc., a New York State commercial real estate firm that has closed $100 million in transactions in 20 states. He replied by e-mail.
Philosophically speaking, where do you believe the rights of property owners end and the obligations of state and/or federal regulators begin?
We believe a property owner’s rights end when he affects the quiet peace and enjoyment of other people (such as the people next door and other people in the neighborhood) in a detrimental way. In other words, if in a quiet residential neighborhood a catering hall opens and people are hanging around or getting into their cars at 2 a.m., the homeowners have a right to be upset and try to close down the catering hall. If there is minimal parking and a [convenience store] opens and the customers are forced to park in people’s driveways, it is a big problem. If there is an X-rated movie theatre near a school, or in a residential neighborhood, it is the government’s responsibility to act. The government’s responsibility is to oversee that one property owner doesn’t ruin the neighborhood for other people.
What one piece of regulation-related state or federal legislation, agency rule-making, or pending court case have you and your organization most supported or opposed during the last two years (the period of the 105th Congress), and why?
There was recently a case in New York where an owner of a property in which a dry cleaners was a tenant was personally liable for damages and suffered monetary loss because of his tenants’ actions. I also remember a case in New York where a property owner lost his property to the government because there were drugs being dealt within the property. [I believe] that if the owner makes a good faith effort to clean up his property, and any damage is not the owner’s fault, if the government is stepping in, [government] may exceed its bounds.
Should property owners be able to recover monetary damages for regulatory takings under the 5th Amendment to the Constitution? Why or why not?
There is a court case pending right now where the State of New York was on a lease. It was for the State University of New York in a building at Park Avenue South for a school of ophthalmology. The state decided to break the lease to move to another facility on 42nd Street. The owner sued, a
nd the case is currently in the legal system. I feel that if on a minute’s notice a governmental agency can break a lease, it is beyond comprehension, because any lease anywhere with any governmental authority can be worthless. I don’t see how any lender would be able to lend on any property, and any investor would be able to sleep at night.
Of the many areas of American governance—labor, business, consumer, environment, etc.—which do you and your organization believe will be the most contentious area going into the 21st century, and why?
I believe that labor would be the most contentious, because it is the most organized and the most powerful [interest group]. It can add to all the costs to the owner’s doing business.