Water is going to be one of the key issues here in California and worldwide in the next decades, as population growth collides with an aging infrastructure.
California Proposition 50 proposes a $3.44 billion general obligation bond issue to be used for a variety of water-related projects.
I support improving the California infrastructure, and believe that intelligent water projects, combined with agricultural and urban conservation are absolutely necessary to get our stare through the first part of this century.
But I oppose this bond measure.
Like Prop 51, it has been co-opted by a series of real estate developers who have contributed to it in the hopes that they will directly benefit. In this case, via the purchase of sensitive wetlands that they cannot realistically develop anyway.
From the O.C. Weekly
In fact, of the $3.44 billion raised by bond sales under the initiative (another $3.46 billion would go to interest payments over 30 years), a paltry $50 million is set aside for “Water Security.” According to the state legislative analyst, more than half of Prop. 50 would pay for land acquisition and Bay Area watershed cleaning.
Prop. 50 sports a huge list of pro-environmental endorsements, including Heal the Bay, the Natural Resources Defense Council, the National Audubon Society and Surfrider Foundation. This support, based on the measures ostensible clean-water emphasis, plays a high-profile role in the pro-Prop. 50 campaign.
But more illustrative of the reality behind Prop. 50 is the mammoth list of developer contributors. Not only is there a standard Yes on 50 campaign, but two PACs are also feeding money into the battle: the shrewdly named California Conservation Campaign and the Conservation Action Fund. Together, these PACs have already brought in about $3 million in campaign contributions from big developers. They include:
Signal Landmark, which owns the controversial Bolsa Chica mesa, donated half a million to the various pro-Prop. 50 campaigns. In court for decades over a plan to cover the mesa with more than a thousand homes, Signal Landmark would benefit heartily from ballot language setting aside “not less than $300 million” in projects in the LA area with “priority” given “to the acquisition of not less than 100 acres” of the Bolsa Chica area.
Playa Capital Co., which has been trying to develop the Ballona Wetlands in West LA since 1998, has donated a whopping $830,000 to the pro-Prop. 50 fight. Prop. 50 will buy up land and protect coastal wetlands throughout the LA area.
Cargill, the huge agribusiness conglomerate that recently paid out $1 million to clean up its mess on the Missouri River, has donated $100,000 to the Conservation Action Fund. It owns salt ponds in San Francisco Bay and will benefit heavily from Prop. 50s $825 million in appropriations for the bay.
We cant afford not to do something about water here in arid Southern California. But we certainly cant afford a bond issue like this here in financially strapped California.
So Im voting no on Prop 50, and Ill wait for a more public-spirited water bond to support.
Seems to me that this initiative might violate the “one subject” rule. But what do I know? The complete text is located here, here, here, and here.
Well, I think they can get around that (as do the Prop 51 guys) by arguing that preserving wetlands is essential to water quality (it is)…it’s just that we can preserve the wetlands through the planning process, and we don’t have to buy them…
…although that creates a whole set of issues around ‘takings’.
A.L.
A.L., I’m not a California voter, but I have big problems with regulating the value away from private property without compensation.
If saving wetlands (or whatever) is so darn important, then the public should be willing to pay for it.
If, on the other hand, it is “too expensive” for the taxpayers, then it damn sure is too expensive for the affected landowners. It is just plain wrong to expect individuals to bear the full cost of a law that is “too expensive” for the entire state to bear. The cost won’t change; it will just be shifted onto a minority by the majority.
Of course, the whole “takings” argument gets corrupted by large landowners who get big payments for lands they never intend to develop anyway, and of course campaign contributors are better paid than little landowners, so there are some problems with a simple-minded approach.
And, of course, the “planning process,” with or without compensation, will always end up favoring developers over everyone else.
But a facile claim that the “planning process” is preferable to buying out lands is a little too state-power/tyranny-of-the-majority for me.
Rob:
I don’t agree — think of it this way. There are properties that are simply too problematic to develop on…unstable hillsides, faultlines, contaminated sites, etc. and there is a clear public purpose in preventing development there, to protect the future buyers of the property (I know, I know, there’s a libertarian counterargument, but a) it would never work that way even in a world that allowed it, and b) the world doesn’t allow it).
Similarly, there are sites where proposed development would have substantial negative consequences for everyone — riparian watersheds, etc. etc. — and it is reasonable to massively restrict what can be built there.
The issue of compensation comes up, and one idea is simply to create transferable development rights and allow them to be sold.
The problem with that is that at this point, anyone who owns sensitive lands knows what they’ve got…
…anyway, a subject for a later post.
A.L.
Similarly, there are sites where proposed development would have substantial negative consequences for everyone — riparian watersheds, etc. etc. — and it is reasonable to massively restrict what can be built there.
Nothing I’ve said disagrees with this statement. I’m just saying that if there’s a public purpose, the public should be willing to pay. By making enviro regs “free”–that is, by shifting the costs away from taxpayers and onto landowners–we promote “overconsumption” of regulation, and discourage the kind of cost-benefit analysis which is necessary for sensible outcomes. It’s easy
The whole point of the takings clause is to prevent the majority from screwing the minority. Yet that screwing is happening every day–remember the Klamath Valley farmers, some of whom were driven out of business for the dubious goal of saving a sucker fish?
I know that compensation is extremely problematic and any scheme is most likely to benefit wealthy developers more than small landholders. But the current regulatory system is no different.
I think that you’re flat wrong on this one. The reason that the developers are supporting Prop. 50 is that it creates the funding mechanism to get EXISTING deals done. Both Cargill and Playa Capital have existing entitlements to use their land in ways which have adverse environmental effects. Both Cargill and Playa Capital have agreed to sell big chunks of their land at prices that are actually pretty reasonable. If anyone hasn’t noticed, California is running something on the order of a $24 BILLION deficit. There is NO money in the annual appropriations budget to get the deals done. The ONLY way (in the near future) to get the land out of Cargill’s, Playa Capital’s and Signal’s hands, and protected in perpetuity, is through this bond measure. Since these companies have agreed to sell this land, why shouldn’t they support a bond measure which lets them get paid.
When an OC Republican is leading the fight against Prop 50, on the grounds that there is not enough money for “security”, that is a pretty clear indication that the bond is as good as its going to get.
The days of creating large surface storage facilities (also known as reservoirs) is over. MWD spent a fortune on the Diamond Valley/Domenegoni project for a relatively small number of acre-feet of off-stream storage in a location with high evaporation rates.
The future of water management in California is in using groundwater storage effectively. And there is lots of storage space available. But, the storage space needs to be clean, the water going into storage must be clean, and the recharge and extraction facilities have to get built. In addition to a few high-profile land acquisitions, Prop. 50 will make available a lot of money for these relatively obscure projects that will, in actuality, make a big difference as to whether water will continue to come out of your tap clean, drinkable, in sufficient volume and affordable.
No bond measure is perfect, and there are lots of good arguments that the state overpaid for the Cargill and Playa Vista sites. But the state wanted to avoid potential multi-billion dollar inverse condemnation cases. Look at the makeup of the Supreme Court, and you can see why the Atty. Gen. made the deals that he did.
This bond is critical to communities of all sizes to develop the infrastructure they need to provide clean cheap water. Vote Yes on Prop. 50.
p.s. I am an attorney in private practice with an expertise in water law and land use. But I do not represent any of the big landowners who will get paid by the proceeds of the bond. This post is my personal belief, and is not driven by any profit motive.
First, Rob:
Rob, on that basis, I should be able to get paid by my city for not building a highrise on my R-1 lot; note that I did not suggest that owners of highly sensitive properties be denied all use, but that their uses be massively restricted.
F. –
And I equally strongly disagree. 30% of the funds raised go to purchase wetlands; in the case of Playa Vista (one that I’m intimately familiar with), a substantial amount of that would go to a newly set-aside property west of Lincoln which the developer is shedding both for political and economic reasons.
I think that it is often appropriate for the state or local government to purchase properties for parks, watersheds, or other public purposes. But I think that it is something that must be done with a) an eye to the state of the public purse, which is looking pretty threadbare right now; and b) an eye as to whether this is a deal that is in the best interest of the buyer or the seller. In the case of PV, it today is certainly in the best interest of the seller.
(note that I am a supporter of the current project, not employed by project supporters of opponents, and was peripherally involved in the negotiations for the current project way back in pre-history)
A.L.
Rob — the fish kill in the Klamath Basin this year will exceed 33,000, due (probably) in large part to a late and limited release of warm water. so when the feds protect the farmers, they screw the environment. and it’s not just a sucker fish they’re trying to protect — it’s salmon, a fish with significant economic value for commercial and sport fishing and for the Native American tribes. what a lot of people fail (refuse?) to realize is that many environmental regulations have tremendous economic benefit. if you don’t like Justice Holmes’ view that regulation becomes a taking when it goes “too far”, what alternative do you have that leaves us with a liveable planet?
AL — I’m afraid I still don’t understand your opposition to Prop 51. Managed wetlands, such as are planned for Bolsa Chica, Ballona and Cargill, have tremendous positive impacts on water quality, by serving as biofilters. They have also tremendous wildlife benefits. Are you arguing that LA did not require sufficient dedications when it approved the Playa project? WHile that may be true, it’s also too late. The entitlements have been issued and defended successfully in court. The only possible way to protect the land at this point is through acquisition, I believe. (If I’m wrong, and there is an opportunity to require Playa to dedicate the land to wetland use as a condition of further development, I’d love to know, and apologize for my error.)
Southern California needs desperately to build more wetlands, especially with the possibility that the Salton Sea could go hypersaline. There are very few locations on the coast left to build managed wetlands — Ballona and Bolsa Chica are, essentially, the only large sites left from Ventura to San Diego. Land prices are not likely to go down. Why not now?
Finally, the whole point of paying for the land with bond debt is that these are long-term investments. Because it is bond debt, the cost of acquisition will be spread out over many years, including, i hope, when the State’s finances improve.
Look forward to your thoughts. Happy Halloween.
F. –
I support paying for wetlands with bonds, but in a year when we are closing hospitals, about to lay off public safety workers in some cities, and otherwise looking down the barrel of financial ruin, I’m not sure that buying it as a part of a multifacted, ill-examined initative is the way to go.
I absolutely believe that we should protect the environment, and that where possible we should acquire environmentally-sensitive properties.
But…the system is being gamed as surely as Enron gamed the energy markets here, and I simply won’t support paying for that.
A.L.
A.L.– I know that compensation for “takings” is complicated and difficult; I’ve acknowledged that repeadedly. I know that ultimately, we can expect compensation to be a source of corruption and cynicism–developers selling land they don’t want at high prices. That’s the result of ANY government scheme, regulatory or otherwise.
Clearly zoning regulations are at some level “takings,” but it does not make sense to pay everyone as if their house sits in midtown Manhatten. Duh. But the takings issue should be front and center each new regulation or zoning decision, even if the end result is simply a ruling that “this isn’t a taking.” It isn’t; people talk and act as though private property is actually public.
FDL–
You still haven’t addressed my point–if saving the fish is so damn important, why shouldn’t the cost be bourne by the government, and thus taxpayers as a whole, rather than by a tiny number of farmers? How is it fair to demand that these farmers pay the ENTIRE price and reap ZERO benefit?
Jeez, I’ve NEVER SAID that I opposed environmental regulation, so stop acting as if I did. I’m just trying to point out that these things have a costs as well as benefits, and it is wrong and tyranny-of-the-majorityish to simply impose that cost on a small number of people. If you want to save fish, fine–but blithly reciting the fish kill numbers without also considering the impact on human residents is lookiing only at benefits, and not costs.
Compensation for farmers deprived of water(as well as landowners whose uses are restricted) is one way of forcing the government and the population that it represets to weigh costs and benefits rather than simply demand benefits for free.
This is kinda fun — having a slow-motion 3-way debate.
AL — how is the system being gamed? If the state cannot, in the exercise of its police power, force the landowners to dedicate their land to wetlands uses, then the only alternative is to condemn it or buy it. I have no personal exposure to the PV project, but I worked on the Bolsa Chica project and I know the attorneys on the Cargill salt projects. In both Bolsa Chica and Cargill, the developers had given all that they were willing to give as dedications. Any further attempts to require further dedications would have resulted in inverse condemnation lawsuits. Since the state needs wetlands, it agreed to buy the parcels at issue at fair market value. But the deals cannot go through unless the voters fund Prop. 50. Since the developers have agreed to sell their land, why shouldn’t they encourage the public to fund these existing deals? I don’t mean to be obtuse, but I still don’t understand how that is “gaming” the system.
Rob — The Klamath basin is a really bad example because the water is owned by the Feds and the Feds encouraged the farmers to come to a watershed which really couldn’t handle the diversion of that much water to irrigation. So, why should the farmers get paid? Its not their water, they didn’t want to buy the water, and they got the land up there really cheap. Put another way, if you want to farm using irrigated water but don’t want to buy the water right, you’re not really in a position to complain when the public agency stops giving you the water and puts it to another use.
That being said, the federal and California endangered species acts have really screwed a lot of private landowners. Timber harvesters in northern California (northern spotted owl; california gnatcatcher), farmers in the Central Valley (various salmon runs; delta smelt) and developers in southern california (gnatcatcher; butterflies) have all had to bear tremendous costs in order to comply with the ESAs. In many cases I think there is a claim that ESA compliance rises to the level of a regulatory taking. But, so far, no one has been willing to take that case to the Sup. Ct. (well, Del Monte Dunes had a lot to do with ESA impacts.) and based on the outcome of TRPA and Pallazolo, its pretty clear that there will always be five votes to analyze each case on a case-by-case basis. since landowners (and their counsel) don’t have, and won’t get, clear guidance from the courts as to how much of an ESA burden must be disproportionately borne by only a few landowners before a regulatory taking occurs, and since the cost of litigation is so high, we end up in the position we have now, with lots of bickering in an administrative process but relatively little litigation.
While this is massively inefficient, I still have never heard of an alternative method of defining a regulatory taking that allows a legitimate amount of regulatory oversight. Any thoughts?
When AL refers to “gaming” the system, I believe he means selling off land the developers had no intention of using at all. This is the great pitfall of compesation schemes–huge institutional landowners can convince regulators that land they can’t use for any purpose is terribly, terribly delicate, and must be purchased to protect it. Meanwhile, small landowners, some of whom own truly delicate wetlands, are shut out of the process, or end up having their rights regulated away without compensation.
As to suggestions, I don’t have any really good ones for urban/suburban development, since the value of undeveloped land is unknown until it is zoned, and AL correctly points out that it would be stupid to assume we need to compensate owners for a hypothetical maximum-value use.
But for things like farms and timber, we need a workable system of credits/rights. The Feds, in the Klamath Valley case, promised farmers water rights. That didn’t, but should have, come with an enforceable property right, which the public would need to buy to revoke. Setting up a similar system–perhaps making farmers pay a nominal fee every year for the water, with the money set aside to buy it back (at a higher price) in drought years, would keep farmers in business AND allow the government to regulate water use when necessary. Such a system might not be workable–I’m certainly no expert. But it’s worth a look.
On the timber side, I AM a sort of quasi-expert, since my mother is a lawyer for a timber company and I watched the spotted owl wars first hand. The ESA screwed a lot of habitat–landowners hastily clear-cut prime owl habitat before the Feds could declare it off-limits. And of course the “three S” wildlife management technique was much in evidence (See, Shoot, Shovel).
I would suggest land trades as a way to protect owls and other species at a minimal cost. The checkerboarding of the entire West is a nightmare for everyone–inholders, regulators, environmentalists, etc. Why not expand the land-trade program to help solidify Federal land blocks, and provide a cheap way to keep the timber coming and the owls safe? The land-trade programs which exist are too small, involve the good will of the Feds rather than true property rights, and are hampered by misguided lawsuits from enviros who think we should all live in tents. But trading prime Federal timber for endangered-species-sheltering old-growth seems to be good for everyone.
The 3S’s of wildlife management actually are: shoot, shovel, shut-up. Other than that, I agree with your post. But multi-year droughts, which happen on an regular basis in California, still present problems. Deprive a farmer of water for a year and he goes broke; deprive the river of water for a year and the fish die. The farmer can be protected with various kinds of insurance but the fish can’t. So it seems to me that the long-term solution is a mix of programs, including buy-outs of land which cannot be farmed without unacceptable damage to the environment (some of Klamath, the west side of the Central Valley upstream of Kesterson drain), mandatory crop insurance as a condition of receiving federal water, and tradeable water rights. (TWRs are very complex — if a farmer is receiving highly subsidized water and then can flip it to an urban user at full price, he then is just getting a form of welfare. I don’t mind a farmer capturing the profit of his own water; I do mind a farmer turning a subsidy that has a public purpose — growing food — into pure profit.)
Good point on the crop insurance and tradeable rights–the greatest problem we face here is perverse incentives. Like the big developer who sells useless land while pretending he really, REALLY wants to put fancy office space there, we can’t just pay farmers who decide to take an early retirement.
Long-term, the buyouts might be the best option. There are lots and lots of places in this country which just shouldn’t be farmed (like, oh, most of the Midwest). We can do it without subsidies on so much less land these days, and transportation lets us get it to market…
Where I went to school, Williamstown MA, was once a farming community. It sucked: long winters, rocky soil, lots of hills. Today, the entire town is a (unplanted, natural, mature) forest, because who wants to farm there, anyway? Once the railroad brought grain into town, the farmers up and left. Some more places in this country need to go through that transition. (Although, in homage to the Armed nature of this blog, I should point out that we gun owners greatly fear urbanization as the bane of our existence.)
Interesting that your 3S’s are different. I guess my mother never did much shooting OR shoveling.
Anybody read Thurow’s first (and IMHO only good) book ‘The Zero-Sum Society’??
I think we’re right in the sweet spot of his argument; and that the gist of his argument (bribe the losers) is probably the best way out of the deadlock we’re in.
Hmmm…a good post for later on!!
A.L.