Buried in the definitions of Proposition 98 is a provision that will wreak havoc with local government planning and zoning decisions. Section 19(c)(3)(iii) of the measure prohibits laws and regulations that “transfer an economic benefit to one or more private persons at the expense of the private owner.”  This broad language contains no exceptions for decisions to protect health and safety.  Nor does it protect currently existing programs from attack.

Here are just a few examples.

• Downtowns.  A local government decision to encourage development of its downtown could be attacked as creating an economic transfer to the downtown store owners at the expense of big box outlets that may want to open at the city’s periphery.  But, a decision to permit the opening of a big box outlet could also be attacked by the downtown merchants as creating an economic transfer to the big box outlet at their expense.

• Liquor Stores.   A local government decision to disallow liquor stores in certain residential areas could be attacked by the liquor stores as increasing residential property values at their expense.  But, a decision to allow a liquor store could be attacked by the neighbors as transferring an economic benefit to the liquor store at the expense of their property values.   

• New Subdivision.  A decision to approve a new subdivision that will increase traffic significantly could be attacked by local neighbors as transferring an economic benefit to the developer as the expense of their property values.  But, denial of the new subdivision could also be attacked by the developer as a transfer of economic benefit from it to the neighboring property owners.

• Hillside Protection.   A local government decision to restrict development on steep hillsides could be attacked by the developer as an economic transfer from the hillside property to protect the views and values of the properties at the top of the hill.  But, a decision to allow development on the hillside could also be attacked by the neighbors as an economic transfer to the developer that causes a reduction in their property values.