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Stealth Confiscation: How governments regulate, freeze, and devalue private property-without compensation

Type: Books
Date Published: May 10, 2012
Authors:
Research Topics:
Risk & Regulation

The problem
In 1976, the Alberta government told an Edmonton farmer his private land was to be turned into a park and offered him a pittance for compensation; it was only in court years later that the province was forced to admit it actually wanted his land for a highway—which would have triggered much higher compensation. In Vancouver in 2000, the City told the Canadian Pacific Railway that CPR land was henceforth to be a public space—and that no compensation would ever be paid; six years later, the Supreme Court of Canada endorsed the de facto confiscation.

What do these two cases -- one from a private landowner with limited resources and one from a corporation with much deeper pockets -- have in common? Both are examples of how government regulation can and does restrict the use of property to such an extent that such restrictions are akin to expropriation. Except that when governments use regulation to seize property, compensation is often small or in most cases, non-existent.

In some cases, that is precisely why governments use regulation: it allows them to avoid paying compensation that would otherwise be due if expropriation statutes were in play. Here’s how it works: the regulation is imposed; the freeze or partial freeze occurs; the devaluation results; little or no compensation is offered.

The remedy from Europe
This book points the way out of such undesirable policies while also recognizing the reality and desirability of some regulation. The book includes international examples of compensation for what’s known as “regulatory takings” and outlines how countries such as Sweden, Finland, Germany, Holland, Israel, and others treat private property owners much more fairly, providing compensation for regulations that “freeze” one’s property. Stealth Confiscation offers examples of such sensible policy, explains Canada’s historic attachment to property rights, and analyzes recent initiatives for both legislative and constitutional reform.

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