Amortization:
How governments intend to steal your land

By Karen Frostrom

In 2005, with the issuance of the decision in Kelo v. City of New London, 545 U.S. 469, community redevelopment, previously carried out quietly and without public prominence, became a household concept. With the onset of public knowledge that the government could legally and forcibly take private property for the benefit of another private party, redevelopment agencies came under fire. The threat to their existence became serious when, in early 2011, California Governor Jerry Brown presented a formal proposal to eliminate redevelopment agencies state-wide. That proposal culminated in the passage of Senate Bills 14 and 15 (2011), which do not automatically eliminate the agencies but rather set strict conditions under which they may now exist or risk involuntary termination.

So what is a poor government to do if it is forced to exist in a free market economy? The answer appears to be “amortization.” If redevelopment condemnation was bad, this is how it gets worse.

Historically, government agencies have retained the broad discretion to regulate land use by adopting zoning ordinances. This ability to change the use to which land can be put was balanced against private landowner rights under the concept of vested nonconforming use. See Jones v. City of Los Angeles, 211 Cal. 304 (1930). That changed with Livingston Rock and Gravel v. Los Angeles, 43 Cal.2d 121 (1954). In Livingston, the court acknowledged that historically, nonconforming uses were exempted from new zoning ordinances. However, it approved a zoning ordinance that required nonconforming uses to terminate after twenty years, finding such a requirement to be a reasonable exercise of the police power. The Livingston decision was split, with the dissent finding that an involuntary termination of a vested nonconforming use is a deprivation of property without due process of law. The Livingston decision did not use the term “amortize.” But the term had surfaced and property rights changed for good.

The concept of amortization in the California zoning context appears to have come from an article, Crolly and Norton, Termination of Nonconforming Uses, 62 Zoning Bulletin 1, Regional Planning Ass’n., June 1952. That article concluded: “The only positive method of getting rid of nonconforming uses yet devised is to amortize a nonconforming building. That is, to determine the normal useful remaining life of the building an prohibit the owner from maintaining it after the expiration of that time.” Citing the Crolly article, City of Los Angeles v. Gage, 127 Cal.App.2d 442 (1954), finding the matter to be one of first impression, rejected the notion that “amortization” constituted an unconstitutional taking of property because “[u]se of a reasonable amortization scheme provides an equitable means of reconciliation of the conflicting interests in satisfaction of due process of law.” Id. at 460. While uncommonly implemented, amortization as a means of involuntarily removing nonconforming uses remains legal in California.

How to tie the two concepts above together? Local cities have discovered the latter as their solution to the former. Threatened with the loss of the power of redevelopment condemnation, the concept of amortization has gained an unprecedented following. In 2006, National City added section 18.108.230 entitled “Affirmative termination by amortization” to its zoning code, providing a complex means by which to force involuntary termination of land uses rendered nonconforming by rezoning. In 2009, Lemon Grove added section 17.24.090(T)(2), providing deadlines by which nonconforming uses must be removed. In 2010, El Cajon adopted section 17.120.080, requiring removal of nonconforming uses within three years of becoming noncompliant. The sudden rash of amortization statutes, and the timing of their emergence, defies a conclusion that the parallel trends are a coincidence. Out of the frying pan and into the fire. The citizens voiced their strong objections to redevelopment agencies’ ability to force a sale of property. Their reward for succeeding in vindicating their property rights appears to be a newly emerging city right to force the donation of their property rights.

The use of the term amortize in this context is deceptive. In all other contexts, amortization means to pay something off slowly. These amortization statutes provide no such payments. They should more accurate be called what they are – unpaid land use termination with prescribed notice – or even better, notice of intent to steal. That is all the statutes provide – notice. They provide no compensation. They provide no financial liquidation. They provide no legal recompense whatsoever. They are, in short, a travesty.

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