How Far a 'Freedom Friendly' City Has Strayed

Years ago, Anaheim gained notice for its freedom-friendly way of governing. Now, the city is pursuing the command, control and subsidize approach seen elsewhere

The presidential race has become an all-consuming affair on social media, as Americans debate which candidate will do less harm to the republic and our freedoms. I remain more concerned about state and municipal governments. Local regulations are far more likely to have an effect on your life than, say, an executive order from the president.

City officials are afflicted by the same regulatory disease as those at other levels of government, whose victims crave the power to tax and regulate. There are some exceptions, places inoculated from the regulatory disease. Sandy Springs, Georgia, has privatized most city services. Voters in Talkeetna, Alaska, have elected Stubbs the Cat mayor since 1997, although some say that funny story is just a fable.

A decade ago, Anaheim was gaining national headlines for its freedom-friendly approach to government. The idea—deregulating, loosening land-use restrictions, and slashing fees—was championed by then-Mayor Curt Pringle. It was the idea of then-councilman and current Mayor Tom Tait. I called it an "enormous success" in a column in The Wall Street Journal, given how these freedom policies helped spark a renaissance.

Anaheim has done well over the years for various reasons, but it's sad the city has recently followed the same command, control, and subsidize approach found elsewhere. The best (or worst?) example involves Anaheim's approach toward homesharing web platforms such as Airbnb and HomeAway, which match up vacationers with homeowners who rent out their homes for short periods of time.

The city had allowed a number of short-term rentals, but required property owners to receive a city permit and pay taxes. Following complaints from neighbors, the City Council in late June voted to ban new ones in residential neighborhoods and to force existing operations to close down in 18 months. The city also passed tough new rules on those that will stay in business over the next year and a half. Sadly, Mayor Tait led the charge for draconian restrictions. (The city plans to come up with rules to allow some room sharing.)

In recent weeks, Airbnb filed suit against the city, echoing many of the complaints the company made against San Francisco's new regulations. HomeAway also filed a lawsuit against Anaheim. The legal actions raise some of the "freedom" issues that now get short shrift from the City Council.

The main complaint centers on Anaheim's requirement that these web-based companies police their own sites, which the short-term rental (STR) companies say is a violation of the federal Communications Decency Act. That 1996 law created a foundation of internet freedom because it protects internet platforms from being responsible for content submitted by users. Imagine if, say, Facebook were liable for what your friends posted on your wall!

"The ordinance is invalid under the First and Fourteenth amendments because it purports to impose strict criminal and civil liability on websites for publishing speech," according to the HomeAway lawsuit. For its part, Airbnb claims the ordinance "also violates Airbnb's First Amendment rights because it is a content-based restriction on speech….To justify this content-based restriction on speech, the city bears the burden of showing that the ordinance is narrowly tailored to further a substantial government interest. The city cannot carry this burden because, instead of targeting speech, the city instead could simply enforce its short-term rental laws directly against hosts who violate them—as the city acknowledges it already does successfully."

There's also a possible "taking" involved in requiring property owners to stop operating these businesses. That's the kind of anti-property-rights action I would have expected Tait to have opposed in those freedom-friendly days. I also would have expected the city to understand how the free market is fixing a once-vexing problem. In those days, officials complained about blight in older neighborhoods. These days, STR critics complain they are driving up prices in neighborhoods.

The federal court will decide the constitutional issues, of course. But the ordinance is an assault on the concept that people should be free to live their lives and run their businesses as they choose, provided they don't harm others. Neighbors have a right to complain—and expect the city to respond—when visitors violate noise and other ordinances. But they shouldn't have a right to pre-emptively stop certain activities just because other people don't like them.

Yes, we should all be worried about what the presidential election means in terms of our freedom. But our time might be better spent focusing on the myriad ways local officials are stifling innovative new businesses and ideas.