Losing the Property Rights Lottery


Donald and Irma Shirkey tried to play by the rules, but Pacific Grove, California, turned their property rights into a game of chance.

The couple purchased their brightly painted house on 5th Street, just a block from the ocean, in 1999. It was a second home for family and friends to use on visits. To cover the cost, the Shirkeys decided also to rent the house out as a vacation home. When Pacific Grove passed a new ordinance in 2010 requiring all short-term rental homes in the city to be licensed, they complied. When the city came back in 2017 and required a second license for the smaller guest quarters over the home's garage—which the Shirkeys sometimes rented separately from the main house—they went along with that, too.

Then in February, Pacific Grove passed another ordinance regarding short-term rentals. This time, the city instituted a density cap, declaring that no more than 15 percent of the homes on any given block could hold short-term rental permits.

The Shirkeys' guest house happened to be on a block with more permits than were allowed by the new ordinance. To solve that problem, the city set up a ping-pong-ball lottery machine and, on May 22, held a random drawing to determine which permit holders would be allowed to continue renting their homes.

The odds were not in the family's favor. While the permit for their small, upstairs guest quarters was selected in the lottery, the permit for the main house was not. The Shirkeys are now left with a second home that cannot be legally rented, and a small upstairs room that is not financially viable on its own.

"What the city did is insulting," says Christina Sandefur, a vice president at the Arizona-based Goldwater Institute, which is representing the Shirkeys and two other residents in a lawsuit against the city.

The suit argues that Pacific Grove violated the California state constitution's due process protections by using random chance to determine which licenses got revoked. "It was totally random," Sandefur says, "so owners who had racked up numerous complaints were allowed to keep their permits, while responsible homeowners were stripped of theirs."

The underlying problem, though, is the rental density ordinance itself. A 15 percent threshold is entirely arbitrary—does a street with 25 percent of homes rented constitute a greater threat to public health or safety? How about 40 percent?

Stripping otherwise law-abiding residents of the opportunity to rent their homes is bad enough, but raffling off property rights is shameful. With any luck, courts will also find it unconstitutional.

NEXT: Brickbat: And No Pineapple

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  1. Californicator Governments Almighty respect your property rights??! Fat fucking chance!

  2. The suit argues that Pacific Grove violated the California state constitution’s due process protections by using random chance to determine which licenses got revoked.

    You know they’re just going to revoke them all, right? There’s no randomness, no arbitrary thresholds if they just outlaw short-term residential rentals altogether.

    1. Except some friend of the city council probably has 5 rental properties that were all picked by complete coincidence. If it’s California and they didn’t outright ban something that involves free enterprise you can bet there is a crony that stands to benefit from less competition and stands to be harmed by a full on ban.

  3. When I was a child I was told that America was the greatest nation on the planet because of the free enterprise system. Other countries required people to ask permission and obey orders before engaging in economic activity, and that made them poorer. While American freedom made us rich. People could start a business, sell or rent whatever they wanted, and as long as they weren’t hurting anyone in the process it was all good.

    So much has changed since then.

    1. So vote early, and vote often.
      (And keep your power dry)

      1. What if my power gets wet?

        1. You short circuit. 🙂

    2. Are you implying we are no longer exceptional? Take a knee.

    3. When I was a child, I suspect it was much more of a libertarian moment than now, although I didn’t have the knowledge to define it as such.

      I remember seeing bumper stickers that said “Government should nationalize crime to make sure it doesn’t pay.”

      I remember seeing graffiti that said “Legalize Free Enterprise” as well as “Leglize Drugs.”

      And I knew people that actually said things like “Do whatever you like?it’s a free country.”

      This was in the late 70s – early 80s. I haven’t seen or heard this sort of thing since then.

      1. “Question Authority”

          1. I can guess the curriculum:

            1) Obey all instructions immediately, without question.

            2) Do not be hard of hearing, have physical issues that prevent you from complying with commands to move, be mentally ill, or be black.

            3) If asked for sex, immediately give your consent?which you can do, even if under arrest.

            4) Probable cause = guilt and probable cause is whatever the cop says it is. So forget about your civilian-splaining, you little perp.

            5) Stop resisting! We have to keep hitting you until you stop resisting, or our arm gets tired.

            1. Just watch the Chris rock video.

              1. That should be the entirety of the class! Such a great, and true, skit.

        1. In the 1990s I sometimes wore a custom “Legalize Freedom” T-shirt in public.

          I got some strange looks, but it never started any conversations.

        2. “Don’t steal — the government hates competition.” — seen on a Congressman’s desk in 2008.

      2. This was in the late 70s – early 80s. I haven’t seen or heard this sort of thing since then.

        When I was a kid the Dukes of Hazzard portrayed the cops as bumbling fools who got in the way of freedom loving Americans. Only a few years later Miami Vice portrayed cops as heroes who couldn’t get anything done unless they ignored the laws they were sworn to uphold.

        1. Had you chosen to go to the movies instead of staying home to watch television, you might have run into one or more films featuring Harry Callahan.

        2. And now people are triggered just by the sight of their car.

        3. Well, the honest truth is there are both kinds. I’ve known some garbage ass, corrupt as fuck police… And also some ones that were genuinely well intended, and decent folks.

          A society does need some law and order… The laws just need to be just laws, and applied fairly. A good cop working for a bad system ends up doing bad things even against their own conscience.

    4. Damn your old. My very first on the books job, I needed to get govt permission to get the job at 11. Funny thing though they didn’t ask for my permission to tax me. No taxation without representation my ass.

      1. Children have needed government permission to work since the Fair Labor Standards Act of 1938. I’m not that old.

        1. Do you remember the debate we had in 2012 in which I contended that we were more free in 1912 than in 2012? You took the opposing position.

          I stand by my contention.

          1. I don’t remember that. As far as being free from government, yes I would agree that we were freer then. But there are other freedoms that markets and technology has brought us that couldn’t even be imagined a hundred years ago. I guess the question is which one carries more weight.

          2. USA only, & no particular part of it?

            1912: Porn’s illegal. 2012: legal.

            1912: Homosex’s illegal. 2012: legal.

            1912: Usury laws. Not 2012.

            1912: Most gambling’s illegal. 2012: Many forms & outlets for gambling legal.

            1. 1912 is an interesting choice of starting year. Prohibition is right around the corner.

              (Also, for womenfolk, only a couple of states allow them to vote. Hard to be free when you aren’t allowed to vote.)

            2. No income tax.

              No IRS.

              No SARs.

              No Know Your Customer.

              No RICO.

              Right to travel far stronger.

              No automobile exception to the 4th Amendment.

              No CIA.

              No DEA.

              No WOD.

              I could go on and on.

              1. As long as you weren’t black, you were cool. Oh, and definitely don’t be gay.

                But it looks like in general, we’re more free to enjoy vices and way less free to make money.

                1. No, we were more free to enjoy vices in 1912. Sure, sodomy and gambling, not so much, but I am looking at matters kaleidoscopically, rather than through the prism of the rainbow coalition.

                  1. Technically we have of course made gains and losses… But I would take 1912 HANDS DOWN. Why?

                    Because some things are more important than others. I think we had a lot more IMPORTANT freedoms back then, whereas almost all the stuff we have ostensibly gained since then have been small, random things on the periphery.

                    How can somebody compare gun rights, not being taxes to death, no prohibition on drugs, etc to something stupid like a “good” thing like no fault divorce being implemented? Frankly, in a major city back then one could be A Gay without too much problem, if one kept it on the DL. Same for many other “gains” we’ve made since then.

                    Many of the new “freedoms” we have are in fact things that should be legal… But they’re also things that shouldn’t be publicly pushed as virtues either. 1912 was a FAR better America overall, although I would surely combine the best parts of then and now if I could.

                    1. “How can somebody compare gun rights…”
                      ” Frankly, in a major city back then one could be A Gay without too much problem, if one kept it on the DL”

                      Frankly, in a major city right now, one can be a gun criminal without too much problem, if you keep it on the DL.

                    2. Difference was, you had an almost 0% chance of being thrown in prison if you were caught for that back then… People would probably just mock you for being queer. Today you will 100% be thrown in prison for violating gun laws.

      2. Yeah, I started working when I was a minor. That didn’t stop the government from making me sign the Social Security contract.

        1. I started working as a minor, but didn’t have a Social Security account yet. They hadn’t started requiring parents to get SS numbers for their children in order to claim them as dependents yet.

    5. Just stay away from California and liberal cities and you will be OKAY.

  4. I hope they are successful but its unlikely.

    Californians vote for Democrats and then Democrats institute Socialist property controls that would normally be unconstitutional but since nearly the entire state is Socialist, there is nobody left to check the government.

    At this point, if you stay in California and you are not down with a complete Socialist state you are a fool. Even the mighty fighter will be overwhelmed by the Socialist masses.

    1. California is a cess pool.

    2. “At this point, if you stay in California and you are not down with a complete Socialist state you are a fool. Even the mighty fighter will be overwhelmed by the Socialist masses.”

      And if you are not a Californian, it’s none of your business. So anyone who complains about this is either a fool or a buttinski.

    3. Look at the Lefty Pollock trying to hide California’s building of camps from the other 49 states.

      He thinks Commifornia really can do whatever it wants. Georgia cannot because it would set Socialism back to end Medicaid, Social Security, Medicare, federal income tax, all gun laws….

      1. Yes, yes, yes, everybody but you is a lefty.

        Lefties under every bed, behind every lamppost, and cowering in every manhole.

        EEK! A lefty! Wait, never mind, it was just the socialist mailman delivering the socialist mail, driving on the socialist roadways.

        Hint: California gets the state laws that get passed by California politicians, who get elected by passing laws that Californians like. Georgia gets the state laws that get passed by Georgia politicians, who get elected by passing laws that Georgians like. This is considered the key aspect of the Constitution you claim to love.

        1. And yet…let one state whisper that background checks are an infringement upon gun ownership…let someone start a petition to outlaw abortions…let one school district say that Common Core does a disservice to students…let Ben Shapiro speak at one college campus…let the President repeal one executive order from a previous administration…(list can go on for quite some time)

          1. ((list can go on for quite some time)

            If it goes on long enough, will it come to a point?

        2. Just he lefties are lefties.

          Embrace that you’re a lefty. Tell us how great socialism is.

          1. Yes, yes, yes. Lefties everywhere.

            ” Tell us how great socialism is.”

            You’re the one who keeps repeating how great it is that you’re allowed to have sodomy with other menfolk. Is that what you’re referring to?

        3. Pollock with the racist ‘states rights’ schtick.

    4. I’m originally from the suburbs of the Bay Area. Even when I was a kid in the 80s/90s it wasn’t COMPLETELY fucked yet. When my dad grew up there it was pretty damn awesome. When my grandpa grew up there… Jesus Christ, it must have been about heaven on earth. Hamburgers, big block V8s, fully automatic machine guns you could buy with no background check, and sunshine damn near every day! That’s what California was like when my dad grew up there.

      I HATE having been born when I was. I got straight fucked. Born into what was once the greatest nation in the history of the world (and in what HAD been the best part of it), RIGHT as it started going to shit because of idiots, communists, and globalist traitors. If things get pulled out in the end, I guess it will be alright… But if it just slowly sinks into the abyss my whole life, that’s gonna suck. That’s what my dad frequently says he feels like. He’s just watched it go from being pretty awesome to progressively worse his entire life. Depressing.

  5. A 15 percent threshold is entirely arbitrary?does a street with 25 percent of homes rented constitute a greater threat to public health or safety? How about 40 percent?

    How about it doesn’t matter?

    1. I’d have to answer yes if he had hit 42%.

    2. Because GOD FORBID it might make economic sense for the area if even 90% of houses RIGHT on the beach were more valuable as vacation rentals, versus permanent homes for people. It would be HORRIBLE if such a scenario put more money into the hands of property owners to spend into the local economy, and use to buy another house a few blocks further inland. WHAT MADNESS!

  6. With this random selection of who gets to be free, it’s like Two-Face is running the local government.

    1. Everyone is still equally unfree. It’s not like permit holders can just do what they want.

  7. Ehh?

    Not justifying limiting what people can do with their property, but assigning licenses through lottery has been commonplace, as it is about the only means to restrict the number of licenses while reducing the possibility of favoritism.

    Making arbitrary calls about the number per each block may raise a few eyebrows, but the practice in general is sound.

    1. Requiring a license itself is unsound.

      1. Depends on how loosely you are defining license.

        As is, a largish portion of libertarians support HOAs, which could have the exact same progression of covenants, so the issue isn’t the outcome or restrictions per se, but the issuing body (it’s only authoritarianism when they do it).

        Nor is there any indication of the progression of the law, which could have been staring down an outright ban as demanded by the voters and this is the best compromise.

        1. Since when has libertarianism supported the tyranny of the majority?

          1. “Since when has libertarianism supported the tyranny of the majority?”

            It’s simple realism. Lecturing the majority that they can’t do something is rarely effective. Ask anyone who was an American citizen of Japanese descent in 1942, for example.

            You have exactly those rights that other people are willing to extend to you, and nothing more.

          2. As long as libertarians are the majority, they absolutely support it.

            Should The People’s Glorious Parking Collective buy a bunch of adjacent territory and form their freelove commune, libertarians scoff about how it due to collapse any day now. When they make it a part of the by-laws that under no circumstances should any of the property be sold to libertarians, libertarians screech about market restrictions, which is totally different than their association defining property rights.

            But some time in the night, a rogue copy of the The Road to Serfdom is smuggled into the Parking Collective. And while most found it nice enough but hard to dance to, one bright shine beacon of freedom had the scales fall from xes eyes and was at One with One True Libertarianism.

            Except now he is surrounded by icky socialst.

            And instead of pursuing the least disruptive course of action and selling, xe decides to liberate his former freelove colleagues with a rallying cry of “muh rights”.

            Now reverse the roles and substitute with Somalia and Das Capital, and you might see what I mean.

            Alternatively, you could try reading the first sentence of the second paragraph from ANY of the above post (and concentrate this time) and take it up with libertarians that support HOAs as “right of contract”.

            1. There is a difference between a voluntary contract, and the government forcing something. No real libertarian is against voluntary contracts, even when it’s for something stupid, like forming a communist commune.

              1. “No real libertarian…”

                No true Scotsman…

                Wait. Start over.

                “No real libertarian is against voluntary contracts”

                Not all voluntary contracts are equally voluntary.
                Some libertarians focus exclusively on government limitations on their freedom. Some libertarians oppose anything that places limitations on their freedom, even if it comes from something OTHER than government. Government is just other people.

                1. “Not all voluntary contracts are equally voluntary”. By definition they are. If you want to argue something stupid like car or flood insurance, those are government mandated requirements.

        2. Libertarians support freedom of contract, not hoas. If you choose to agree to Hoa terms, feel free.

          1. Because an HOA is somehow not a contract. Got it.

            The terms of the HOA are subject to change, not unlike a legislature passing new laws.

            The sensible thing would be to grandfather all existing rentals (and HOAs for that matter), and start anew with a lottery system.

            But since the discussion isn’t about sensibility but outrage, let us foam at the mouth that licenses are given by chance.

            And being the official spokesperson for libertarianism, what is libertarian position on terms that apply after the fact as a condition of sale?

      2. “Requiring a license itself is unsound.”

        Not necessarily.

        All rights have boundaries (usually, where your rights start to interact with the rights of other people.) To the extent that YOUR free use of YOUR property starts to impinge on OTHER PEOPLE’S free use of THEIR PROPERTY, one or both of you find limits on your freedom.

        So, for example, my right to operate a shooting range on my property might be limited if my customers are bad shots, and bullets are winding up in the neighbors (or their houses).

        The question then becomes, how and when does renting out one’s spare homes to visitors affect the neighbors, whatever use they’re making of THEIR property? The follow-up question is “does the licensing program address those needs adequately?”

        Some libertarians’ dogma says “no, it can never” but realistically, the answer may be “yes”, or “no”, or “yes, but…” or “sometimes” or “it depends…”. Without knowing specifics, I can’t tell which it is in this case.

        Ultimately, if the restrictions are to odious, use the property differently or dispose of it. File an application to convert it to a landfill, and see if THAT affects the local politicians…

        1. It was a warning shot against possible trespasser. My aim is just really bad (hence the shooting range).

          Why do you hate liberty?

          1. “Why do you hate liberty?”

            I don’t.
            I just support the liberty to own and use a firearm equally with the freedom not to be shot by an irresponsible twit.
            The only people who oppose this are the irresponsible twits. Frankly, I’m not very worried about their hurt little feelings.

            1. Pollock hates freedom and the constitution.

              1. Whereas you have no understanding of either one, you poor sod.

            2. I feel that you’re an irresponsible twit, give up your guns sir.

            3. I feel that you’re an irresponsible twit, give up your guns sir.

    2. Requiring a lottery to limit a market is absolutely favoritism of first entry. It’s a retarded policy.

      1. I am absolutely unfamiliar with this “absolutely favoritism of first entry”. Could you explain?

        1. He just made it up, and it doesn’t mean anything.

          1. James, I’m sorry you’re a fucking dumbass who doesnt understand the issue of limited resources and lotteries for said resources on future participants. I’ll stop making the mistake you are educated at all.

        2. The people who currently own properties are the only ones in the initial lottery. New entrants into the pool who buy a property are not allowed a redo to enter said lottery but mist wait until a future lottery of people who have given up their rental rights. This is generally a pool much smaller than the initial pool.

          1. Um, no.

            You are essentially arguing people who do not own property yet are being denied future potential profits based upon solely a lottery. Man, there are entitlements, and there are entitlements.

            Do you hold the same for any other business that opened first? Am I being denied profits because the state allowed other business to be opened before me?

            Nor is there any indication that is how the lottery will operate; nor is there any indication that the sole remedy for said persons is to wait until another position opens up (you could petition to have your property reclassified as commercial).

            Similarly every person who never bought property in Pacific Grove is also being denied profits. Owners refused to sell and there isn’t an unlimited amount of land for sale, so they too must wait until a position opens up.

            We see now the violence inherent in the system.

        3. The people who currently own properties are the only ones in the initial lottery. New entrants into the pool who buy a property are not allowed a redo to enter said lottery but mist wait until a future lottery of people who have given up their rental rights. This is generally a pool much smaller than the initial pool.

  8. It’s CA!!! Why would anyone continue to live there? Talk about felling entitled? So much for the “pursuit of happiness.”

  9. “does a street with 25 percent of homes rented constitute a greater threat to public health or safety? How about 40 percent?”

    People who rent are low class and hurt property values. Ask any homeowner sexual.

  10. …just when you thought California couldn’t get any more stupid…

    1. Challenge accepted!

      1. Gavin Newsome says “hold my chardonnay”….

  11. IANAL… but I am a landlord and this seems like a pretty clear Takings case to me. (https://en.wikipedia.org/wiki/Regulatory_taking.)

    1. “IANAL… but I am a landlord and this seems like a pretty clear Takings case to me”

      I am also NAL, but it’s not even vaguely a takings case.
      A takings case is when the local town says “Your property is now open for anyone who wants to reach the beach, and you can’t exclude any of them from any part of the property.”

      You ALSO can’t use your residential property as a toxic waste dump. Or a bordello (certain Nevada counties excepted). Neither of those is a takings case, either.

      1. Well, actually, it depends. Them forcing you to let people wander through would be takings, but some extra crazy zoning changes and the like have also been declared to be takings as well. This MAY fall under such laws, if in fact it was explicitly acceptable in the past.

        There’s a reason so many property uses are grandfathered in when cities change zoning… Because they CAN’T all of a sudden tell you you can’t use the property in a way that was legal when you bought it. Because it robs you of value. Many such changes only happen when one sells a property, and the new owner is subject to new laws. At some point this was decided as not being a “taking” because the new owner knew what they were getting into when they bought it.

        1. “Because they CAN’T all of a sudden tell you you can’t use the property in a way that was legal when you bought it.”

          Except that yeah, they can. For example (a stretched one, admittedly) I could have used my property to sell pseudoephedrine tablets. Then, all of a sudden, only licensed pharmacies can sell pseudoephedrine tablets, and only to people who have a prescription.

          See also a whole bunch of uses of property that were limited by being discovered to be habitat for endangered species.

          “Because it robs you of value.”

          Unless it robs you of all or substantially all of the value, it isn’t a “takings” case.
          Ask an attorney licensed in your jurisdiction to explain it to you.

          1. The restriction isn’t on your residential property dumbfuck, it is a restriction on the medication.

          2. The bottom line is that takings cases are all over the map. It’s a giant mess of case law that varies by location in the US.

            Some cases I read about seemed like a sure fire win… But they lost. Then others that seemed far more dubious, the property owner won.

            It is arbitrary and somewhat ridiculous. But the general principle is why certain things that have been defined through statute or case law are verboten.

            For instance if you bought a large single family home that was converted into a duplex setup in the 1970s when it was legal to do so, but they changed that law in the 1990s making it not doable, I don’t think there is a single jurisdiction in the US that would force you to return it to a single family setup. Because it would be a taking. That situation has been made clear cut via statute/case law.

            But there are many grey zones to be sure, and they often don’t make sense to a sane or logical person.

      2. It’s obvious youre not a lawyer nor care to educate yourself James. A modification on property rights and restrictions can also be a taking in certain cases.

  12. I wonder if anyone tried to use this defense against the military draft lottery. It’s not fair to draft me by random chance.

    1. If the 13th amendment doesn’t protect individuals against the draft, it’s hard to see how anything else will, either.

      But the army is socialistic, anyway! So we started to sublet the last war to private industry, and saved a bundle.

      1. More lefty nonsense from pollock

        1. The 13th amendment is “lefty nonsense”? Why do you hate the Constitution so VERY much, Mr. person who lies outright with his display name?

        2. James went full retard in this thread.

  13. Why not just decide that too many people live on a block and have a lottery to decide who gets to live in their house at all? Or that there are too many cars and randomly decide who gets tonown a car? Or too many people of color?

  14. The NIMBY effect is very strong. The locals don’t like the rentals.

    It is like a halfway house for mentally challenged adults. People are fine with the idea until they find out it will be on the next block.

    1. The truth is that stuff like rentals, or cramming in a ton of town houses, etc all DO suck. My neighborhood has been turned into a steaming pile of shit around me because Seattle has grown so fast. IT SUCKS. I hate it. I despise all the developers passionately. I hate the new types of neighbors who moved in. It just generally blows goats.

      BUT, as a libertarian, that’s the breaks. I’m living in a city, not in an HOA owned development with rules I like, so that’s just how shit goes down in the hood. I am going to use my freedom to GTFO and move before long, which is always an option for somebody who doesn’t like the way an area has changed.

    2. “The locals don’t like the rentals.”

      The locals who rent don’t give a shit. The local homeowner sexuals care deeply, as renters are deemed to be detrimental to property values.

  15. I would like to read more of your posts. Very nice post thank you for sharing.
    run 3

  16. Success! They’ve legislated away crime and safety issues, congrats to them. I feel sorry for the derelict municipalities that border Pacific Grove with the high rental rates AND crime AND safety concerns. In a word, they’ve created Utopia!

  17. Pacific Grove is an offense against Humanity, and should be bulldozed and replaced by a public park.

  18. Let’s return the colonies to British rule. I’m sure we’d all be far freer than we are now under our “own” despots.

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