Oregon voters end era of iron-fisted rules forcing private owners to bear the cost of public use

Progress towards a true Ownership Society

Oregonians In Action, a statewide property rights lobbying group based near Portland, this year sponsored Ballot Measure 37, a bold citizen initiative that would require governments to compensate land owners if regulations damaged their property values.

On November 2, 2004, a million Oregonians voted to pass Measure 37, giving property owners a 60 percent to 40 percent victory.

It was a massive shift in public policy: over the past three decades, Oregon has become notorious for having the most restrictive land-use rules in the nation. Housing was crowded into cities under a planning philosophy sarcastically called "timberland, farmland and ring around the city." Vast parcels of private farmland and private forests were rendered untouchable by an ever-growing list of rules that put public use ahead of private use — and didn't pay for it.

Each county established "urban growth boundaries" around its cities and kept development within these boundaries, trampling on the rights of property owners.

On farmland, houses could be built only under stringent conditions — for instance, the buyer had to show that he could generate $80,000 in annual gross income from farming for a period of years before he could build a dwelling. Non-farm dwellings were allowed only in areas with poor soil. But the owners of land rendered useless by government rules still had to pay property taxes on it.

As a result of these draconian no-use policies, suburban growth was killed and land values declined all over Oregon. The Ownership Society faded into a remote dream.

More fundamentally, the rights of individuals were gutted to satisfy the desires of environmentalists and so-called "smart growth" advocates.

But Oregonians In Action and Ballot Measure 37 changed all that. Under Measure 37, property owners who can prove that environmental or zoning rules have hurt their investments can force the government to compensate them for the losses — or get an exemption from the rules altogether.

Ross Day, Director of Legal Affairs for Oregonians In Action, told the New York Times, "Regardless of any benefits land use regulation may have, the people paying the cost are property owners. If Enron does something like this, people call it theft. If Oregon does it, they call it land-use planning."

Ownership advocates across the country have championed the idea of compensation for aggrieved landowners since at least the mid-1990s. It was a cornerstone of the 1994 House Republican campaign's "Contract With America." Four states have laws dating from the '90s that provide some compensation for affected property owners, but in a much more limited way.

Other states that allow for compensation for damaged property owners are Texas, Louisiana, Mississippi and Florida. But they set a threshold, for example a 25 percent reduction in a property's value.

Michael Berger, a partner in the Los Angeles law firm of Manatt, Phelps & Phillips, said, "In Oregon, they're serious. It helps make people sit up and take notice that this is something they have to deal with. This is a big shock to the body politic — it's a very red-state thing to do, and Oregon is very blue, so this shows it cut across everyone."

Both sides expect the measure to survive court appeals. The state and local governments are required by the new law to start accepting claims from property owners on December 2, 2004. If claims are found to be valid and the government will not or cannot pay, it must instead waive any restrictions that went into force after the owners — or their parents or grandparents — acquired the land.

Measure 37 has given new hope to property owners across the nation who strive to restore the basic civil right to own property. Oregonians In Action's Day says, "I've been getting calls from California, Idaho, Washington, Alaska and Wisconsin. They all want to find out what our secret recipe was to get it passed."

Oregonians In Action's campaign was masterful. It successfully showed the public just how arrogant and stupid Oregon's land-use rules were: One campaign advertisement showed a woman who was penalized for cutting blackberry bushes in her back yard in Portland — because it might become wildlife habitat. Not that it was wildlife habitat, that it might become wildlife habitat.

Another woman, Dorothy English, 92, became famous on drive-time radio spots in the final week of the campaign. English told of buying 20 acres in the hills west of Portland in 1953 and how all these years later government was still stopping her from subdividing residential lots on her ample land.

English's punch line got people's blood up: "I've always been fighting the government, and I'm not going to stop."

Measure 37 won a majority in all 35 of the state's counties except Benton County, which includes Corvallis and Oregon State University, and even won a thin majority in the ultra-left wing city of Portland.

Gov. Ted Kulongoski, a Democrat, opposed the compensation measure, warning that it could wreck land-use planning in Oregon. Voters disagreed.

Click here for the official documents of Measure 37.

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