Oregon Counties Should Honor Measure 37 Waivers

Oregon Counties Should Honor Measure 37 Waivers
By Margaret Goodwin,

Few people would argue that the state should be allowed to appropriate private property without compensation. But does the state have the right to legislate away the value of your property without compensation? When someone buys land, the purchase price takes into account the potential for development of the land. If land use regulations are later changed in a way that precludes development, the land loses a significant amount of its value. From the perspective of the property owner, this is the same situation as eminent domain. The 5th amendment prohibits the government from taking private property for public use without just compensation. How fine is the line between appropriating private property for public use and appropriating the use of private property for public benefit?

In the 1970s, Oregon enacted broad land use reforms for the purpose of preserving forest and farm lands throughout the state. Over the succeeding decades, it became increasingly clear that those policy changes were causing significant economic injury to those who had purchased property in good faith with the intent of long-term development. When someone purchases property, the land use regulations in effect at the time establish a justifiable reliance on the part of the purchaser that they’ll be able to use the property for any purpose that’s lawful under those regulations. When the rules of the game are changed after the players have bought in, that’s known as bait and switch.

In 2004, Measure 37 was passed to redress these justifiable grievances and ensure that the adversely affected property owners would receive fair compensation for the loss of value incurred by the changes in government policy. As it turned out, the economic impact far exceeded any compensation the state was prepared to make. However, Measure 37 also had a provision that gave the state the option to “grandfather in” existing property owners, granting them a waiver to exempt them from the new zoning laws, and allow them the lawful use of their property under the regulations that were in effect at the time it was purchased. The property value was restored to the property owners, and the state incurred no liability.

Almost immediately, however, there was a backlash from environmental and anti-development interests who had originally pressed for the land use reforms. They drafted up Measure 49 and sold it to the public by painting the property owners as greedy developers who want to pave over our forests and farmlands and turn them into ugly housing developments. In the counties with larger populations, that are already more heavily developed, Measure 49 passed easily. In counties like Jackson and Josephine, where there are more people actually impacted by these Measures, the votes ran overwhelmingly against it. But the more populous counties carried the day and Measure 49 passed. Under Measure 49, the property owners neither receive just compensation, nor are they grandfathered in. Rather, they can apply for permission to build up to 10 houses on their property, but no more, regardless of the extent of the property or what the original zoning allowed.

Now the counties are caught between a rock and a hard place. The state has threatened to sue any county that honors the Measure 37 waivers they issued. The claimants, who have valid waivers, lawfully issued by the counties, will sue the counties if those waivers are not honored. So each county must decide whether to face one lawsuit from the state, or hundreds of lawsuits from the individual Measure 37 claimants whose waivers were granted before Measure 49 was passed. There are over 300 of these in Josephine County, and over 500 in Jackson County. With the loss of the O&C funding, a number of counties are already facing potential bankruptcy. They simply don’t have the resources to take on hundreds of lawsuits, where damages will run in the millions of dollars. — Especially when fairness and justice are on the side of the claimants.

The counties should do the right thing. If the state does sue the counties, even if the state were to win, I would expect the decisions to be overturned on appeal. The United States Constitution supersedes Measure 49, and both the fifth and fourteenth amendments ought to protect the property rights of the claimants from appropriation by the government without due process or just compensation.

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