Judge Overturns Oregon Ballot Measure 37

In a blow to the "property rights" movement, Marion County (Salem, OR) Circuit Judge Mary James ruled Friday that Measure 37 violates five provisions of the Oregon and US Constitutions; the case was MacPherson v. Department of Administrative Services. Voters passed the measure (60% in favor) in November 2004; a similiar measure, Ballot Measure 7, passed in November 2000 and was subsequently (in 2002) overruled by the Oregon Supreme Court. It is unknown if the state will appeal the decision.

Oregonians In Action, which sponsored the ballot measure, called the Judge's decision "the height of judicial activism." The suit was filed by 1000 Friends of Oregon, Sen. Hector MacPherson (who was an original sponsor of SB100 in 1973) and other landowners and farmers. The Winton-Salem Journal noted earlier this month that Oregon has carefully managed growth for 30 years:

For an outsider, it's easy to see the good that Oregon's thoughtful land-use regulation has accomplished. Sure, you see some sprawling apartment complexes and the chain stores, strip malls and fast-food restaurants that make so many U.S. cities seem interchangeable. But at a certain point - the urban-growth boundary - all that stops. Oregonians concede that the boundaries aren't the perfect solution, but they obviously are better than nothing...

The urban-growth boundaries, which are periodically re-evaluated, also encourage those who want to build to figure out ways to fill in, revamp and recycle those areas already touched by development. The result tends to be thriving cities surrounded by natural beauty and open spaces that are the delight of residents as well as tourists.

I've long held an opinion similar to this economist: fund future compensation claims for devalued property by heaving taxing the gains that occur when property values are increased due to government (public) action, such as the siting of a freeway on-ramp or other improvements.

Land Use Regulations
Why do we have land use regulations? A Republican economist reminds us that it is location that provides most of the economic value of a piece of land. Land use ordinances are designed to protect the "context within which the property exists" he contents, as he argues against "misunderstandings" perpetuated by the property rights movement.

Views, infrastructure, transportation systems, access, are all components of the physical force of value but are again external to the property line and are neither created nor exclusively paid for by the individual property owner.

So this concept of "It's mine and I can do whatever I want" is both historically incorrect and economically unsupported.

Ballot Language
Proponents of the initiative couched it in terms of "fairness." The explanatory statement on the ballot measure described the ballot measure like this:

[T]he owner of private real property is entitled to receive just compensation when a land use regulation is enacted after the owner or a family member became the owner of the property if the regulation restricts the use of the property and reduces its fair market value.

The initiative contained no funding source for compensation. The petition ballot title summary:

Currently, Oregon Constitution requires government(s) to pay owner "just compensation" when condemning private property or taking it by other action, including laws precluding all substantial beneficial or economically viable use. Measure enacts statute requiring that when state, city, county, metropolitan service district enacts or enforces land use regulation that restricts use of private real property or interest thereon, government must pay owner reduction in fair market value of affected property interest, or forgo enforcement. Governments may repeal, change, or not apply restrictions in lieu of payment; if compensation not timely paid, owner not subject to restrictions. Applies to restrictions enacted after “family member� (defined) acquired property. Creates civil right of action including attorney fees. Provides no new revenue source for payments. Certain exceptions. Other provisions.

Tip to Basie!; related story, Supremes Expand Eminent Domain Powers (Kelo v New London). Oregon ballot measures since 1990 ; Portland City Club analysis of Measure 7 and 37 (pdf).

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