November 26, 2004
New York Times
By FELICITY BARRINGER
PORTLAND, Ore., Nov. 20 - Over the past three decades, Oregon has
earned a reputation for having the most restrictive land-use rules in the
nation. Housing was grouped in and near the cities, while vast parcels of
farmland and forests were untouched by so much as a suburban cul-de-sac.
Environmentalists and advocates for "smart growth" cheered the
ever-growing list of rules as visionary, while some landowners, timber
companies and political allies cried foul.
But in a matter of days, the landowners will get a chance to turn the
tables. Under a ballot measure approved on Nov. 2, 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.
Supporters of the measure, which passed 60 percent to 40 percent, call
it a landmark in a 30-year battle over property rights.
"I've been getting calls from California, Idaho, Washington, Alaska
and Wisconsin," said Ross Day, a Portland lawyer for the conservative group
Oregonians in Action who co-wrote the law, Ballot Measure 37. "They all want
to find out what our secret recipe was to get it passed."
Whatever the benefits of Oregon's land-use rules, Mr. Day added, "the
people paying the cost are property owners."
"If Enron does something like this, people call it theft," he said.
"If Oregon does it, they call it land-use planning."
Richard J. Lazarus, a professor at the Georgetown University Law
Center who specializes in environmental law, called the measure a blunt
instrument that could undermine all zoning and environmental protections and
undercut land values. "If you can build a little Houston anywhere, or a
gravel pit or a shopping center next to your home, you don't have
maximization of property values," Professor Lazarus said.
"If you fail to regulate now, you're reducing property values for
future Oregonians," he continued. "A lot of what government is doing in
environmental protection is at least trying to balance the needs of present
and future generations."
The new law, Professor Lazarus said, "is one of those very simple
solutions, but, boy, did they open a can of worms."
Conservatives across the country have championed the idea of
compensation for aggrieved landowners since at least the mid-1990's and the
1994 Republican "Contract With America." Four states have laws dating from
that period that provide some compensation for affected property owners.
"In Oregon, they're serious," said Michael M. Berger, a partner in the
Los Angeles law firm of Manatt, Phelps & Phillips. "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 judicial scrutiny, and the
state and local governments are to start fielding claims on Dec. 2. 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.
Some fear that the state will be unable to pay and that hillsides in
the Cascades now bristling with fir trees and pear orchards could sprout a
crop of McMansions, Wal-Marts or resort condominiums in a few years.
The supporters of the new law successfully depicted the current plight
of property owners in a campaign with a decidedly populist edge. One
advertisement showed a woman penalized for cutting blackberry bushes -
potential wildlife habitat - in her backyard in Portland.
Another woman, Dorothy English, 92, was a fixture on drive-time radio
advertisements in the final week of the campaign. Ms. English bought land in
the hills west of Portland in 1953 and is still fighting for the right to
carve several lucrative building lots out of the 20 acres she has left.
"They've made fools of people in this state," she said last Wednesday. "I've
always been fighting the government and I'm not going to stop."
The Hood River Valley, 60 miles east of Portland and the source of
more than a third of the nation's Bosc pears, is one of the places that
could be most affected. Many of the farmers are the third or fourth
generations of their families to work the same land. Most land-use
regulation came after their families did, so their claims could be extensive
and expensive. The valley nestles along the Columbia River Gorge, a strong
draw for windsurfers; the development pressure is strong.
Sitting in their living room in the town of Hood River, overlooking
fields newly planted in cherries, John Benton and his wife, Julie, both 57,
said that their income was eroding and that their 100-acre farm had "barely
supported us." The Bentons, whose family ownership dates to 1910, said that
orchard farmers like themselves could not make a living without an infusion
of cash from selling land for home construction.
By contrast, their neighbor Fritz VonLubken, who is 69 and bought his
orchards from a grandfather who came to the area in 1912, said he believed
that farmland needed to be preserved. "You zone for industrial districts,"
Mr. VonLubken said. "Well, farming is an industry. It needs to be protected.
We're a high-value business, and this is the best location for us."
Mike McCarthy, whose 250 acres scattered on the northeastern apron of
Mount Hood produce a plentiful crop of pears, said, "These are the most
productive soils in Oregon," and, as such, were irreplaceable.
The success of the ballot measure has led advocates of planning to do
some soul searching. It won a majority in all 35 of the state's counties
except the one that encompasses Corvallis and Oregon State University and
got a thin majority even in the progressive city of Portland.
"It definitely calls into question a lot of the mechanisms we have
now," said David Bragdon, the president of the Metro Council, which sets the
growth parameters for 460 square miles in three metropolitan Portland
counties. "And it undermines the mechanisms we have."
Mr. Bragdon added, "There is a resentment in rural areas of urban
policy makers and the urban elite."
The long-used planning philosophy is wryly called "timberland,
farmland and ring around the city." Each county has established "urban
growth boundaries" around its cities and has tried to keep most development
to areas within them.
On farmland, houses can be built only under strict conditions - for
instance, the buyer must show that he can generate $80,000 in annual gross
income from farming for a period of years before he can build. Nonfarm
dwellings are allowed only in areas with poor soil. In return, farmers
receive substantial property tax breaks; their land may be assessed at as
little as 0.5 percent of land where development is encouraged.
Even if they succeed, farmers who fight to have the urban growth
boundary extended to their lands must pay a one-time tax amounting to
perhaps 7.5 percent of the land's new value - in addition to federal and
state capital gains taxes on the sale of the property. Thanks to such tight
policies, suburban sprawl has been largely banished in Oregon.
Gov. Theodore R. Kulongoski, a Democrat who opposed the compensation
measure, said last week that he would push to have claims paid rather than
tear holes in the state's land-use system.
But, like many other states, Oregon is strapped. To pay the claims,
some pro-planning forces suggest setting high taxes on the profits on newly
developable land. If, instead, the government grants exemptions to land-use
rules, many property owners might want to sell for the ready profit.
Mr. VonLubken, like Professor Lazarus, said he believed that the first
wave of farmland sales would be the most lucrative and that those new
residents, having paid a premium for bucolic splendor, would support
regulation to help keep a second wave of newcomers away.
The state's population grew 20.4 percent in the 1990's, to about 3.4
million people in 2000. The federal government, largely through the Forest
Service, is the largest landowner in Oregon; state, tribal and federal lands
constitute about 55 percent of the state's total acreage. Of the remaining
27.7 million acres of privately held land, 56 percent is farmland.
Others states that allow for compensation for aggrieved property
owners are Florida, Texas, Louisiana and Mississippi. But they set a
threshold, for instance a 25 percent reduction in a property's value, and
will pay only for losses caused by new land-use rules. The retroactive
feature of the Oregon law could affect many more people. Until the claims
start, though, no one will hazard a guess at just how much land will be
affected, and at what cost.
"It's no coincidence that they passed this Measure 37 in a state that
has prided itself on having the most extensive planning and regulatory
scheme for rural lands," said J. David Breemer, a staff lawyer with the
Pacific Legal Foundation, a conservative advocacy organization. "This type
of initiative and legislation will be more common now."
The planners, however, are still flying their flags.
"Quality of life is something that is shared," said Robert Liberty, a
former president of 1,000 Friends of Oregon, an ardent pro-planning group,
who was just elected to the board of the Portland regional planning agency.
"A golf course is not. A four-car garage is not. One of the best things
about the planning process is that it makes a better community for everyone,
regardless of income."