[Paleopsych] NYT: Property Rights Law May Alter Oregon Landscape

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Property Rights Law May Alter Oregon Landscape
NYT November 26, 2004

[Note date. I continue to be dubious about judges running things, even and 
especially even, when they agree with me. A little economics is a 
dangerous thing.]

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

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

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

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

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

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

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

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."


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