The news reports about Measure 37 come blasting out of Oregon almost every day now. Faced with 75 land use claims totaling more than $100 million, Clackamas County in suburban Portland decided to settle the easy ones first - permitting small landowners to subdivide their property into a few additional lots. The City of Eugene is considering an ordinance that would require some development to be torn down after a property changes hands. Crook County, in sparsely populated eastern Oregon, decided to charge Measure 37 claimants the same fee as other development applicants - and then sued itself in hopes of clarifying the claims process. Multnomah County sought to get around Measure 37 by declaring that "a further division of real property is not a land use.” The county then permitted the measure's 92-year-old “poster child” to divide her 19-acre property into eight lots. In the Columbia River Gorge, there is a dispute over whether Measure 37 applies to restrictions imposed by a regional agency created by federal legislation.
Six months after the nation's most far-reaching property rights measure received 61% of the statewide vote, the consensus throughout Oregon seems to be clear: Measure 37 sent a message to the government, but it has unleashed a flurry of confused activity unparalleled since the passage of Proposition 13 in California almost 30 years ago. The Oregon law requires government agencies to permit longtime property owners to subdivide their property or else receive full compensation, but it leaves the administrative details to the local governments, most of which do not like Measure 37 and wish it had not passed.
At the same time, Measure 37's passage has emboldened property rights activists elsewhere to introduce similar bills. So far, no one in California seems to be mounting an initiative campaign. But in February, state Sen. Bill Morrow (R-Oceanside) introduced SB 725, which is similar to Measure 37. The bill is sitting in the Senate Judiciary Committee and is unlikely to go anywhere in the Democratic-controlled Legislature.
Like Proposition 13, Measure 37 was borne of populist resentment against big government, and its basic idea is simple: When the government passes a regulation that reduces the value of someone's property, the government should pay compensation - or else allow the landowners to develop their property as they would have been permitted to do under the old rules.
The measure was opposed by most influential political figures and organizations, including many business groups. The opponents outspent the proponents. And, of course, the measure was on the ballot in Oregon, which has had the toughest state planning law in the country for more than 30 years.
Even with all that, Measure 37 got 61% of the vote last November.
Since then, local governments - especially counties, where subdivision has been held in check by the state land use law - have received hundreds of claims from property owners whose plans for subdivision have long been stymied. This huge pent-up demand resulted in large part from the state's land-use law, which essentially prevents residential subdivision of farm and forest lands if they are located outside an area's urban growth boundary. This provision is the very essence of the Oregon land-use law, intended to protect working landscapes from sprawling subdivision and to drive urban development inside the growth boundaries.
Many of the claims are garden-variety requests for a few hundred thousand dollars and involve a dispute over subdividing one parcel into a few more. Other claims have been whoppers. In Bend, a hay-farming family asked for $37 million or the right to build 227 houses on 1,100 acres of land. In Hood River, a pear-farming family has asked for $57 million or the right to build 842 homes.
Some local governments have talked tough. In Multnomah County, where Portland is located, the county attorney concluded that restricting subdivision of land is not restricting land use and therefore is not covered by Measure 37. “A use of land is the employment of land for a particular purpose (e.g. residential, commercial, farm, forest),”
wrote Assistant County Attorney Sandy Duffy. “The Oregon Court of Appeals has recognized that platted but undeveloped land is not regarded as a 'use' in zoning law. (Parks v. Tillamook County). It follows that the process of subdividing land would not be a 'use' of land either.”
But Duffy's opinion, issued on March 14, did not prevent the Multnomah County Board of Commissioners from permitting 92-year-old Dorothy English to subdivide her property only three days later. Prohibited by law from developing the family farm, English had been the spokeswoman for the Measure 37 campaign. And early reports suggest that, despite lots of tough talk, most local governments are taking this same path of least resistance: Permit the subdivision rather than fight the claim or pay the money.
This is not surprising considering that Measure 37 did not create any new source of funds for government agencies to pay the claims. But the manner in which development may be permitted is cause for concern. Taking its cue from Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992), Measure 37 states that if the government imposes a land-use regulation that reduces the market value of any property, the property owner has the right to develop under the old land use regulation or else receive compensation. (Again following Lucas's cue, Measure 37 exempts public nuisances, hence leading jurisdictions such as Eugene to consider such development a nuisance.)
But there are a couple of other wrinkles in Measure 37. One is the fact that families are grandfathered into the law. If a property has been in the same family for 100 years, all regulations adopted since 1905 do not apply. In relevant terms, this means that families who have owned property for 30-plus years can get out from under the state's land use law. The second is that the law provides no requirement for public hearings or public review prior to granting the development approval. Local governments are adopting such procedures, but, in some cases, landowners will probably receive permission to subdivide with less public review than would have been the case decades ago.
To property rights activists, Measure 37 is the latest and most dramatic in a growing string of victories. Similar, though less stringent, laws have been passed in states like Texas, but there has been little pent-up demand for claims there. Yet the Measure 37 victory in Oregon may represent a double-edged sword. It holds the potential to be so disruptive that it could backfire. Various legislative changes to the initiative are in the works, and the backlash could lead to a bill or court ruling that punctures the fabric of the measure, especially if counties continue to give in to subdivision. That may mean that getting such a measure passed in California will be harder - unless voters decide they do not care about creating another post-initiative administrative nightmare.
