The Aftermath Of Measure 37: Resisting The National Eminent Domain Backlash

Planetizen Correspondent Erik Kancler interviews Bob Stacey, Executive Director of 1,000 Friends of Oregon, on the need to restore progressive land use planning practices in the state. Since the passage of Measure 37, says Stacey, land use practices in Oregon have entered a state of chaos.

Erik Kancler

When Oregon voters passed Ballot Measure 37 in November of 2004, the legacy of three decades of progressive land use planning was thrown into doubt. The legacy of the state's pioneering development of urban growth boundaries, promoting concentrated growth through strict zoning, could be erased.

Many feel the measure -- which dictates that if government can't or won't pay compensation when zoning regulations reduce property values, a waiver must be granted to exempt the owner from some or all of the property's current zoning restrictions and permit a use that was allowable when it was purchased -- was passed largely as a symbolic attempt to restore the rights of long-time rural landowners to build a home on their land.

Measure 37 certainly accomplishes that goal, yet has also resulted in hundreds of waivers for large residential subdivisions and commercial developments outside of urban growth boundaries and throughout the rural agricultural landscape. The fundamental certainty of urban zoning as a whole has also been called into question.

In this Planetizen interview, Bob Stacey, Executive Director of 1,000 Friends of Oregon, a group, according to Stacey, devoted to the proper implementation of the state's land use policies and to the fight against Measure 37, believes that with many governments unwilling or scared to interpret the measure narrowly, and broad regulatory uncertainties yet to be resolved, land use planning in Oregon is in a state of chaos.

This interview has been edited down from a longer version.

Planetizen Interview With Bob Stacey Of 1,000 Friends Of Oregon

Conducted by Planetizen Correspondent Erik Kancler

Erik Kancler: It's been over three decades since Governor Tom McCall ushered in an era of progressive land use policies in Oregon. Measure 37 is obviously a manifestation of an opposition to that system. What is this reaction rooted in?

Bob Stacey: Well, McCall started a wave of progressive land use planning in Oregon that accomplished a lot of things. There are, however, a lot of regulatory constraints on property owners.

Against the backdrop of broad public support for good land use planning -- which has shown up in polls time after time -- and in spite of the strong support from many sectors of agriculture, there are property owners who have always been disaffected because their land was down-zoned or zoned for farming or timber rather than housing back in the seventies. Now, that's a small number of voters, but those are strongly held opinions.

Then there are other property owners who have been surprised to learn that when they bought land in the countryside they couldn't build a house on it unless they were farming. Finally, there are stories about people who should have been able to build a house, but for some reason couldn't. And although there may be a good public policy reason for that, it doesn't necessarily apply well in every case.

There are two schools of thought about where Measure 37 comes from - the right one and the wrong one.

The right one is that there's a small minority of property owners who feel personally aggrieved and injured and who felt that way for thirty years. And of course, there is a conservative, libertarian property-rights movement, nationally and in Oregon, that finds an issue like this tailor-made for advancing their arguments. So you couple that philosophical bent and that political agenda with an aggrieved minority and you have motivation to run campaigns designed to tear down land use planning based upon the stories of aggrieved victims.

And then there is the wrong argument. And that is that supporters of land use planning have been so inflexible and have hurt so many people that there's now a significant majority of people who either have been hurt themselves, know someone or read about someone who has been hurt and there are no good answers for those injustices.

And that's just false.

But all Oregonians have a bit of a libertarian streak running through them, so they respond when they hear about injustice. And you have stories like that of Dorothy English, a ninety-four year old widow, couldn't build the dream home that she and her late husband always planned, because Multnomah County designated their 19 acres as forest land. That's a hard story!

Oregonians heard that on the radio, in TV ads, and that little old lady was one of the recurring reasons people gave for saying they paid attention to Measure 37.

But voters didn't understand what the underlying policies were, didn't understand anything about the facts, weren't told anything about the underlying facts by the campaign for Measure 37.

If a pollster asked them whether they believed Measure 37 would allow the conversion of farmland to suburban development, they said that argument was persuasive if it was true, but that's not what they believed Measure 37 would do.

Supporters of sound land use planning tend to worry that it's been rejected. But in a March 2005 poll, the Oregon Business Association and Portland State University asked voters what they thought about land use planning and what they thought about property rights and the respondents basically said, "we support them both!"

EK: People's attitudes, in other words, haven't really changed.

BS: About 60% of voters said that they liked this idea that government should pay and about 65% said that that planning for the future is very important. So people believe both things.

EK: Was the pro-Measure 37 campaign a disingenuous one or merely good campaign strategy?

BS: Was it disingenuous? Sure. Was it a winning campaign? You bet.

It falls to supporters of land use planning to explain why voters would vote for that if they really do support land use planning.

EK: There's a national perspective to this debate as well, and that includes the public reaction to the Kelo vs. City of New London Supreme Court decision on eminent domain powers, and the push to weaken the Endangered Species Act. Where does Measure 37 fit in?

BS: Libertarian activists around the country see Measure 37 as a potential "Big Win" that can be replicated elsewhere. It's spawned a cottage industry, not only for Oregonians in Action, whose leaders went on the speaking circuit during 2005, but also for homegrown campaigns. There's going to be a Measure 37-like resolution on the June 6th ballot in Napa County California. It's opposed by the farm bureau and the county supervisors there. It's probably too close to call.

An initiative has been filed in Washington State - which has it's own statewide growth management policy - for a Measure 37-like statute, and there's been action in the Colorado, South Carolina, Georgia, and Wisconsin legislatures, among others.

EK: The Wisconsin state senate tossed that out. Suffice it to say, a number of state and local governments are looking to ride the tailwind here.

BS: There has also been consideration in the Arizona legislature for passing legislation that would prohibit Kelo-type eminent domain actions and require compensation or waivers for property-value reductions, a la Measure 37.

It's interesting to see them try to confound two different functions of government - eminent domain and zoning - into one easy message. The message, of course, is big government is scary.

EK: I'd like to make an observation here. From one perspective, zoning laws restrict certain economic opportunities for landowners. Yet zoning laws also create economic certainty for larger communities, namely, you probably can't put a potentially lucrative hog farm in your backyard. But then neither can your up-wind neighbor. Most people would say this is a good thing.

So it seems that there's a fundamental valuation problem there.

BS: It's more fundamental than that even. The real question is, "What was the actual reduction in value when restrictive zoning was attached to that land?" Or in other words, "Did it impact the market-place expectations upon which people based their original purchase?"

Let's say it was 1965 and you bought some farmland close to the county seat, and the county had finally gotten around to doing some land use planning. Maybe they decided to place acreage residential zoning across a band of land around the county seat as a buffer, and so they zone the land for five-acre lot sizes. And so you buy some of this land and think, "You know? Someday I'm going to subdivide." And then along comes LCDC and down-zones it to farm land.

Now those people might have bought with one set of expectations, and paid more for that land. They could be able to show a real monetary loss.

But that's not what the typical property owner is doing. Instead, they are saying, "Give me a waiver or give me $10 million." Where do they get the $10 million? They say, "If I didn't have to follow the law that applies to my land and all my neighbors, I could sell it for the kind of development that's happening inside the urban growth boundary."

The fact that zoning says you can't do this, however, isn't a reduction in the value of your land, it's simply that somebody else has gotten an increase in value because they're inside the urban growth boundary and you weren't included in the urban growth boundary.

EK: How do you restore the balance that zoning is supposed to provide?

BS: Find a way either to compensate people for their actual losses or give them a way to recover those losses themselves.

Take my property owner who was down-zoned from five-acre home sites to farm use. Say his land value was reduced by $500/acre because afterwards he could only sell it for farming. Now, he could make money from farming, but not as much as if he could sell it for development. So take $500 per acre times, say, 100 acres, and carry that forward into 2006 dollars.

Now that may amount to one additional parcel with a building right on it. Or maybe two home sites. But it's probably not going to be the fifty house subdivision that the county is being asked to approve.

EK: And that sounds fair to you?

BS: I think that's what the voters approved and frankly I believe that's what Measure 37 says. But people have been in such a tizzy that it's been read fast and applied recklessly.

EK: Have any local governments mounted challenges to Measure 37?

BS: When we make our case to decision makers that they're not thinking carefully enough about what the law says, we get two interesting answers.

First, "But how can we change now?" And second, "If we change now and we lose, Measure 37 gives attorney fees to the claimants. I could have 100 claimants suing my county at the same time and all seeking an attorney fee judgment."

Now, a government that doesn't have money to pay claims is a government that probably doesn't have money to pay lawyers fees. That's public policy by intimidation.

EK: How do you rid local and state governments of the intimidation factor?

BS: Simply by clarifying the law and sorting out the ambiguities. How do you value a loss? Well, why don't we say that in black and white? A couple of appraisal methods could be written right into the law.

EK: So clarification would give local governments a chance to clearly ask for these things without worry of being sued.

BS: Right. And it limits those governments that view measure 37 as an excuse to gut their own planning and zoning to grant limited waivers that restore what people lost without hurting neighboring property owners and undoing public policies that protect the tax payers, the environment, and the community.

EK: From this perspective, would Measure 37 be much of an affront to Oregon's land use system?

BS: There would be cases where farmers who would prefer not to have the interference of additional neighbors will have the interference of additional neighbors. But they'll have two or three rather than 200 or 300. I think that on the balance, people will grin and bare it. In terms of the principle that government ought to be able to regulate in the public interest? It's a diminution of that principle.

Right now, governments are saying, "No use talking about amending our comprehensive plan and zoning because somebody's going to argue that change reduces their property value and unless we're willing to defend ourselves in court and risk an attorney fee judgment, we're gonna have to waive it."

But with Measure 37 attacking the countryside, that's a second-tier issue right now.

Erik Kancler is a professional journalist and planning consultant living in Central Oregon where he works as a staff writer for The Source Weekly, a contributing writer for the California Planning & Development Report, and a Research Affiliate for Solimar Research Group.