Passage of Oregon's Measure 37 Fiscally Threatens Growth Boundaries

Bob, what is Oregon Measure 37 and what will its affect be on 30 years of planning in Oregon?

Measure 37, which passed by a landslide in November, directs state and local governments to pay a property owner for the reduction in property value resulting from any change in zoning that took place after the current owner acquired the property. Further, if the local or state government is unable to pay or refuses to pay, the government is required to repeal or change the regulation, or grant a waiver, to allow development of the kind that the owner could have done prior to the regulation. So, property owners who have owned their land since before 1975, when the land conservation and development measure was first passed to allow the state to regulate land use, can claim the right to any kind of development on their land.

What issues led to Measure 37 being placed on the ballot?

One of the reasons we have an effective planning and zoning program in Oregon's countryside is that, by-and-large, farm families have supported farm re-zoning in Oregon. At first there were pioneering and visionary farmers, including the one who wrote the law, who led the way. County chapters of the farm bureau have signed on to support land use planning and propose changes to the existing zoning. This is because they see it as a mutual protection and limitation on themselves in much the same way that single-family zoning functions in town. A farmer gives up the right to develop his land as a subdivision and so does his neighbor, so that both can farm free from interference. It is insurance that I will continue to be able to be in business. There are property owners in rural areas, however, who have held their land with the hope that these regulations would be overturned and they would be able to build. These property owners are the nucleus of an organization that has been around for about twenty years and it helped organize disaffected voters to undue the farm zoning regulations by any means possible.

How did they win over the farmers who were the original base of the 1000 Friends of Oregon? What accounts for this political reversal in the rural counties?

Eighteen of the 36 counties took positions on the measure: 15 opposed it and three approved it. I think the counties didn't support the measure because they enjoy the protection from incompatible uses and receive tax breaks. However, 61 percent of the people of Oregon voted for this measure, and I think they did so because of the deceptively appealing title. The language stated, "Governments must pay or forego enforcement if land us regulations reduce the value of property." Polling revealed that, upon hearing the title, about 60 percent of people supported the measure. The language tapped into antipathy toward government, and the propensity for people to believe that something unfair had occurred. Our research indicated that people, by in large, didn't know that this was about planning and zoning, and they were impervious to the suggestion that it was. It is politically incorrect to say that this is anything other than the will of the people, but as research pointed out, very few people read the entire ballot measure.

How will 1000 Friends of Oregon respond to Measure 37?

We are trying to reconcile ourselves to the fact that Oregon's voters have some concerns about fairness and some mistrust of government. This needs to be addressed. This is the second time that our voters have voted for a measure that required compensation for regulatory effects on land value. In 2000, it was a constitutional amendment called Measure 7. Measure 7 was invalidated on technical grounds, but it passed with 53 percent of the vote. In 2004 it was measure 37. We have raised seven different constitutional challenges to this measure, but we also recognized that it is not sufficient to invalidate badly written laws in court; we need to address the root concerns.

We anticipate that in the current session, legislators will seek a compromise that will ensure that government acts fairly while also providing protection from incompatible uses for farmers. If this doesn't happen, counties across the state are going to have to grant waivers, because they will not have money to pay claims. People will advance claims for subdivisions on agricultural land that defy logic. There are no sewers, roadways or other infrastructure to support those kinds of developments. Under measure 37, neighbors have no right to block a claim or even to know that the government is granting a waiver. People are waking up to find that their neighbors claim the right to build large, city-scale development in the countryside.

One compromise being proposed by a progressive senator is to compensate property owners for any change in zoning that reduces the value of property by a given percentage or more. Our view is that hardship and unfairness should be defined in narrow terms. It may be a hardship claim worthy of compensation if you have been prevented from building your house. But if you are trying to take advantage of the fact that surrounding properties cannot be developed because the zoning regulations apply to them, thereby creating enormous demand for your property, that doesn't seem reasonable.

What was the justification for land use zoning 30 years ago? What is potentially being lost under Measure 37?

Oregon was a pioneer at the state level with respect to conservation of farmland and forests in 1973, when the first laws were passed which defined and divided areas of urban growth from the countryside. Having pioneered that system, we took those techniques to fairly detailed levels. Oregon's rural land use zoning has gone through numerous changes, and according to some is overly bureaucratized. Urban growth boundary law and policy is becoming more complex in order to deal with rapid changes in population and the responsibility of communities to provide room for growth. We have a robust set of laws to ensure that there is adequate room for development -- compact development -- and to maintain the landscapes that are a key part of this state's heritage. Those are all at risk when you can put a 200-unit subdivision five miles outside the urban growth boundary on prime agricultural land because you have owned the land long enough.

Nearly a third of the farmland surrounding Portland has not changed ownership since the law was changed. It takes just one bad apple to spoil the batch. If I am a farmer, and my next-door neighbor decides to make a claim, I would find it uneconomical to continue my farm operation, and I may be driven to do the same thing. We are concerned about a domino effect in key areas. This will undermine all the advantages of compact development inside an urban growth boundary. The cost of providing urban services will increase and we expect more pressure on parts of the state highway system. This has the potential to completely undo the effective planning that has been accomplished in Oregon.

Few, if any, states were able to follow Oregon's lead in 1973 with regard to enacting these state land use and planning laws. Is the message from the passage of Measure 37 that we may never see another state do so?

We waited a long time for other states to come forward. Washington State adopted its Growth Management Act in 1990 or 1992. It is more narrowly applied to certain fast-growth counties. It does, however, establish urban growth limits and has conservation policies for rural land. These policies are not as stringent as those in Oregon, but it is a similar model.

Now we are seeing the counter-trend. My counterpart at the 1000 Friends of Washington, tells me he has already hired somebody to serve as campaign director because he expects the property rights activists in Washington State to run a carbon copy of Measure 37 in November of 2005. Montana has had four property rights and compensation bills introduced in the current session of the legislative assembly. In Colorado, a bill has been introduced that is a word-for-word copy of Measure 37. It is possible that those legislatures will dispose of those bills because they are extreme, but it is also possible that property rights activists in those states will put them on the ballot. We may be exporting a different kind of land use revolution. I think other states will continue to try and implement Oregon's planning policies, though.

What are the legal options for 1000 Friends of Oregon and its supporters with regard to mitigating the effects of Measure 37?

There are two strategies: one is litigation, and the other is working in the legislature to come up with a compromise. It has been rewarding to see county farm bureaus come forward and join as co-plaintiffs in litigation against Measure 37, and we have good prospects for prevailing, but that is not going to be sufficient. We have to try and develop a substitute measure. Our goal is to eliminate the power to grant waivers, so that we don't have incompatible developments occurring in the countryside, or in city neighborhoods. But that means we have to find a compensation strategy.

Oregon has no money to spare, and local governments have no extra resources to pay people not to build in violation of zoning. One way to deal with this might be to develop a system of transferable development credits. Under this system, every claimant under Measure 37 would be given some number of credits, rather than the right to build units. In areas designated by the state and local governments, property owners would be unable to develop until they purchase those credits from rural property owners who were never able to build.

In Oregon, because we have an urban growth boundary, we could require that every urban growth boundary amendment to expand the boundary would require that development rights be purchased from the holders of credits in the countryside. In this way, we could use the next thirty years of urban growth in Oregon as a source of indirect funding for compensation of the 10,000 to 20,000 thousand claims in the countryside. By doing this we would be bonding against that future revenue stream, paying people today based on development value that will occur in urban growth boundary expansion areas in the future, and yet spreading that widely enough so that it doesn't act as an impediment to rational urban expansion. That outcome would turn this sort of hodgepodge development under waivers of Measure 37 into a fairly elegant mechanism to reinforce our urban growth management strategy and to reinforce the protection of the countryside because you would be putting money into the pockets of people who are now required to keep that land.

Bob, your resume is impressive. You are a former chief of staff to Portland Congressman Earl Blumenauer. You have been Portland's planning director. You have a prominent member of a law firm dealing with land use issues in Oregon. You are now the director of 1000 friends of Oregon. With such credentials, it's fair to ask: What policies work and what policies do not?

I think the lesson is that there are real opportunities ahead of us, in every community in America, to use innovative techniques -- like payment to property owners in certain circumstances -- to reinforce the zoning pattern. Planners in states that don't have statewide land use zoning laws that require a particular kind of protection strategy have been doing these things for years. For example, Pennsylvania has acquired easements on farmland as a means of protecting that land base. We have been somewhat disdainful of this strategy because it costs so much money, and until now we have been able to protect 15 million acres of farm- and ranchland without paying a dime.

I believe we will have to begin collaborating to implement some of these new strategies. In Oregon, we could partner with the farm bureau to match funds to buy conservation easements on farmland, using money from transferable development credits.

This lesson, that we will have to change our approach to land use planning, is fairly recent, but it has been coming for a long time.

Should our readers be concerned that Measure 37 may undermine the principle that there is value in planning, that through planning we can become the architects of our communities, regions and states?

I think it is dangerous to read too much into the vote on Measure 37. Sixty-one percent of the people liked the ballot title. We know that. I don't think 61 percent of the people want to eliminate our system of planning and forego the outcomes that we have enjoyed. To the contrary, polling data show that by a similar margin Oregonians support land use planning and zoning. It is clear that Portland in particular, and Oregon in general, have benefited from this system. Portland, as you know, is very creative. Other communities have revitalized their central cities like Portland did in the 1990's. Portland's successes have been buttressed by the fact that we have this planning infrastructure around the city of Portland, and around the other cities in the state. That is an important accomplishment. It is one that other communities could still aspire to, and I do not think it is permanently wrecked by what has happened.

In closing, rumors abound that there are Southern California developers, after Measure 37, who are interested in developing Oregon's farmland parcels. Is this known?

Well, turnabout is fair play. If Portland developers are down there reaping the benefits of an underutilized Downtown LA, then it is conceivable that there are Southern California developers taking advantage of the changes that Measure 37 brought about.