Oregon has a complicated history of land use regulation; its far-reaching land use program has proven to be successful but controversial. Oregon’s first statewide planning bill—Senate Bill 100—has been repeatedly challenged through ballot initiatives since its adoption in 1973.
Oregon established the nation’s first comprehensive land use planning system with Senate Bill 100. The bill identified the original statewide planning goals, established land use restrictions for counties, and called for cities to establish urban growth boundaries and adopt comprehensive plans. The bill also created the State’s Land Conservation and Development Commission (LCDC) to make policy decisions and the State Department of Land Conservation and Development (DLCD) to serve as the administrative arm of the program.
More recent and substantive challenges to Oregon’s extensive land use regulations began in 2000 with adoption of Measure 7. Fueled by the perception that private property owners were unfairly hampered by the state’s planning program, voters approved an amendment to the Oregon Constitution that required the government to compensate landowners who suffered a loss in property value due to land use regulations.
The ballot passed 54 percent to 46 percent, but was later struck down by the Oregon Supreme Court for violating the "separate vote" requirement of the Oregon Constitution. This paved the way for private property rights advocates to launch another campaign that would result in the passage of Measure 37 in 2004.
Measure 37
Under Measure 37, local government entities were required to compensate landowners for property value lost due to land use regulations enacted after the landowner acquired the property, or to waive the regulation for the landowner altogether (regulations restricting common law public nuisances, ensuring public health and safety and compliance with federal law, or prohibiting pornographic activities were exempt). Adopted 61 percent to 39 percent, Measure 37 virtually echoed—with some exceptions—Measure 7’s objective of ensuring private property owners compensation.
Measure 37 retroactively allowed landowners two years to apply for compensation for any loss in property value arising from land use regulations enacted after the claimant—or family member—acquired the property. The implications were far-reaching; planners, environmentalists and community members quickly protested that Measure 37 undermined Oregon’s historically comprehensive and progressive land use planning system.
With limited funds and inadequate administrative capability to handle the influx of claims, cities were left waiving land use regulations rather than compensating property owners for a loss in property value. Critics of Measure 37 saw that the patchwork of regulatory exemptions in rural areas could threaten Oregon’s long-established urban growth boundaries. Although critics challenged the new law as unconstitutional, the Oregon Supreme Court upheld its legality in 2006.
Several problems with the new law became clear when Measure 37 claims appeared before the courts. Waivers granted to landowners were not transferable to future landowners and there was no set way of calculating compensation due to claimants. Which governmental entities were required to compensate landowners or had the authority or issue waivers was also unclear.
Despite these ambiguities, by 2007 more than 7,000 claims were filed, seeking compensation of $20 billion and covering more than 800,000 acres. Most of the claims filed dealt with residential subdivisions located within five miles of an urban growth boundary in the agriculturally rich Willamette Valley region. The largest claims were filed by lumber companies.
Measure 49
Because media campaigns launched in 2004 during the Measure 37 initiative focused on the protection of small property owners, little attention was paid to the lumber industries and residential developers that sought to gain significantly from the measure’s passage. Public resentment over the use of Measure 37 for commercial and industrial development grew, leading to the approval of Measure 49, a ballot initiative which severely curbed the applicability and extent of its predecessor.
Measure 49—adopted in 2007 with 67 percent voter approval—significantly modified Measure 37. It prohibits claims on nonresidential land uses, sets a maximum cap of 10 homes total per claimant, and requires claimants wanting to construct more than three homes on a site to prove loss of property value, under a new formula, stemming from current administrative regulation. It also extended Measure 37 waivers to future landowners and prohibited the subdivision of special farmlands, forestlands and groundwater-restricted lands.
Due to Measure 49, large payouts or massive development have not resulted from the enactment of Measure 37. In fact, few claimants have been compensated for lost property value and few developments have been built since the Oregon Supreme Court ruled that Measure 49 invalidated most Measure 37 regulation waivers.
The only waivers approved under Measure 37 that still stand are those that have resulted in the development of a common law "vested right" for the landowner; if a "vested right" to develop or subdivide the lot was created before Measure 49 was adopted, the landowner can proceed with the already-approved development. For now, courts continue to grapple with the question of exactly what sort of reliance a landowner has to exhibit in order to claim a vested right.
Ballot Initiatives to Legislative Action
This recent series of ballot initiatives made the governor’s office and state legislature recognize the vulnerability of Oregon’s statewide planning program. Since its inception in 1973, the program had not undergone a comprehensive review to ensure continuing fulfillment of the state’s goals for livability, resource protection and economic development.
In 2005 the legislature passed Senate Bill 82, creating a task force to conduct a comprehensive review of the statewide planning program. By 2009, the task force had recommended a package of legislative amendments to revamp parts of the planning program. The extent of these amendments will be covered next week in part two of this two-part series on the evolution of Oregon’s Statewide Planning Program.
