Wednesday, January 25, 2006

Lewallen, Sandefur and Gieseler on Measure 37

Leslie Marshall Lewallen, Timothy Sandefur and Steven Geoffrey Gieseler (all of the Pacific Legal Foundation) have posted Measure 37:  Paying People For What We Take on SSRN.  Here's the abstract:

For decades, landowners in Oregon have suffered under one of the most restrictive land-use regimes in the nation. Among the many ills this system fostered was a failure to compensate owners when land use restrictions resulted in a diminution of the value of their property. Property owners seeking judicial enforcement of their constitutional right to be compensated found no such protection. Therefore, in 2004 the voters of Oregon took it upon themselves to enact Measure 37, an initiative requiring state and local governments to compensate landowners where land use regulations result in decreased property values. Incredibly, an Oregon circuit judge struck down Measure 37 in October, claiming among other things that the people of Oregon had no right to limit the powers of their elected officials.

This Article examines the events that led to, and resulted from, Oregon’s enactment of Measure 37. In particular, it looks at the theory behind the doctrine of regulatory takings, advocating the position that governments can “take” property without physically occupying it. With this theoretical baseline in place, the Article recounts the regulatory nightmare that is Oregon’s land use apparatus, and recounts the steps that led the state’s voters to finally do something about it in the form of Measure 37. Finally, the Article concludes by critiquing the unfortunate decision invalidating Measure 37, with emphasis on the court’s argument that citizens are powerless to limit the authority of their own legislature.

Regular readers of this blog will know that I have quite a bit of sympathy for the property-owner's side on regulatory takings issues.  I think it is a shortcoming of this article, however, that Lewallen et al never make a convincing transition from criticism of the current regulatory takings doctrine that denies property owners compensation for substantial diminutions of value to support for a statute that requires compensation for any diminution in value.  I don't think there is a convincing argument that compensation for any diminution of value is (a) mandated by the constitution, (b) supported by any caselaw, or (c) a good idea.  I also think that some aspects of the article (and of Measure 37) are based on the flawed idea that "police power regulations, rightly understood [are] laws which protect individuals' rights to use their land and their faculties without interference from others."  (I discuss the scope of the police power at length in this article).

That said, the voter anger behind Measure 37 is isn't going anywhere. Lewallen et al provide an important perspective on that voter anger (as did Sara Galvan's essay on Measure 37).  Even if the Oregon courts ultimately invalidate Measure 37, voter pressure is likely to require Oregon to do something to make its land-use law more responsive to property owners' concerns.

Ben Barros

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I think, in an alternate universe (more in line with reality) the opening line of this abstract should read:

"For decades, citizens and the environment in Oregon have prospered under one of the most progressive land-use planning systems in the nation."

But if that were the opening line of the abstract, the title of the paper would have to be something along the lines of "Paying for what we take, and making people pay for what we give." All land use regulations can create property value as much as reduce property value, and confer upon all landowners and citizens an average reciprocity of advantage.

Needless to say, the IJ position is extreme and unsupportable.

Posted by: Kurt Paulsen | Jan 25, 2006 10:44:45 AM

Kurt, I agree to a certain extent. The problem is that land-use regulation often does not provide an average reciprocity of advantage. Take an owner of undeveloped land in Oregon. A regulation that prevents the owner from doing anything with the land other than preserving it as open space creates a great public benefit. Owners of developed land benefit from the regulation, but the costs are placed entirely on the owner of the undeveloped land. I agree that Measure 37 is extreme, but something has to be done to make Oregon's land-use system (which is often held up as a model in planning circles) at least a little more friendly to property owners -- something between Measure 37 and the current model of telling property owners to shut up and take it. Measure 37 passed by a huge margin despite the fact that opponents of the measure spent a lot more money than the proponents. The voter anger isn't going to go away.

Posted by: Ben Barros | Jan 25, 2006 11:46:50 AM

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