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Measure 37 overturned: State will seek to set aside judge's ruling on property-rights law

The Associated Press

SALEM ' A judge Friday struck down as unconstitutional Measure 37 ' the voter-passed property rights law that had required state and local governments to pay owners whose land was affected by land-use regulations, relaxing some of America's strictest zoning laws.

Land-use policies adopted by the state in 1973 have been widely regarded as a national model for protecting America's farmland and other open space from unbridled development. The combination of local and state regulations had confined most new housing to areas that already are built up.

But a property owners' revolt led an overwhelming margin of voters last November to pass Measure 37, a state law requiring that state and local governments either compensate land owners when regulations lower property values or waive the rules.

In the decision Friday, Marion County Circuit Judge Mary James ruled Measure 37 violated five provisions of the state and federal constitutions.

Her decision created more confusion around a law that already has perplexed officials, who are unsure how to enforce it. The law is now bound for further appeals and legal tussling.

— Judge James sided with opponents of the measure who argued that it violates the equal privileges and immunities provisions of the state constitution because it gives benefits to people who bought their land before regulations were applied but not to those who purchase property later.

Kevin Neely, a spokesman for the Oregon attorney general's office, said the state would seek a stay of James' decision pending an appeal.

Dave Hunnicutt, the president of Oregonians in Action and main author of Measure 37, said the ruling was a complete surprise.

He said it would be impossible to craft any measure giving property owners compensation that would pass the tests created by James.

The ruling is novel, to put it bluntly, said Hunnicutt. We are predicting a different outcome on appeal. If Judge James' ruling stands, then there is nothing property owners can do in this state to protect themselves.

Since Measure 37 passed last fall, more than 2,000 claims for compensation or waivers have been filed throughout the state. Local officials have had to process claims because of deadlines in the law, even though they lack any guidance on uniform statewide standards.

Many claims have been brought by property owners wanting to subdivide their land to build houses, or to put commercial developments on land where current rules forbid it.

Only people who owned a tract of land before regulations affecting it were enacted can file a claim. A major dangling issue has been whether a property owner who is granted a waiver of a land-use restriction can pass along the waiver rights to new owners.

The land use planning watchdog group 1000 Friends of Oregon, which campaigned against Measure 37, argues that allowing transferable waivers could cripple planning and allow hodgepodge development across Oregon's open spaces.

Bob Stacey, executive director of the group, hailed Friday's ruling and said he was urging Gov. Ted Kulongoski and legislative leaders to convene a special session to pass legislation that deals fairly with people who have borne an unfair burden, but not at the expense of their neighbors.

Kulongoski spokeswoman Holly Armstrong said there are no plans to call a special session.

As the state population has risen, straining land use planning, property owners have tried repeatedly to ease restrictions.

Voters approved a similar property compensation measure in 2000 as a constitutional amendment. But the state Supreme Court threw it out on grounds it contained too many changes to be rolled into a single amendment.

Because of that, Oregonians in Action drafted Measure 37 as a statutory change. That made it vulnerable, however, to arguments that it violated constitutional protections.

Striking at the heart of the compensation issue in the measure, the judge said the government can't be required to pay if it wants to enforce valid land use regulations.

A government cannot be forced to choose between exercising its power...to regulate for public welfare, health or safety or paying private parties to comply with the law, James said. Because Measure 37 imposes limitations on the government's exercise of power to regulate land use in Oregon, it is unconstitutional.

Oregon Attorney General Hardy Myers has said that the law doesn't allow waiver rights to be transferred. He has raising that issue in test court cases in Crook and Jackson counties.

The Legislature grappled with waiver issues and some other legal questions but couldn't agree on any legislation to iron out the wrinkles of the law.

Local officials have had to process claims because of deadlines in the law, even though they lack any guidance because of a lack of uniform statewide standards.