I-933, debriefed

Was this year’s initiative a bad idea or a badly written law?

Steve Morasch
Schwabe, Williamson & Wyatt

Initiative 933, otherwise known as the "Property Fairness Act," was rejected by Washington voters on election night 2006.

The final vote tally raises some interesting questions about the fairness of our land use system. Does rejection of this controversial initiative show that people don’t want government to compensate property owners for regulations that devalue private property? Or, was the initiative rejected because of the way it was written? Perhaps it was simply the fact that opponents of the initiative massively outspent proponents. Whatever the reason, some good lessons can be learned from our experience with I-933.

This initiative, had it passed, would have ushered in what is commonly referred to as the "pay or waive" policy, where government must pay for regulations that devalue property value or grant waivers of the regulations to individual property owners. Although I-933 was ultimately rejected at the polls, the fact that I-933 made it onto the ballot and received more than 40 percent of the vote seems to demonstrate that a substantial number of Washington voters feel that Washington’s land use system is unfair to property owners.

I-933 would have required state agencies and local governments to analyze the impact of proposed regulations on property values before adopting new regulations. However, the heart of the initiative was its requirement that an agency must pay compensation if it decided to enforce a regulation that would restrict "the use of private property to obtain benefit to the public, the cost of which in all fairness and justice should be borne by the public as a whole." The initiative gave some examples, including regulations adopted after Jan. 1, 1996, that restrict the use of property, as well as regulations that require property to be left in its natural state, such as habitat ordinances, regardless of when they were adopted.

I-933 would have exempted regulations that apply equally to all property within an agency’s jurisdiction, and the initiative gave some examples of exempted ordinances, including health and safety regulations such as building codes. Opponents of I-933 seemed to gain traction when they questioned just how this exemption would work. For instance, it was unclear whether habitat protection ordinances and other regulatory protection of critical areas would have been exempt. It was also unclear whether the initiative provided agencies any independent authority to grant waivers.

Many of the restrictions that cities and counties impose on private property are required by the Growth Management Act. Cities and counties that plan under GMA are required to draw urban growth boundaries and to designate and conserve agricultural and forest lands, as well as critical areas such as habitat and wetland areas. Often, these GMA mandated restrictions are the ones that property owners feel are the most unfair, but cities and counties have no choice but to comply with GMA. Since GMA does not allow waivers, I-933 would have created uncertainty about whether cities and counties could waive a GMA-mandated regulation.

In their campaign which emphasized that the initiative raised "too many questions," opponents of I-933 capitalized on the uncertainties inherent in the initiative. This begs the question whether a more tightly written initiative might stand a better chance at the polls.

Although I-933 failed to pass, it was successful in raising awareness of property fairness issues. The level of support that I-933 did receive seems to show that a great many property owners feel disenfranchised by the current land use system in Washington. Clearly, some changes need to be made. If the regulators and elected officials at both the state and local levels, but primarily at the state level, heed I-933’s clarion call, perhaps there won’t be a need to put another property fairness initiative on the ballot.

Steve Morasch is an attorney with Schwabe, Williamson & Wyatt. He can be reached at 360-905-1433 or smorasch@schwabe.com.