Oregon’s Measure 37 holds real-world lessons for Washington

Last November, Oregon voters overwhelmingly passed Measure 37, a law requiring the state and counties either to pay landowners for lost property value when new zoning restrictions are imposed, or allow owners to operate under the rules in place when they bought the property. Supporters and opponents said Measure 37 would radically change the landscape of Oregon. The reality, however, is turning out to be less revolutionary than either side expected.
Opponents said passage of Measure 37 would result in “anarchy,” “chaos” and a “nightmare” as rural Oregon was rapidly paved over with new development. They said the new law would bankrupt the state and counties by requiring them to pay out millions in lost-value claims. It is true that on paper the size of claims made so far seems enormous. Through June 30, Measure 37 claims against the state amount to nearly $1.3 billion, far more than the state can pay.

In practice though, Measure 37 has not cost Oregon a dime. Rather than pay compensation, the state and counties have simply waived any land-use restrictions imposed since the owner purchased the property. Most claims have been filed by holders of small, family-owned plots, and most have not owned the land long enough claim significant changes in land use rules. As a result, the actual number of acres affected by Measure 37 is fairly small. Many claims involve less than 100 acres, and some are only five to ten acres. Even when recently-imposed land-use regulations are waived, public safety and construction restrictions remain in place, resulting in little change in the character of rural areas.

Measure 37 opponents predicted environmental regulations would be weakened, communities threatened and public safety ignored. A University of Washington professor warned that “farmlands would have greater market value as subdivisions…flood plains are attractive locations for car dealerships and truck stops.”

However, the state says, “The measure does not apply to commonly and historically recognized public nuisances, public health and safety regulations, regulations required to comply with federal law” and other commonsense zoning restrictions. Here are a few real-world examples of how Measure 37 is playing out. In Hood River County a landowner filed a claim for more than $11 million. Yet, rather than pay the claim, the state simply waived newer zoning restrictions and re-instated the rules that applied when the current owner bought the land in 1977. The 1977 rules allow building single-family homes on quarter-acre lots, but only as long as they “are appropriate for the continuation of the existing commercial agricultural enterprise in the area.” For this reason it is unlikely the owner would receive building permits for a subdivision-size development. In Linn County a landowner sought a waiver of farmland zoning rules so Habitat for Humanity could build low income housing on his land. Under Measure 37 the zoning waiver was approved, but building permits were denied for public safety reasons. The land is on a flood plain.

A Columbia County landowner has filed a seemingly massive compensation claim of $87 million against the state. Rather than negotiate over what is probably an inflated appraisal, Oregon waived the land-use restrictions imposed since the owner brought the property. Even so, the owner will still have to comply with pre-existing laws requiring him to “conserve forestlands for forest uses” and strictly limit any construction to what is “necessary and accessory” for forest use.

What will happen when governments look to change zoning laws in the future? Oregon, like Washington, has a solid foundation of zoning already, making it unlikely that there will be major changes in the future. Some changes will occur, however, and it is unclear how Measure 37 will affect those changes.

While not sparking the kind of radical land-use changes supporters had hoped for, neither is Measure 37 turning out to be the “nightmare” opponents had predicted. The news from Oregon is of more than passing interest to Washington residents. There is already an effort afoot to pass a land-compensation initiative here, and voters may see a homegrown version of Measure 37 on the ballot as early as next year.

Contact Washington Policy Center at 206-937-9691 or on the web at www.washingtonpolicy.org.

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