The Unexpected Face of Measure 37

Russell Sadler

Measure 37 finally has a face -- a most unexpected and human face -- and it isn’t dour Dorothy English of the TV commercials. Former Oregon House Speaker Lynn Lundquist, now a lobbyist for the Oregon Business Association, was a vocal opponent of Measure 37. Like many experienced lawmakers he could not figure out where the money to pay for it would come from.

Last week Lundquist announced he has filed a claim for compensation under Measure 37. He owns about 300 acres of land zoned for farm use in Crook County. He grows mint and grain. Lundquist wants to subdivide part of the 300 acres into 33 nine-acre lots which he estimates will be worth about $4 million.

Under Measure 37 as its proponents interpret it, the county must either pay Lundquist the difference between the land’s market value as agricultural land and the $4 million it may be worth subdivided or waive the zoning and let the subdivision proceed.

“I thought this was an opportunity I probably should not forego,” Lundquist told The Oregonian.

It’s hard not to be sympathetic. It’s difficult to make a living farming 300 acres. Since the passage of Oregon’s landmark land use laws in 1973, the solution to Lundquist’s dilemma has been selling his 300 acres to some neighbor who will continue to farm it. This long-standing policy prevents the development of uses incompatible with agriculture which could jeopardize even more agricultural land.

The problem for farmers like Lundquist is the value of land used for agriculture is far less than the same land subdivided. Measure 37 represents a new attitude of a generation of Oregonians and many new arrivals who do not share the attitudes toward growth and sprawl and the often incompatible effects it has on neighboring properties that Oregonians held in the late 1960s and early 1970s. This new generation is unwilling to wait for urban growth to reach their land. They want their money now.

This raises the question that has been studiously ignored since the 1970s. Why is Lundquist’s land worth his estimate of nearly $4 million?

The reason for the higher value of subdivided land is the public investment in infrastructure that makes subdivided land salable -- publicly financed investments in streets and roads make the land accessible. The taxpayers provide schools, police and fire protection. As rural subdivisions become more dense, taxpayers provide water and sewers, parks and playgrounds. In rural eastern Oregon, the public provides electricity. The public provides or promises basic services consumers demand.

In recent years, property tax limitations reduced the amount of this public development subsidy from general property taxes. But the public costs have not gone away. They are increasingly financed with fees and systems development charges on new construction. Without this public investment, agricultural land is worth just what it can bring in from the crops it grows.

Measure 37’s proponents argue the government gets increased property taxes from the increased value of the land. That is misleading. Property taxes don’t even pay the construction and operating costs of that public investment. The public never gets a return on its money the way private investors get a return on their money. The public investment is considered a “public good” for the benefit of all. In exchange, the public claims the power to “reasonably regulate” land use.

Measure 37 radically moves the goal posts for “just compensation” to a standard much lower than the U.S. Supreme Court requires for “taking” private property, but provides no money to pay the claims.

Despite Measure 37’s approval by 60 percent of the voters, I suspect Oregonians will not tolerate cities and counties waiving zoning and permitting incompatible uses in their neighborhoods very long. That will bring up the inevitable question over how to pay compensation claims. The first choice will certainly be a tax on the difference in value between the agricultural value of Lundquist’s 300 acres and the $4 million he claims he can make subdividing it. If the public no longer has the power to “reasonably regulate” land use, it deserves a return on the investment that makes subdivided land so much more lucrative to the private owner.

That is the way former Gov. Tom McCall wanted to pay compensation claims in 1973. But Oregon’s development and real estate lobbies were obstinately opposed and the compensation issue reached a stalemate and festered -- until now.

Lawmakers should forget efforts to “fix” Measure 37. They should let the courts decide whether it is so badly written that it is “unconstitutionally vague.” Lawmakers should spend the interim between legislative session studying ways to raise the money to pay off these compensation claims if Measure 37 passes constitutional muster. The issue cannot be swept under the rug for another 30 years.

  • Becky (unverified)
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    Clearly Lundquist is either a for-sale politician or he is intentionally trying to create trouble for Measure 37.

    I think the county ought to call his bluff and waive the zoning restrictions. On the off chance he has access to the money to actually develop the property himself, the county would actually begin to recoup some of its investment in infrastructure through a big jump in property tax collections. And maybe cities and counties in real "danger" from these types of Measure 37 claims should do what Sherwood did and impose fairly high system development charges. People are willing to pay them, and consequently the local government soon is flush with cash.

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    Beacky, read further. Property taxes do NOT completely cover investment in infrastructure -- it barely pays the operating costs.

    Local governemts do NOTmake money on growth -- growth costs, it doesn't pay. You and I provide the subsidy. It's less than it was because development fees shift some of that cost to new construction -- and that has other consequences.

  • Steve (unverified)
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    Again, if people would read things before they condemn them, M37 text:

    <hr/>

    (3) Subsection (1) of this act shall not apply to land use regulations: (E) Enacted prior to the date of acquisition of the property by the owner or a family member of the owner who owned the subject property prior to acquisition or inheritance by the owner, whichever occurred first.

    <hr/>

    My sense would be that if Mr Lundquist (who has an axe to grind it sounds) bought this land zoned as farm land, M37 doesn't apply. The intent of M37 was to serve as a moratorium on zoning changes by government after a person buys land.

    Since this thing has to go thru the courts, before we launch into the "end of Oregon" lamentations, why not see what it actually does.

  • Chris (unverified)
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    I response to Becky:

    I wouldn't underestimate Lundquist's ability to find financing to develop his land.

    Also, many of the parcels in Oregon have standing timber on them, which when harvested, goes a long way toward paying the development costs.

    Additionally, some developers have already come up with strategies for contracting with land owners to finance the development costs in turn for taking a share of the profits on the back end. It really isn't that difficult to come up with such a plan.

    I know this because I am an executive in the forest products industry and also well connected with some developers in Lane County. Yes, as a progressive, I am a rarity in my working circles.

  • Steve (unverified)
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    "Local governemts do NOTmake money on growth -- growth costs, it doesn't pay. You and I provide the subsidy. "

    Then why does PDC/Metro (amongst other government entitities) subidize so many growth projects (Pearl, S. Waterfront, Portland Conv Ctr, downtown redevelopment)? - Because they think it will be a revenue (viz, tax) generator for government.

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    Steve writes <<< Then why does PDC/Metro (amongst other government entitities) subidize so many growth projects...<<<

    PDC doesn't subsidize, taxpayers do. PDC is just the conduit, while taking a cut for its own operations.

    SDC's are a very inexact --and inadequate-- mechanism for capturing the costs of new infrastructure required for development. The decision, for example, to charge Parks SDCs in Portland on residential --and not commercial-- construction, has more to do with poltics then anything. As does where and on what projects those SDC dollars get spent.

    The example of "It's a Beautiful Pizza" on SE Belmont is telling...a huge transportation SDC for moving Carl's existing pizza business across the street to a former laundry he remodels. Zero impact on the transportation system --he doesn't even have a parking lot-- while the money he pays goes to help pay for streets, sidewalks, and the tram in South Waterfront.

    Similarly, when we tell the residents of SW Portland we annexed that they have to pay for their own streets and sidewalks, but we use General Fund revenues to help pay for new development, in new neighborhoods we create --like South Waterfront-- it leaves a bitter aftertaste.

    Frank Dufay

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    I don't see any reason to think Lundquist is anything but what he purports to be: a person who opposed Measure 37 because on balance he thought it would be bad for the state but who has filed a claim because he has some land he can make money on and thinks may be appropriate for development. The guy's a businessman and that's a businessman's choice. At this point he's just keeping his options open by filing a claim.

  • Todd Birch (unverified)
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    The public investment is considered a “public good” for the benefit of all. In exchange, the public claims the power to “reasonably regulate” land use.

    Please. Who, besides 1000 Fanatics and their doctrinaire ilk, is arguing that there's anything "reasonable" about Oregon's land use system? The whole point of Measure 37's staggering victory was that an overwhelming majority of Oregonians consider the convoluted top-down centralized statewide planning morass extremely unreasonable. Like Lundquist, voters thought Measure 37 “was an opportunity they probably should not forego.”

    Intransigent supporters of the system are certifiably schizophrenic: Prior to the election they spent millions trying to convince people M37 would destroy Oregon’s “iconic...pioneering” land-use structure. (Most voters were like, "Dude, you promise?") Now they can’t stop yammering their new mantra that “Measure 37 wasn’t about destroying statewide land-use planning!"

    How's this for a compromise: Make Measure 37 apply only to state laws and regulations, and in the process repeal all LCDC’s authoritarian planning dictates and uproot the whole unwieldy, unjust Gosplan in its entirety so that local jurisdictions can go back to deciding their own land use questions just like every other place in America. If local control is good enough for the rest of the country, it ought to be good enough for Oregon.

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    Todd says: "If local control is good enough for the rest of the country, it ought to be good enough for Oregon."

    Trouble is, it WASN'T (and still isn't) good enough for Oregon. I spent 27 years on the East Coast watching how development goes without it--poorly. It happened in Northern Virginia in the 70s/80s, and Richmond in the 90s. You end up with mile after mile of indistinctness--sprawling front-loaded subdivisions on hundreds of traffic-choking culdesacs, broken up by strip malls and office parks that shred any sense of place. Towns literally disappear in both presence and meaning--how can you tell when you go from one to the other, if they all look exactly the same and continue to radiate out ever further into the hinterlands?

    I reject the idea that M37 was a referendum on Oregon's land-use pioneering; its proponents did their level best to shade that fact. What M37 threatens to undo is the sense of shared development responsibility, which boils down to consideration for your fellows. M37 could have been expressed quite pithily in one simple bumpersticker:

    "Fuck You, Neighbor."

  • Rorovitz (unverified)
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    Todd,

    What you get so way wrong is that people didn't vote for M.37 because they don't like Oregon's land use planning system. They voted for a ballot title that talked about compensation when government action causes people to loose value on their property. And dude, there's polling that shows the disconnect.

    Funny thing about it is that at the same time there are all kinds of dudes who argue on blueOregon that our land use planning system drives up the value of our land. Huh.

    If Oregonians in Action thought people hated our land use planning in a 60/40 split they'd have put that ballot measure out there. They didn't. They believed they could drive a wedge with the compensation angle.

    Dude, that sucks.

  • Sid Anderson (unverified)
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    If local control is good enough for the rest of the country, it ought to be good enough for Oregon.

    Oh, but how little you know. States across the nation are now beginning to implement state wide land use laws because of uncontrolled sprawl, rural subdivisions and their cost to the system.

    The state of Washington introduced laws in the mid-90s that are very similar to Oregon's. In fact, they used Oregon's laws as a road map. Just drive around Clark County, and you'll see what happened before the state passed stronger land use laws. It's a mess. I know. My mom runs a small farm and she's in the middle of 40 1 acre McMansions out in "rural" Clark County, some of which have inhabitants who complain about her roosters crowing at 4 in the morning.

    If people really want to believe that M37 isn't going to cost Oregon taxpayers anything, they're living on another planet. Do we really want our state to look like Clark County, Washington? And do we want to have to shoulder the costs of such a mess? Furthermore, do we want to be in the position Washington state is in where they're wishing they would have done something sooner?

  • Todd Birch (unverified)
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    “Fuck You, Neighbor.”

    Hey, that is pithy. All we have to do is get some printed up that say "Voters" instead of "Neighbor" and they'll perfectly express sentiments on your side, too.

    And Rorovits, I think you're right. OIA was probably just as surprised by how many people hate the land use system now as the Take a Closer Look Committee was.

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    Pithy or not, there is a point... M37 was a bait and switch scam to say the least. To suggest the campaign was run as a broader movement against the entire land use law system ignores what the campaign focused on. I'm quite sure a small minority of M37 supporters were truly voting against the entire UGB system, however, I'm steadfastly positive that M37 would have gone down quicker than a lead balloon if OIA, et. al. had run it that way. I give them credit for the savvy use of words, but let's not overstate any kind of mandate here...

  • Todd Birch (unverified)
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    Anderson&Mooney,

    I'm sure you're already aware that property rights activists to our north will probably float an initiative similar to Measure 37 at some point. It’ll be neat to see what happens with that. I think the big question will be whether Washington “progressives” are any more politically astute than the ones in Oregon on this issue. If they are (and I don’t see how they could be any less), they might deduce that it’s better to give a little now, open their minds a bit, and address some of the basic complaints about fairness before voters decide to take a giant steaming dump on their entire beloved system, like they did here back in November.

  • Becky (unverified)
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    "The guy's a businessman and that's a businessman's choice."

    Isn't that kind of anything-to-make-money attitude just what really gets progressives mad at business? And now we're using it to excuse Lundquist? What about personal principles carrying over into the conduct of business? I'm sorry, I just think the guy is two-faced or up to something. Nothing else makes rational sense.

    I also think it's time that we realized that irrational application of land use laws is what led to the passage of Measure 37. Too many people lost too much that they should not have lost because people in government who love lording it over others went too far all over Oregon. Measure 37 did not pass so large landowners could develop "McMansions" on farmland. It passed because ordinary people got fed up with being told they couldn't build a house on their property or add on to their house or change their own landscaping to suit themselves. People buy property so they can have a place of their own, and they don't like having some committee looking over their shoulder with a scowl shaking a finger at them as they try to do normal things to their homes that people have done for centuries.

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    Is it possible that Lundquist's action is part of the odd situation of Crook County suing itself?

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    Becky writes:

    Measure 37 did not pass so large landowners could develop "McMansions" on farmland. It passed because ordinary people got fed up with being told they couldn't build a house on their property or add on to their house or change their own landscaping to suit themselves.

    This is absolutely true. It's also true that when voters passed measure 5, they were overwhelmingly thinking about small landowners who saw their retirement going up in bureaucratic smoke.

    But back to "who benefits". In the case of measure 5 the large timerland holders, and in the case of measure 37 the developers, wind up being the big beneficiaries.

    Becky, Todd, Steve and others make a crucial point here. While Russell and his allies are correct on the facts, proponents of sustainable development systematically ignore the little guys with a "tough shit" attitude. Then the exploiters come in and use sympathetic rhetoric to effect massive and destructive shifts in public policy.

    Standing on principle is only effective if you have a plan that's smart enough to keep the inevitable backlash from occurring.

  • Todd Birch (unverified)
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    Standing on principle is only effective if you have a plan that's smart enough to keep the inevitable backlash from occurring.

    Couldn't agree more. Contrary to my new bumpersticker, I believe it's in fact of paramount importance now for landowners who wish to exercise their newly restored property rights to willingly and voluntarily mitigate for potentially negative spillovers from development to the greatest degree possible. Otherwise, the unethical collectivist political "exploiters” - the one's who despise an individual’s right to own and use property and have been standing in the way of reform to Oregon’s land use system for decades - will again be able to effectively employ their "sympathetic rhetoric" to pit citizens against one another and convince intellectually pliable politicians, philosophically corrupt judges and freeloading bureaucrats to retreat from bedrock American constitutional principles.

  • Sid Anderson (unverified)
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    Todd,

    Please refer me to the part of the US or Oregon Constitutions that gives property owners unfettered guaranteed rights to do whatever they please with their land.

    If there is such a clause in the Constitution, then why didn't private property rights activists challenge Oregon's land use laws in court?

  • Sid Anderson (unverified)
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    Todd,

    Oh, and as far as our neighbors to the north introducing an M37 type proposal, I doubt it will pass. There's hardly any decent land left up there. It's just a patchwork of rural subdivisions, sprawling bedroom communities and congested freeway exits, not to mention a mishmash of public water lines that criss cross the region and cost tax payers millions of dollars each year.

  • Todd Birch (unverified)
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    Sid Anderson,

    Yes, it is true, the United States Supreme Court has interpreted that partial takings of property through regulations by government is constitutionally permissible, as long as some “economically viable use” is retained. To that end, the outcome of Measure 37 (and lets not forget Measure 7) is a rather clear gauge for determining how Oregon voters tend to feel about the job courts and agencies are doing with respect to honoring the rights of individuals and calculating what constitutes “viable.” I'd also refer you to my imputation of "philosophically corrupt judges" and whatever meaning you might draw from that for further clarification of my opinion on the current American legal environment with regard to private property rights protection at this point in our history.

    In any event, pretty much every other constitutional guarantee against abuse of government power seems to be under assault nowadays, so why should this area be any different?

    Now, I do not think the U.S. and Oregon constitutions provide people "unfettered guaranteed rights to do whatever they please with their land" so much as prohibit governments from vacuuming up rights, property and property value without compensating the rightful owners. I also acknowledge that if the state exists for no other reason, it exists to punish unprovoked aggressions and transgressions against the rights of others by criminal or negligent actors. And in keeping with and respecting that legitimate government function, Measure 37 provides no mechanism for relief from regs "restricting or prohibiting activities commonly and historically recognized as public nuisances under common law...[or enacted] for the protection of public health and safety, such as fire and building codes, health and sanitation regulations, solid or hazardous waste regulations, and pollution control regulations."

    But while you're reading to the references below, give some thought to the concept of "just compensation.” I submit that the only fair way for democratically determining whether the "taking" of property is necessary to achieve legitimate "public use" is if the public (taxpayers and voters) is willing to dig into the treasury and compensate the property owner's loss. It's basically in keeping with that "checks and balances" stuff Randy Leonard was talking about. You can go on about how much wonderful value all us proles get from government "investment," which was partly the point of the above column, I guess. As far as I'm concerned that's the kind of thinking that dammed up every river in America, so you're not going to get far with me on that: I think most infrastructure ought to be privately financed. If it were our civilization would certainly be a lot more environmentally friendly than it is now, particularly in the West, after a century of incomprehensible levels of mindless government subsidization and shameless state capitalism.</a

    United States Constitution, Amendment V: No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

    United States Constitution, Amendment IX: The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people

    Oregon Constitution, Section 18: Private property or services taken for public use. Private property shall not be taken for public use, nor the particular services of any man be demanded, without just compensation; nor except in the case of the state, without such compensation first assessed and tendered; provided, that the use of all roads, ways and waterways necessary to promote the transportation of the raw products of mine or farm or forest or water for beneficial use or drainage is necessary to the development and welfare of the state and is declared a public use.

  • Jud (unverified)
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    To that end, the outcome of Measure 37 (and lets not forget Measure 7) is a rather clear gauge for determining how Oregon voters tend to feel about the job courts and agencies are doing with respect to honoring the rights of individuals and calculating what constitutes “viable.”

    Todd, it might just as easily be a reflection on the fact that individual rights often butt up against the strictures of a Constitution that sometimes puts the good of the nation ahead of individual interests. There's almost always a point where an individual's right to do as they please is restricted, and though some citizens might succeed in venting their "outrage" in symblic form, it doesn't mean the system is broken or corrupt. It means those citizens want more than they can have.

    Your Fifth Amendment argument could note this: "[The language of the Fifth Amendment] requires the payment of compensation whenever the government acquires private property for a public purpose...[t]he Constitution contains no comparable reference to regulations that prohibit a property owner from making certain uses of her private property."

    The Court is generally lenient toward land-use regulations because "[t]reating them all as per se takings would transform government regulation into a luxury few governments could afford." I'm guessing that this tolerance rubs some greedy people the wrong way; thus, Measure 37.

    Given this tolerance toward regulatory takings, is it your view that the Republican-dominated Supreme Court is full of "philosophically corrupt judges?"

  • Jud (unverified)
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    I'll also note this tidbit of Supreme Court info in the context of the "can't sue if regulations became before ownership" discussion:

    "A purchaser or successive title holder who acquires property after a state's regulations restricting the use of the property have gone into effect is not necessarily barred from claiming that the regulations effect a taking of the property under the takings clause of the Federal Constitution's Fifth Amendment, for (1) some enactments are unreasonable and do not become less so through passage of time or title, (2) a rule barring such a regulatory-taking claim would (a) absolve the state of its obligation to defend any action restricting land use, no matter how extreme or unreasonable, (b) work a critical alteration to the nature of property, and (c) be illogical and unfair, and (3) a regulation that otherwise would be unconstitutional in the absence of compensation is not transformed into a background principle of state law by mere virtue of the passage of title..."

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    Todd Birch writes:

    "I'm sure you're already aware that property rights activists to our north will probably float an initiative similar to Measure 37 at some point. It’ll be neat to see what happens with that."

    I agree that it will be interesting, but this won't be the first time Washington voters take a crack at it. They already defeated it 58-42 a few years back.

    Also, Arizona- which tends to be more politically conservative than Oregon- also defeated the measure 60-40 in 1994 (a Republican year).

    I think this speaks to the importance of ballot titles, among other things. Washington state and Oregon might not be 100% sympatico politically, but it's hard to see a twenty point shift explained just simply on the merits of the issue.

    Also, in a much earlier post, Todd stated that the No campaign used the threat of 37 being an attack on our land use planning system. This isn't really accurate.

    The main messages (which were pretty similiar to both Az & Wash campaigns) were that 'takings' would 1) mean red tape 2) higher taxes 3) more layers of government.

    Here's the link to the the No on 37 website. Land use planning isn't even mentioned on the home page, and was never in any TV spot that I'm aware of.

    Becky, you were involved in the first 'takings' campaign if I'm not mistaken. I'd be interested to hear from you where the opponents went wrong in their campaign (putting aside your own beliefs on the issue).

  • Mike (unverified)
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    Most ownership in land within Oregon was originally transfered by patent from the federal or state government to the private landowner. The only rights that did not transfer were listed on that patent, and in most cases all rights transfered. This would include development rights, water rights, mineral rights, harvest rights, etc. ANY restrictions to those original transfered rights should be considered a form of taking, if not approved by the voters of this state. Hage vs USA proves that these rights are enforceable, if you the stomach to fight.

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