Oregon Property Law Is Overturned

A judge on Friday struck down a voter-approved law that required state and local governments to compensate landowners if regulations lowered their property values.

Marion County Circuit Judge Mary James said the law approved in November 2004 violated the state and federal constitutions.

Proponent of the law say it protected property rights, but foes contend it wrecked state and local efforts to control development.

A lawsuit filed by planning advocates claimed the law violated the state constitution because it benefited people who bought their land before regulations were applied but not those who purchased property later.

James said in her ruling that the law violated a state constitutional ban on suspending laws, breached the separation of powers between government branches, intruded on legislative authority, and violated due-process protections under the U.S. Constitution.

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

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 were 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 landowners when regulations lower property values or waive the rules.

Dave Hunnicutt, 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.