09/10/01

Now the property-compensation measure moves to the Oregon Supreme Court, which will determine whether a state considered a pioneer in land-use regulation makes a dramatic switch to the broadest property-rights law in the nation.

Justices will hear arguments today on Measure 7's constitutionality. If the court upholds the measure, state and local governments expect to be hit with thousands of compensation claims totaling hundreds of millions of dollars. That may lead some to stop enforcing regulations, clearing the way for development on previously protected land.

Proponents say the measure would simply make Oregon's vaunted land-use system fairer. And if the high court prevents the measure from taking effect, they say they'll be back with new ballot measures or legislative proposals.

The Measure 7 fight is especially significant because it's taking place in Oregon, said John Echeverria, director of Georgetown University Law Center's Environmental Policy Project in Washington, D.C. He opposes Measure 7.

"Measure 7 would destroy any zoning or land-use program anywhere in the country, but Oregon has always been a leader in land-use planning and Oregonians have always taken pride in that leader ship," Echeverria said. "The thought that Measure 7 could destroy all that progress seems remarkable."

But supporters say the measure is a response to growing -- and unaddressed -- frustration with Oregon's land-use system.

If the measure takes effect, the system would continue, but "the costs will be shared by the public as a whole rather than by a few landowners," said David Hunnicutt of Oregonians In Action, the property rights group that led the campaign for Measure 7.

Measure 7 amends the Oregon Constitution to require state and local governments to compensate landowners for regulations that restrict their property's use and reduce its value. The measure hasn't taken effect because of legal challenges.

A Marion County judge ruled in February that the measure violates two requirements for constitutional amendments: Such measures must include all of the language they would change, and they cannot make multiple changes that are substantive and not closely related. The Supreme Court isn't expected to rule on his decision before January.

Extent of impact unknown Since voters approved Measure 7 in November, no one has defined just how extensive its impact would be on the statewide land-use system, which the Legislature approved in 1973 in an attempt to focus development inside urban growth boundaries and protect surrounding farm and forest land.

State lawyers charged with assessing the measure's effects spent three months producing a 110-page report that seemed to raise as many questions as it answered. The 2001 Legislature then tried to craft a compromise to send to voters but gave up after five months. And because no claims have been allowed yet, the courts have not been able to provide any guidance.

One contentious issue has arisen already: The possibility that local governments would abandon regulations rather than risk compensation claims.

Within six weeks of the measure's passage, more than 20 cities had adopted ordinances allowing them to waive zoning and land-use regulations that might result in compensation claims. The land-use watchdog group 1000 Friends of Oregon sued to stop the ordinances.

The ordinances could be used "to authorize everything from cell towers in residential zones to development on coastal sand dunes," the group said in a statement.

The issue reflects the depth of officials' concern about the cost of compensation.

State officials estimated the measure could cost state and local governments more than $5 billion a year. Even with a narrow interpretation, legislators figured it would cost hundreds of millions of dollars.

"As narrowly as you want to interpret it, I still think we're talking about thousands of claims," said Rep. Max Williams, R-Tigard, who led the Legislature's unsuccessful Measure 7 negotiations.

Governments, squeezed by revenue forecasts that are falling with the economy, could be faced with cutting services or raising taxes, two issues as contentious as property rights.

"There are not going to be great choices," said Robert Liberty, executive director of 1000 Friends of Oregon.

The uncertainty about money is heightened by questions about the measure's scope. Attorney General Hardy Myers said in February that property owners might have to be compensated for laws that go far beyond standard land-use topics such as restrictions on home building. For instance: the Bottle Bill and laws governing hazardous waste, landlord-tenant relations and rent control.

A different philosophy All sides agree that Oregon's land-use system wouldn't be the same if Measure 7 takes effect.

The system "is based on the notion that sound land-use planning increases property values for everyone in the community by preserving the character of the community and ensuring that development goes forward in an orderly fashion," Echeverria said.

"Measure 7 has a completely different philosophical orientation. It treats every regulation as an unfair assault on private property values and doesn't acknowledge the public benefits of land-use planning, or it ignores them."

But Hunnicutt said the measure restores fairness to the system by making it work the way it was intended.

When the system was created, lawmakers discussed compensating property owners harmed by land-use regulations, but compensation was never instituted, he said. The result is a system that unfairly puts its costs on the shoulders of property owners, he said.

"The flaw in the way we've carried out the program for the last 28 years is they haven't carried out that missing part of the system, and that's what led to the increasing frustration among property owners," Hunnicutt said.

Williams, the Tigard legislator, doesn't expect a quick resolution regardless of how the court rules.

If the justices strike down the measure, he sees a decade of legal and political warfare, including dueling ballot measures. If they uphold it, he sees more grappling by governments and legislators, including a probable special session.

"I worry about what we're going to do if the court deems it constitutional," Williams said, "and I also worry about what we're going to do if the court deems it unconstitutional." You can reach Dave Hogan at 503-221-8531 or by e-mail at davehogan@news.oregonian.com.