Through a Glass Darkly: Measuring Loss Under ... - Land Use Law

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564 THE URBAN LAWYER VOL. 39, NO. 3 SUMMER 2007 impacts of these ballot initiatives seems unavailing. It is more likely that changes to the Measure will be discussed in legislative proceedings. 4 In the meantime, and even after further modifications to the Measure, Oregonians likely will live with at least some of its effects. Very broadly, the Oregon planning program seeks to provide a participatory, coherent, and enforceable planning policy applicable to all nonfederal lands in the state, preserve resource lands for resource use, separate rural and urban lands, and concentrate growth within urban growth boundaries. Adopted by initiative, Measure 37 is an amendment to that program. The Measure operates so that if a parcel of land has been in the hands of a family member before a particular land use regulation was enacted, the current owner may bring a monetary claim against the public body that imposed the land use regulation, provided the regulation reduces the use of the property and “has the effect of reducing the fair market value of the property.” If the public body does not have the funds for payment of the claim (which is nearly always the case), 5 that body has the option to “modify, remove, or not to apply” 6 those regulations so as to replace them with those in place at the time the current owner acquired the land. 7 Although the state land use program 8 remains, the continued existence of Measure 37 could undermine these public policy objectives by allowing land tenure to trump state policy. A system of exemptions based on length of ownership creates a checkerboard pattern of land use regulations. The extent of this checkerboard will depend on whether the state, local governments, and the public as a whole are scrupulous and diligent in requiring uniform application and compliance with the language of the Measure. 4. This author predicted efforts to rationalize the inconsistencies, vagueness, and unintended consequences of the Measure. See Edward J. Sullivan, Year Zero: The Aftermath of Measure 37, 38 URB. LAW. 237, 256–60 (2006). 5. As of March 1, 2007, the City of Prineville was the only jurisdiction within the state offering to pay public funds in lieu of granting a waiver of the land use regulations. The city offered the property owner $47,000 to prevent the construction of a residence on a property. Notwithstanding the offer, the owners subsequently filed a secondary Measure 37 claim for the same property seeking over $5 million dollars or waiver to construct a restaurant or other commercial use. See Prineville Couple Raise Ante on Measure 37 Claim, THE OREGONIAN, Dec. 1, 2006, available at http://www.oregonlive. com/news/oregonian/index.ssf/base/news/116493813427660.xml&coll7. 6. OR. REV. STAT. § 197.352(8) (2005). 7. In common parlance in Oregon, this triad is referred to as “waiver,” which is the term used in this article. 8. See generally OR. REV. STAT. § 197; Sullivan, supra note 4, at 242–44. ABA-TUL-07-0701-Sullivan.indd 564 9/18/07 10:43:37 AM
MEASURING LOSS UNDER MEASURE 37 565 Valuation is an issue of particular ambiguity—and, hence, controversy— within Measure 37. The Measure says very little on the subject (aside from creating a statutory right to “just compensation” if the fair market value of land is devalued by a land use regulation). 9 Its discussion of valuation is largely confined to the following statement found in subsection (2): Just compensation shall be equal to the reduction in the fair market value of the affected property interest resulting from enactment or enforcement of the land use regulation as of the date the owner makes written demand for compensation under this section. 10 In eminent domain law the words “just compensation” mean the price a willing buyer would pay for land from a willing seller with both parties having knowledge of the marketplace. 11 Measure 37, however, uses this eminent domain term to establish the obligation of a public body to pay for regulation, even though that public body is not seeking to acquire property for public use, as it would be under eminent domain law. 12 Indeed, the appearance of these words in the ballot title and caption may well have been a significant reason for the passage of the Measure. However, it should not be assumed that the valuation methodology utilized in eminent domain law can be transposed to Measure 37 claims. Nor should it be assumed that the valuation methodologies ought to be analogous: the correct valuation methodology for Measure 37 claims is a normative question, which calls for an in-depth analysis of the text, context, and legislative history of the measure, as well as a critical review of the economic arguments. This article is divided into six parts. Following this introduction, Section II discusses the structure of the Measure itself and current practice in administering Measure 37 claims. Section III illustrates the importance of assessing the exact quantification of the alleged loss in each Measure 37 claim, prior to any decision whether to pay or waive on behalf of the local governments. Section IV provides a review and critical analysis of proposed valuation methods. Section V assesses each of the valuation methodologies against the text, context, and legislative history of Measure 37 to determine its legal validity. Finally, the best of these valuation methods is selected and explained in terms of the Measure. 9. OR. REV. STAT. § 197.352(1) (2005). 10. Id. § 197.352(2). 11. See, e.g., State v. Lundberg, 825 P.2d 641, 644–45 (Or. 1992). 12. See, e.g., OR. REV. STAT. § 197.352(1)–(2). ABA-TUL-07-0701-Sullivan.indd 565 9/18/07 10:43:37 AM
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