Document Type

Article

Disciplines

Construction Law | Property Law and Real Estate

Abstract

In 2004, Oregonians decisively approved Ballot Measure 37. The measure answered the calls of critics of contemporary takings jurisprudence by requiring either compensation for losses caused by land use restrictions imposed after acquisition of the property or waivers of the restrictions. Three years later, voters acted to repeal most of Measure 37 by an even greater margin. Together the birth, brief life, and rapid demise of Measure 37 comprise an unusual natural experiment in property law. The results of this experiment go to the heart of debates about regulatory takings in property law and policy. First, the Oregon experience resulted in a sea change in owners' understandings of property rights. The 2004 vote reflected the popular understanding of land use restrictions as invasions of property rights. Faced with effective repeal of those restrictions, as reflected in passionate testimony before the Oregon legislature, Oregonians came to see the regulations as in fact the source of the property rights upon which they depended. In effect Measure 37 brought the background government and community support on which property rights depend into the foreground of owners' consciousness. Second, government responses to Measure 37 challenged arguments that compensation will dispel the fiscal illusion under which governments operate and result in more efficient regulation. Rather than weigh costs and benefits, in all but one of thousands of cases, state and local governments waived regulatory restrictions rather than compensate. These decisions were made without analysis of the benefits of the regulations waived, and despite predictably negative economic results. Finally, the thousands of claims and research catalyzed by these claims complicated questions of the compensation to which owners are entitled as a matter of fairness. In many cases, owners demanded compensation although their properties had already multiplied many times in value despite the challenged restrictions, and their claims of loss elided the effect of the restrictions themselves in generating the value they claimed they could reap if the restrictions were lifted. While limited, therefore, the Oregon experiment sheds the light of lived experience on abstract debates about takings law. Together, its results challenge common understandings of the role rights, efficiency, and fairness concerns play in arguments about compensation for land use restrictions, and provide provocative evidence that they weigh against compensation in many cases. In 2004, Oregonians decisively approved Ballot Measure 37. The measure answered the calls of critics of contemporary takings jurisprudence by requiring either compensation for losses caused by land use restrictions imposed after acquisition of the property or waivers of the restrictions. Three years later, voters acted to repeal most of Measure 37 by an even greater margin. Together the birth, brief life, and rapid demise of Measure 37 comprise an unusual natural experiment in property law. The results of this experiment go to the heart of debates about regulatory takings in property law and policy. First, the Oregon experience resulted in a sea change in owners' understandings of property rights. The 2004 vote reflected the popular understanding of land use restrictions as invasions of property rights. Faced with effective repeal of those restrictions, as reflected in passionate testimony before the Oregon legislature, Oregonians came to see the regulations as in fact the source of the property rights upon which they depended. In effect Measure 37 brought the background government and community support on which property rights depend into the foreground of owners' consciousness. Second, government responses to Measure 37 challenged arguments that compensation will dispel the fiscal illusion under which governments operate and result in more efficient regulation. Rather than weigh costs and benefits, in all but one of thousands of cases, state and local governments waived regulatory restrictions rather than compensate. These decisions were made without analysis of the benefits of the regulations waived, and despite predictably negative economic results. Finally, the thousands of claims and research catalyzed by these claims complicated questions of the compensation to which owners are entitled as a matter of fairness. In many cases, owners demanded compensation although their properties had already multiplied many times in value despite the challenged restrictions, and their claims of loss elided the effect of the restrictions themselves in generating the value they claimed they could reap if the restrictions were lifted. While limited, therefore, the Oregon experiment sheds the light of lived experience on abstract debates about takings law. Together, its results challenge common understandings of the role rights, efficiency, and fairness concerns play in arguments about compensation for land use restrictions, and provide provocative evidence that they weigh against compensation in many cases.

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