Oregon’s land use laws are not government “takings”
by Sid AndersonOctober 31st, 2005 at 19:52:18
Governments most commonly use the power of eminent domain when the acquisition of real property is necessary for the completion of a public project such as a road, and the owner of the required property is unwilling to negotiate a price for its sale. In many jurisdictions the power of eminent domain is tempered with a right that just compensation be made for the appropriation.
(source)
Measure 37 and the court ruling that overturned it have been hot topics in the Oregon blogosphere. One issue that has been thoughtfully touched upon over at the blog OlsonOnline is the pro-sprawlers’ use of the term “government takings.” Pro-sprawlers falsely claim that when the Oregon legislature passed the state’s land use laws thirty years ago that in so doing the government was committing a “takings” of private property, or better known in legal circles as “eminent domain.”
As noted in the above definition, the government actually takes the property from the owner and justly compensates the owner. In such a case the owner no longer owns the land. The government owns it.
So let’s be clear and bust this myth about “takings” of private property by the state of Oregon through its land use laws. The owners still own their land. It has not been taken from them by Oregon’s government. The owners are free to keep or sell their land to whomever they please, which many Oregon land owners have done since Oregon’s land use laws were enacted.
November 1st, 2005 at 12:10 pm
Sid,
Liked your article.
I think it points to the need for land-use advocates to come up with an intellectual framework supporting land-use, to counter the “takings” and “too many government regulations” arguments of the property rights advocates. We can’t simply say “it’s too expensive.” We need a moral and intellectual argument on why land use is a Good Thing.
-tk
November 1st, 2005 at 12:29 pm
Tom-
Agreed. I think one of the frames we can bring into the debate is how Oregon is the only state in the nation that has actually had an increase in the number of family farms since 1974, and that’s a staggering 55%. It’s my belief that our land use laws have created the environment for this increase. It’s something Oregonians can be extremely proud of. Entrepreneurial farmers are looking for land to fill a growing need in the region: the desire for locally farmed produce and raised meat, along with dairy products.
Growing Oregon’s family farms! This frame reaches deep into our roots and values as Americans.
For more info on Oregon’s stunning growth in family farms read this Willamette Week article, if you already haven’t.
November 1st, 2005 at 8:19 pm
Oh yeah that’s right. The landowner still owns his property and gets to pay the taxes. He just can’t use it. No problem. Nope, that’s not a taking. Sure.
What a dope
November 1st, 2005 at 11:32 pm
Sasha-
Anyone in this state who purchased land before 1973 could turn around and sell it today for a profit. And since when did a purchase of a holding such as stock or land have a guaranteed promise of profits? I sure wish some of the stocks I owned in the 90s would have had that kind of profit guarantee on them!
You’re more than welcome to comment on this site, but I kindly request that you refrain from name calling since it does absolutely nothing to promote honest and open debate.
November 2nd, 2005 at 8:58 am
Temporary restrictions . . . so as to enable controlled growth. The perceived problem was leap frog growth . . . which made the provision of demanded urban services more expensive.
It is really that simple.
If I had my early LUBA cases posted on the internet I could point to a small number of very long opinions that isolate on such ho hum notions.
November 2nd, 2005 at 10:51 am
Ron said:
The perceived problem was leap frog growth . . . which made the provision of demanded urban services more expensive.
Is it (leap frog growth) a “perceived” problem or is it a real problem? I’m aware that there’s no money for public services available for some of the areas that are inside the UGB, but couldn’t that be considered the fault of legislation passed by politicians who have allowed developers to build and run without paying any kind of sustainable impact fees?
November 2nd, 2005 at 8:51 pm
Well, there are SDC’s(systems development charges) which are tacked onto a majority of permits for new construction, but when it comes time for updating or replacing utilities, which the SDC’s are supposed to cover financially, there is no money. Where did it go?
And by the way Sid, all property in Oregon has increased in value, not just properties affected by M37. Where I live, 2 acre developable lots are selling for a minimum of $200K. Farmland is selling for $3-5K an acre. People who would have developed a long time ago, but weren’t allowed to because of land-use restrictions, are planning on asking the going price for their land, just as the neighbors are, if M37 becomes law. I’m in a house right now, which was purchased in 1990 for $50K. We’re remodeling and landscaping and planning to put it on the market for approximately $250K. That’s a big jump in property values. Unfortunately, my mom’s farmland hasn’t increased anywhere near that much.
We’re tired of farming. I grew up with it. We’re tired of the hours it takes to maintain crops, and renting to another farmer barely pays the taxes. Why shouldn’t we be able to develop our property as my parents planned to when they bought it in 1962? I’m sure your parents home, and yours, is worth more today than the day they were purchased. And if you make some improvements, it increases the value even more. But you wouldn’t sell it for the same price you paid for it would you? That’s how a lot of landowners feel. Just my 2 cents.
November 3rd, 2005 at 10:40 am
Gene,
I understand where you’re coming from and see your point.
I’m wondering whether you could answer a question for me? While your mother’s land value has not kept up with non-farm values, it’s also true that she’s paid a lot less in taxes through the years. My question is: do you have a rough estimate of her savings and how it compares to the lost land value?
Perhaps she is actually way ahead? Or, perhaps not?
I’m not trying to imply anything, just curious about a real life case.
Regards,
-tk
November 3rd, 2005 at 11:30 am
Hi Tom,
I really don’t know what the difference would’ve been over the years. I do know she pays a little less than $2k a year for her 36 acres, but if she could’ve sold it when she wanted to, then she wouldn’t have had to pay annual taxes on it because it would’ve become someone else’s property. She would have had to pay capital gains taxes on the profit, as she still will be required to do if she can develop and sell it.
Leasing it to a farmer, she has been making between $1600 to $3500 a year. Not much.
November 3rd, 2005 at 1:15 pm
Gene,
Where is your mother’s 36 acres located?
November 3rd, 2005 at 8:26 pm
Macleay, east of Salem. Purdiest place in Oregon!
November 4th, 2005 at 5:05 am
I used the term “preceived” to denote a contemporaneous belief at that time of passage of SB100. What SB100 meant at the time is not what some people believe (perceive) it to mean today, or meant then.
Costs of public services for development within the UGB (or without)? I concluded long ago that one of the big problems with the things like water and sewage treatment is often weak controls on the public contracting. Company x y and z can have their lawyers secretly talk amongst themselves on bidding tactics, and thus thwart any goal of competitive bidding. Much of it is funded with bonds and forcing the local government to find a way to make payments on the bonds later.
The City of Portland battle on sewer costs was intimately tied to annexation. Why? Because of bonds, and the demands of credit rating (and bond cabal) pigs. It spawned expensive legal battles, here is a random hit from google on mid-county sewer portland judicial
Hussey
I offered my mom, in her new role, two pieces of advice. 1) just because a city is authorized to tax does not mean that it must tax to the limit, and 2) the best way to keep system development costs down is at the front end by controlling the costs of the public contracts.
I believe I have already lost on both points. Folks just lose their heads when they are spending someone else’s money. It becomes like Christmas. This is not to say that it is evil, it just is.
Go find the thick red book in the LUBA section of your local law library. I and the publisher disagreed on the split of costs and royalties, thus it has not been updated for a while but would be useful in any discussion of what “was” on the minds of folks early on in the process.
November 4th, 2005 at 11:51 am
Gene-
Then I can only imagine that those 36 acres, as a whole, are worth a pretty penny.
November 4th, 2005 at 11:57 am
Ron says:
Company x y and z can have their lawyers secretly talk amongst themselves on bidding tactics, and thus thwart any goal of competitive bidding.
I don’t suppose Eliot Spitzer would consider a move to Oregon…
November 4th, 2005 at 6:42 pm
Sid-
Virtually all the property in this area has become fairly high value. I can understand the intentions of keeping the 80 and 100 acre parcels intact as farmland. Most of the crops around here, with the soil and drainage, are either grass or xmas trees. But smaller parcels, such as ours, don’t really produce enough to make it feasible for farming. I realize there is a market in Portland for specialty crops, but that’s at least an hour away, and it would be pretty labor intensive. Plus, we have good water and views of Mt. Hood and Mt. Jefferson. I feel this sort of property would be better suited for developing, and that’s why I get a bit frustrated with the restrictions we currently have on this property.
November 5th, 2005 at 12:14 am
Gene-
Based on what you’ve told me about the property (the size, location and views) I think you could make quite a bit of money on selling the property as is. A real estate friend of mine just sold a 25 acre lot 45 min. outside of Portland for just over a half million. I can assure you there are buyers out there looking for a piece of land the size of yours to start a business on, or to simply enjoy as it is. Smaller sized lots, like the size of yours, are a hot commodity.
November 5th, 2005 at 11:12 am
Thaks for the info Sid. We’ll kick it around.
Right now, no one can use the property for any business other than agriculture due to it being zoned SA (special ag). It really limits what we can do. Right now, we’ve been told we cannot even build a single residence on it for our own use.
January 28th, 2006 at 9:48 pm
Sid, you are just wrong on this. It is a taking.
60% of the population has recognized it as a taking – twice.
The the courts only recognize a taking if substantially all of the economic value is removed. But at the same time they recognize property rights as a bundle of sticks. If you take one of my sticks, then you either owe me or you are a thief. Now, that’s not too hard, is it?
But see how it cuts the other way. You own a nice piece of rural property, and I put a development next door. You are screaming,” you are lowering the value of my property – an you are causing my taxes to go up because of new infrastructure.
Well, those are two of your sticks, since I haven’t taken all of your sticks, or substantially all, you are entitled to no compensation, under the law. Besides, as you point out, you still own the property and you are free to keep or sell it.
When open space is as valuable as you think it is then people will pay the price it is worth – look at Central Park. If you are not willing or unable to pay the price, then it is not worth what you claim.
This hasn’t got anything to do with land use or property rights: what you want is to control what people do. Ordinarily, when I want people to do as I wish, I have to pay them.
Your arguments are not only self-defeating under the law, they are morally and ethically bankrupt .
April 21st, 2006 at 10:31 pm
“I’m wondering whether you could answer a question for me? While your mother’s land value has not kept up with non-farm values, it’s also true that she’s paid a lot less in taxes through the years. My question is: do you have a rough estimate of her savings and how it compares to the lost land value?
Perhaps she is actually way ahead? Or, perhaps not?
I’m not trying to imply anything, just curious about a real life case.”
Something needs to be put into proper context, here: In 1962, they probably paid in excess of $1000/acre for their land. Now it is worth roughly $3000/acre. In the same time, a loaf of bread went from $.20 to $2.20; a chocolate bar went from $.05 to $.79; a gallon of gasoline went from $.25 to $2.79(+); a normal home went from $12000 to $250000. In other words, when inflation is taken into account, the land in question LOST 2/3 of its real value. Reductions in tax assessments can never make up this loss, and the family STILL will be required to pay capital gain taxes if they sell at today’s prices, further compounding their loss.
Also, the idea that a stock investor has no protections from the vagaries of the market, and that a property owner should somehow be subject to legislation that dramatically reduces the value of their land is comparing apples and oranges. No law will be passed that says that Exxon can no longer produce petroleum, or that Microsoft can no longer produce software; so why is it anathema to infer that when the government decides that a person can no longer develop their land, as they could when they purchased it, that is “taking” from them some of the profitability that they originally purchased with the land?
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