What if the Measure 37 fix doesn’t pass?
by George SeldesMay 13th, 2007 at 21:55:00
Out enjoying the beautiful day today, I was meditating on what would happen should the Oregon 37 fix fail this November. I heard Sen. George speak recently and I think he’s not sure whether it will pass or fall, because he’s boasting that it is sure to fail quite loudly and often. I got the impression he doesn’t know any more than anyone else.
Which, of course, includes me.
So I was giving some thought to what to do if the thin slice of corporadoes who know full well what Measure 37 is really going to do can flummox a majority of the voters one more time and persuade them to keep Measure 37 exactly as is (meaning no transferability, no rational valuation process, no ability to get loans for Measure 37 development). In other words, the question is whether the big timber companies and developers who can self-finance their projects can get the majority of folks to refuse to fix a law that, as passed, will mainly cause only the kind of development that even diehard-pro-Measure-37 folks say should not occur.
So, if we’re faced with a wave of Oregonians with Measure 37 claims declaring a kind of war on the rest of us and demanding that they be exempted from land use controls that weren’t in place on the day they took title, then I think we need to think very, very hard about how to honor that whole concept—as in, returning any Measure 37 claimant to the position they were in when they bought for EVERYTHING, not just for land use restrictions they don’t like.
First, and most important, we start by recognizing that most of the value of land is created by other people–not by the owners, but by the people who live nearby. That’s why an acre in downtown Portland is worth a lot more than an acre in Podunk–because there are a lot of people in downtown PDX. Most of the value of that acre has nothing to do with how it can be used, but in how it is located. This locational value is all, therefore, created by other people, not the landowner.
So why should any landowner who wants the land use laws that were in place on the day of purchase get any more for the land or its development rights than the land was worth on the day of purchase?
Thus, to allow the state to get the revenue needed to purchase critical lands threatened with development, here’s what we should do: At sale of any property that has been the subject of a Measure 37 claim, tax all the locational value received by the landowner (or subsequent owner). After all, he or she doesn’t create this value–all those “other people” that the Measure 37 claimants have told to go to hell created it. Why should a Measure 37 claimant get to keep it?
That is, the fact that land purchased for $200/acre can now be sold for $60,000 an acre is entirely the result of the value given to the land by the people who don’t own it. Prime forest land has a value from the timber it can produce, and then an entirely different value under houses, which is entirely socially created value.
So, Sen. George, if you want to demand that society can not do anything to reduce the value of land, then fine, let’s also not allow the landowner to reap the benefit of all the value created BY all those other people you claimed were trying to take your land.
Thus, for example, any landowner who acquired land 50 years ago for $X/acre and who presses a Measure 37 claim would, at sale, be taxed so that the net proceeds to the landowner are again $X/acre (adjusted for inflation). The tax goes to the state so it can afford to condemn and buy outright the most valuable land before putting it back in private hands under development restrictions. That’s what Oregonians In Action has always said should happen: the government should buy the land if it wants to limit the use. OK, now we have a way to get the money to make that possible.
(Measure 37 backers will claim that this is discriminatory because it singles these property owners out for special treatment. Yes, that’s exactly what Measure 37 does, provide special rights for some people.)
Second, where we don’t buy the land outright to impose development restrictions, then we revise the tax system to ensure that, whenever any land is developed against its present zoning, the owners of that land will have to pay, in perpetuity, a tax multiplier to account for the additional costs of serving the higher zoned uses. For example, if you build a subdivision in prime farmland then you will pay, on top of the taxes you paid under the zoning that was in place before your Measure 37 claim, an additional multiple to help local governments pay for the additional costs of meeting the additional service demands created by the new use (fire, schools, police, wider roads, etc.)
Measure 37 claimants loudly insist that “other people” have no right to take their property with their land use laws—if so, then neither does any Measure 37 claimant or subsequent owner have the right to impose additional burdens on neighbors with inappropriate development. If someone wants to build ranchettes on the best farmland in the world, prepare to pay for that choice on your property tax bill forever, because you aren’t going to be allowed to shift them onto your neighbors.
Third, any property developed after a Measure 37 claim is prohibited from imposing the burdens of loss of water on its neighbors, so wherever the existing water users have to drill new or deeper wells near a Measure 37 claimant, the claimant has to pay for that, and if the groudwater won’t support the additional takers, then the wells serving the Measure 37 claiming property must be capped–fair’s fair, after all, and if one party is going to insist on being freed from any of the burdens of living in society (like land use laws) then the neighbors already there have every right not to be burdened either.
Ultimately, we’re going to find out this November if the Oregonians who passed Measure 37 are willing to take “Yes” for an answer, because that’s what the fix does–it says YES to everything in Measure 37 (and much more, creating new transferability rights, resolving the issue of widows who weren’t on the title, etc). It more than solves the problem that Measure 37 backers claimed they wanted solved.
If they won’t take Yes for an answer–if they say “Hell no, we already passed this twice, stick it in your ear while we pass it again,” then it will be plain that Measure 37 is purely about profit for corporate landholders and big developers, and that it actually has very little to do with helping any of the people that the fix bill would help immediately.
If that’s the case—if the Measure 37 fix fails—then we shouldn’t be the least bit shy about taking the excess profitability out of those claims. You want to go back in time to before land use restrictions? Fine–but you’re not taking the 2007 property values back with you. You can have the purchase price and the the general rate of inflation for every year since, but you can NOT have the benefits of the land values created by the very land use system your claim is helping to destroy.
May 14th, 2007 at 9:59 am
sounds like someone’s been reading henry george!
May 14th, 2007 at 2:16 pm
Who are the lily-livered conservative paid-for-by-developers sending out the expensive postcards from PO Box 1619, Salem? There is nothing on the card saying any of the mealy-mouthed things like “Citizens for Screwing Anybody Liberal.”
The card attacks Chris Edwards on his vote to return the rewritten Measure 37 to voters. So they prefer to have urban waste spreading everywhere? At least they could say who they are.
May 16th, 2007 at 9:04 pm
Yes, I find Henry George to be quite sensible, how about you? What do you think of his stuff?
May 17th, 2007 at 8:40 am
i enjoy henry george, he was a brilliant writer, and an insightful philosopher. his ideas for taxing privilege (in the form of rent) were way ahead of their time, and eventually snuck into policy indirectly through various forms of income and cap gains taxes, monetary policy, etc. the single-tax on land was a pretty cool, pretty radical liberal idea (that actually originated with thomas paine; agrarian reform i think) that, however sensible, will probably never be implemented in any significant way.
May 26th, 2007 at 11:39 am
Ultimately, we’re going to find out this November if the Oregonians who passed Measure 37 are willing to take “Yes†for an answer, because that’s what the fix does–it says YES to everything in Measure 37 (and much more, creating new transferability rights, resolving the issue of widows who weren’t on the title, etc). It more than solves the problem that Measure 37 backers claimed they wanted solved.
You make good points in your column. You are also correct that HB 3540 gives Measure 37 claimants everything they want (to judge by the arguments submitted in the Voters Pamphlet in support of the measure). HB 3540 calls the bluff on the likes of Senator George. Measure 37 is an attack on the principles of zoning by people who are hard-core property rights advocates. Compare what they advocated in the Voters Pamphlet with what the claims consist of. HB 3540 closely resembles the spirit of the arguments in favor of Measure 37; so closely, that the likes of Berger, Boquist, and Winters have had to say in print that what they had hoped would be in the bill is not, when in plain fact, the opposite is the case. Politically, you have an entire party staking their legislative careers on what people enacted in 2004, rather than staking their careers on what people wanted when they elected them to office. The coattails they think they are riding may end up being political cement galoshes.
Analyze the Measure with plausible scenarios. You can come up with numberless scenarios that expose 37 as undermining zoning, as well as land use planning and comprehensive planning. Look at actual claims. It is fascinating to read the rebuttal from supporters – you cannot judge the effect of 37 from the claims; you have to wait until the work is finished.