Mark Kaufman

On Tuesday, January 10, the Oregon Supreme Court heard oral arguments in a case that could reshape the state's land use laws—and landscape—for decades to come.

The Salem courtroom became the latest battlefield between land use activists and staunch private property rights advocates over the legality of 2004's Measure 37 (M37), which was designed to render statewide land use planning obsolete.

Oregon's land use laws date back to the 1970s, when then-Governor Tom McCall headed up a coalition to draft a plan that would dictate what types of land can be developed, and in what ways. It also established urban-growth boundaries for nearly every city in the state, creating areas outside the urban centers that could not be developed for urban use. Instead, these areas were kept as environmental sanctuaries or small farmlands.

McCall's plan is widely accepted—even by its detractors—as having helped create the Oregon that exists today. The strict planning kept the state from becoming a sea of urban sprawl clogged with strip malls, Wal-Marts, and tract homes.

However, Measure 37, which passed with around 60 percent of the vote in November 2004, was designed to de-claw the zoning laws. If a property owner who purchased the land before the regulations went into effect can show that the restrictions have caused a loss in property value, the government is required to either compensate the owner for the loss, or waive the restrictions on development. For example, if a property owner wants to build a gas station in land zoned solely for small farm use (or, as Jackson County attorney Michael Jewett suggested before the court, a hog farm next to a retirement home), the government has to pay the owner for the loss in revenue or allow the gas station to be built. Since no funds have been allocated to compensate property owners, most claims are resolved by waivers.

After the measure passed, land use advocates, including 1,000 Friends of Oregon, immediately sought to have it found unconstitutional. In October, Marion County Circuit Court Judge Mary James ruled that M37 was unconstitutional. The basis for her ruling: By forcing a government to pay citizens to obey valid laws, the measure illegally trampled on the government's right to enforce its own laws. Further, James ruled, Measure 37 sets up two closed classes of landowners—those who owned land before regulations were put into place and those who purchased land afterward—and treats them differently, violating the equal privileges and immunities clause of the state constitution. Lastly, James found that the law illegally asked governments to suspend valid laws.

The defendants—individuals as well as M37 authors Oregonians in Action—appealed, and the case went directly to the state Supreme Court.

Oral arguments in state Supreme Court cases are more hearing than trial; justices can ask the attorneys questions about their legal briefs. One of the primary focuses of questioning hinged on whether M37 gives governments actual alternatives in enforcement—that is, "pay or waive." No claims have yet been paid off, because governments don't have the money. Going beyond that, Justice Robert Durham asked if the defendants believed that M37 would still be valid even without the "pay" option.

"Could we have valid land use laws that can be waived if someone objects?" Durham asked defendant attorney Janet Metcalf.

"Yes," she replied.

"Like, 'We have these land use laws, but we're just kidding about them'?" Durham shot back.

Much of the rest of the questioning centered on whether M37 impermissibly treats land owners different based on when they purchased their land. Land use attorney Todd Baran argued that it was illegal to pass laws that affect each class differently.

Whether the justices buy that line of reasoning will be unknown until they issue their decision. So far, the case has been expedited, and observers expect the court to deliver an opinion on an accelerated timeline—possibly by this spring.

No matter what the outcome, though, McCall's brand of land use planning will likely not survive into 2006. If the law is overturned, groups like 1,000 Friends of Oregon will still have to deal with the overwhelming perception that the current land use laws are unfair. The group's legislative affairs director, Elon Hasson, has already filed several ballot measures that would offer moderate reforms to the planning laws—including a plan that would require the government to pay double the just compensation if it condemned private property in order to transfer it to another private party.