States Take Action To Protect Property Rights

Oregon's Measure 37 has inspired a national property rights movement

After decades of increasingly burdensome state and local land use regulation, a majority of Oregon voters took a decisive stand in favor of property rights in November 2004 by passing Measure 37. This important ballot initiative will help provide relief to landowners whose properties have been devalued by three decades of regulation, and protect Oregon’s property owners from economic hardship that may result from future regulations.

Measure 37 requires that local governments either: (1) compensate landowners when land use restrictions reduce the value of their property (so called “regulatory takings”), or (2) waive the restrictions and reinstate the rights that property owners had at the time they bought their land.

Measure 37 represents a major advance for the national property rights movement by establishing a system that restores to private landowners the rights that had previously been taken away via regulatory action. It also provides a check on government power by ensuring that state and local governments adequately weigh the costs and benefits of public action.

Capitalizing on the momentum generated by Measure 37’s passage and the state Supreme Court ruling upholding the measure’s constitutionality in February 2006, property rights activists and legislators in several states are following Oregon’s lead and taking steps to enact their own regulatory takings reform. In some cases, proponents are advancing what have been termed “Kelo-Plus” measures: regulatory takings reform combined with curbs on the use of eminent domain in response to the U.S. Supreme Court’s 2005 Kelo vs. New London decision. For example:

  • Arizona: The citizen-led Homeowners Protection Effort (HOPE) is gathering petitions to place a property rights protection initiative on the November 2006 ballot. The initiative would stop local governments from using eminent domain to take private property for private development in order to generate more tax revenue. It would also give property owners an opportunity to seek compensation when the government adopts land use regulations that decrease their property’s fair market value.
  • California: Property rights activists are gathering signatures to place the “Protect Our Homes Act” on the state’s November 2006 ballot. This initiative would amend the California Constitution to tighten the rules on the use of eminent domain and ensure just compensation to landowners whose properties have been devalued through government regulatory actions.
  • Georgia: Senate Resolution 1040 (S.R. 1040) passed the Senate Judiciary Committee on March 3, 2006. S.R. 1040 would create a constitutional amendment authorizing the General Assembly to pass a bill in 2007 requiring local governments to pay compensation to property owners for the imposition of “unreasonably burdensome governmental actions,” including land use and zoning regulations.
  • Idaho: Activists in Idaho collected over 75,000 signatures by May 1 to place the Idaho Private Property Rights Protection Initiative on the November 2006 ballot. Similar to Measure 37, the initiative would provide just compensation when a government entity reduces one’s home or property values through zoning and other land use regulations. It would also limit governments’ ability to take private property and give it to another private party or person.
  • Missouri: The supporters of two competing citizen initiatives aimed at curbing eminent domain abuse face a May 9 deadline for collecting the signatures necessary to get these initiatives placed on the November ballot. One of the initiatives, a constitutional amendment proposed by the group Missourians in Charge, would restrict the use of eminent domain while also providing compensation to landowners whose property values decline because of government regulations enacted after October 7, 2006.
  • Montana: Citizens are currently collecting signatures to place Initiative 154 (I-154) on the November ballot. I-154 would require state and local governments to compensate property owners for diminished value resulting from a regulation enacted after the acquisition of their property, unless the government repeals the regulation or waives its application to the affected property. I-154 would also prohibit the government condemnation of private property if it intends to transfer an interest in the condemned property to a different private party.
  • South Carolina: On March 15, by an overwhelming vote, the state House approved H.B. 4503, which tightens state statutes governing the exercise of the eminent domain power and includes a provision that requires local governments to compensate landowners if new regulations decrease private property values. The regulatory takings provision was stripped from a companion bill, H.B. 4502, which would place a constitutional amendment on the ballot in November.
  • Washington: In February, the Washington Farm Bureau filed final language with the Secretary of State’s Office for Initiative 933 (the “Property Fairness Act”) that would require state and local government to compensate landowners when regulations “damage the use or value” of private property. While it bears some similarity to Measure 37, Initiative 933 would go further by requiring agencies and local governments to detail any “actual harm or public nuisance” that proposed regulations are designed to stop or prevent, the extent to which they affect private property owners, and whether the goals of the proposed regulations could be achieved by less restrictive means, such as voluntary programs with willing property owners. Under the initiative, property owners would be entitled to waivers or compensation for restrictions imposed any time after January 1, 2006. Initiative 933 supporters must gather the signatures of roughly 235,000 registered voters by July 7 to qualify for the November 2006 ballot.
  • Wisconsin: In March, the Wisconsin Assembly passed AB 675 by a vote of 56-40, creating a process for a property owner to seek compensation from a municipality when the value of his property is reduced due to the imposition of land use regulations. The bill, introduced by Rep. Sheryl Albers (R-Reedsburg), is modeled after Oregon’s Measure 37. It has been sent to the Senate and referred to the Senate Committee on Housing and Financial Institutions.

This upsurge of activity in a diverse group of states across the country suggests that the national property rights movement has been galvanized by the Kelo decision and Measure 37. Landowners in many communities have been restricted in their ability to use their land in the ways that they had intended when they purchased their property, dramatically reducing their property’s value and imposing an economic hardship on them. And Justice Sandra Day O’Connor’s stinging dissent in the Kelo case perfectly captured the feelings – and fears – of most homeowners when she wrote, “Any property may now be taken for the benefit of another private party.”

As a result, property owners and citizens are increasingly aware of the need to protect their property rights from the expanding reach of government. Measure 37 represents the boldest response yet to the use of regulation to provide public benefits at private expense, and the fact that a majority of voters in a state with a long tradition of (and public support for) growth management supported Oregon’s Measure 37 suggests that urban planning may not be sustainable unless it incorporates property rights into the regulatory framework. For those in the urban planning profession, voters have started to send the clear message that protecting property rights will be increasingly critical to successful planning efforts in the United States.

Leonard Gilroy is a certified planner and policy analyst at the Reason Foundation. He is the author of the new study Statewide Regulatory Takings Reform: Exporting Oregon’s Measure 37 to Other States, which can be found online at [PDF, 596 KB]. An archive of Gilroy’s research and commentary is here, and Reason Foundation’s growth and land use research are available here.