Policy Study

Statewide Regulatory Takings Reform

Exporting Oregon's Measure 37 to Other States

Executive Summary

Since the widespread adoption of municipal zoning in the United States in the early twentieth century, there has been an expansion in the character and scope of state and local land controls and an increasing recognition that land use regulation significantly infringes on private property rights.

The nature of land use regulation has evolved beyond the common law, nuisance-based tradition that characterized the first century after the nation’s founding. This nuisance-based approach was primarily focused on preventing harm to the property rights of others and giving property owners wide latitude in determining the best use of their land.

By contrast, contemporary land use regulation often uses public policy to mandate the private provision of amenities that benefit the community-at-large. As the regulatory scheme influencing local land use has grown more prescriptive and restrictive, there has been an increasing curtailment of private property rights. Landowners in many communities nationwide 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.

The expanding reach of state and local land use regulation has led to a burgeoning property rights movement and increased calls for: (1) statutory or constitutional measures to reduce the infringement on private property rights resulting from government regulation (so called “regulatory takings”), and (2) compensation for landowners when their property rights have effectively been regulated away.

The experience of Oregon points to a new way of establishing clear boundaries for regulation and balancing the rights of private property owners with government’s right to enact policies advancing the public interest. After decades of burdensome state and local land use regulation, a majority of Oregon voters took a decisive stand in favor of property rights in November 2004 and passed Measure 37, a ballot initiative designed to 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, 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 the rights of private landowners that had previously been taken away via regulatory action. It can be seen as simply having revealed the hitherto hidden costs of the state’s heavy-handed approach to land use regulation and redirecting these costs in a more equitable and just manner that respects the American tradition of strong private property rights. Measure 37 also provides a check on government power by ensuring that state and local governments adequately weigh the costs and benefits of public action. In fact, Oregon’s experience suggests that property rights are critical to successful planning efforts in the United States and that urban planning may not be sustainable unless it incorporates property rights into the regulatory framework.

The national property rights movement has been galvanized in recent years by Measure 37’s passage, as well as widespread popular disenchantment with the abuse of eminent domain highlighted by the U.S. Supreme Court’s Kelo vs. New London decision. Public recognition of the need to protect the constitutional rights of private property owners has never been higher.

Citizens, activists, and elected officials across the nation can look to Measure 37 as a model for regulatory reform as they continue the push to protect private property rights from the expanding reach of government and prevent landowners from being forced to bear the hidden costs associated with government regulation.