What Owners Want and Governments Do - Evidence from the Oregon Experiment

Abstract:     
In 2004, Oregonians approved ballot Measure 37 by 61% to 39%. The measure answered the calls of critics of contemporary takings jurisprudence by requiring either compensation for losses caused by land use restrictions imposed after acquisition of the property or waivers of the restrictions. Three years later, voters acted to repeal most of Measure 37 by an even greater margin. Together the birth, brief life, and rapid demise of Measure 37 comprise an unusual natural experiment in property law. The results of this experiment go to the heart of debates about regulatory takings in property law and policy.

First, the Oregon experience resulted in a sea change in owners’ understandings of property rights. The 2004 vote reflected the popular understanding of land use restrictions as invasions of property rights. Faced with effective repeal of those restrictions, as reflected in passionate testimony before the Oregon legislature, Oregonians came to see the regulations as in fact an important source of property rights. In effect Measure 37 brought the background government and community support on which property rights depend into the foreground of owners’ consciousness. Second, government responses to Measure 37 challenged arguments that compensation will dispel the fiscal illusion under which governments operate and result in more efficient regulation. Rather than weigh costs and benefits, in all but one of thousands of cases, the government waived the regulations rather than compensate. These decisions were made without analysis of the benefits of the regulations waived, and despite predictably negative results. Finally, the thousands of claims and research catalyzed by these claims complicated questions of the compensation to which owners are justly entitled.

While limited, therefore, the Oregon experiment provided valuable grounded evidence for the continuing debate about takings law and the ways that property mediates the relationships between individuals, communities, and the state.

Number of Pages in PDF File: 50

Keywords: Land use, regulatory takings, popular initiatives, Oregon

JEL Classification: K11, K32, D61, D63

Accepted Paper Series