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Measure 49 – The Sublime and the Routine

With the recession, the Gulf Oil Spill and overseas wars, and battle raging over the future of urban growth in the Metro area, Oregonians may be forgiven for not bringing to mind a previous crisis and the resolution of that crisis chosen by voters after much debate.  In 2004, voters passed Measure 37 to provide “just compensation” for property owners who claimed their balance sheets were reduced by state or local land use regulations.  The remedy under the Measure was either payment for that “lost value” or (as was overwhelmingly the case) a waiver of those regulations that had been enacted since the current owner acquired the property.  Over 6,850 Measure 37 claims, affecting over 750,000 acres of land were filed. 

The appeal to fairness turned sour when the Measure was applied, so voters approved Measure 49 in 2007 to “fix” Measure 37.  With the exception of vested rights, all Measure 37 claims were required to be re-filed and were only eligible for more limited relief.

As to the administration of Measure 49, nearly all of the 4,660 claims have been processed.  The legislature later extended relief to other potential claimants, so another few hundred more claims are expected to be determined in the near future.  Of those claims already processed, about 80% have been granted the more limited relief provided under the Measure (one to three potential lots – 7,297 dwellings in all), affecting a little over one-third as much land as Measure 37, or 239,000 acres.  These were mostly “express lane” claims where, once eligibility was determined, relief was available.  Only one of the claims for up to ten dwelling lots was successful, requiring a showing of reduction in value backed up by a professional appraiser.  There are also scattered cases at the local level and in the court system dealing with vested rights claims, where a successful claimant commenced construction under a Measure 37 waiver before Measure 49 became effective.  Finally, there are a few cases in which landowners or neighbors are challenging the determinations of the State as to Measure 49 eligibility.  All in all, this process is moving along efficiently.

On the judicial front, Federal District Judge Owen Panner decided in 2008 that Measure 37 waivers that had been granted were “contracts” that could not be abrogated by the more limited relief granted by Measure 49 and that the Measure itself violated the “separation of powers” doctrine, as the legislature had interfered with those contracts.   Additionally, the Oregon Supreme Court recently ruled that the Estate of Dorothy English was entitled to the judgment of over $1.15 million (plus an equal amount in attorney fees) for a Measure 37 that had been reduced to a court judgment before Measure 49 passed.  As to the federal litigation, the Ninth Circuit Court of Appeals ruled in an unpublished opinion on July 20, 2010 that Measure 37 waivers were not contracts subject to constitutional protection against subsequently enacted laws and that Measure 49 did not violate the separation of powers doctrine.  It is likely the plaintiffs will seek certiorari from the United States Supreme Court, though such review is rarely granted. 

As also reported, Multnomah County has paid its debts to the English estate leaving only Multnomah County residents to ruminate on what public projects the $1.15 million paid to the English attorneys might have otherwise purchased.

It appears that Measure 49 has worked in the way it was intended, that it is constitutional and that the State of Oregon is past the Measure 37 crisis.  Time will tell if this was solution that has remedied the perceived unfairness of overly-restrictive prohibitions on the development of farmland or if advocates have turned their attention away to other more pressing matters and this issue will simmer over again.  

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We regularly update clients about changes in real estate law and on industry trends. This includes briefing clients on legislative proposals in the federal tax, housing and other legal areas affecting their businesses. Staying current enables you to anticipate and prevent legal problems as well as capitalize on new developments.
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