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Monday, February 27, 2006

 

No land regulation without compensation

Oregon court strikes blow for property owners.

A constitutional battle continues to develop in the national legal arena. Disputants for "no land regualtion without compensation" celebrate the contest's latest headline.

On November 2004, voters in Oregon passed legislation known as Measure 37, requiring that citizens be paid when land use regulations diminish their property values. The legislation targets a governmental practice known as "regulatory taking," a term that refers to governments using and/or appropiating private property for public use. Including instances when governments impose rules that diminish the use and value of land without making the property owner whole. Last tuesday, February 21st, Oregon's Supreme Court upheld the measure as constitutional and stroke a powerfull blow to the hopes of smart-growth advocates, planners and new urbanists in the north-western state.

According to an article published by the Denver Post, in the days after the Court's ruling came down, "the Court's upholding [of Measure 37] lifts the burden of land use regulations off the shoulders of property owners and puts it where it belongs -on the regulators, politicians and special interests who impose their aesthetic values on others. They'll still be able to regulate -as long as taxpayers share those values enough to pay for them." Forcing governments to compensate owners when the value of their land is affected by any zoning laws or any other regulations aimed to manage the way growth occurs in a city, makes the implementation of Smart-growth policies more complicated and costly.

The article poses an illustrative question:
"What is protecting the Preble's meadow jumping mouse worth to the American people? It's impossible to say at the moment, because this costs are largely hidden, foisted on land owners living in mouse habitat. But if the federal government (read:taxpayers) had to pay when the Endangered Species Act impacts land values, we would quickly find out what value average Americans place on these plants and animals."

Practices such as regulatory taking and emminent domain appropiations face serious challenges in courts across the nation under the argument that they violate the Fifth Ammendment's "takings clause." This clause requires proper compensation to be paid when the government uses or appropiates property. Measure 37's upholding is a groundbreaking veredict in solving the debate. At the very least, Oregon just became a much more expensive playground for planners and smartgrowth advocates.

Notes:
Here is the link for the Measure 37 ballot's website:
http://www.sos.state.or.us/elections/nov22004/guide/meas/m37_bt.html
Here is the "No on 37" site:
http://www.takeacloserlookoregon.com/
I did not find an electronic copy or link to the Denver Post's article. If you want to read other articles on the subject, here is a place to start:
www.google.com
Fifth Ammendment of the United States Constitution (Full text):
"No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a grand jury, except in cases arising in the land or naval forces, or in the militia, when in actual service in time of war or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation."

Comments:
Daniel,

Technically a regulatory taking is probably not the same thing as eminent domain. Eminent domain is the power to physically take private property if the property is then put to "public use," and if "just compensation" is paid to the owner of the private property.

A regulatory taking, in theory, is similar. It is simply the idea that government wants to regulate the use to which property is put. The property in not physically taken. The idea of a regulatory taking is that under at least some circumstances a regulation is equivalent to taking property.

Do you see ways in which economic analysis would argue either for or against granting government the power of eminent domain?

I've followed takings, eminent domain, and the recent Kelo opinion quite a bit over at Eminent Domain Institute, and I find the use of language in this area frequently entertaining, as well as often quite incorrect. Here is an example from your post:

". . . . because this costs are largely hidden, foisted on land owners living in mouse habitat."

It seems quite odd to me to write about private property owners living in mouse habitat. I think the accurate description would be that there are private property owners of mouse habitat.
 
Although Eminent domain and regulatory taking are not the same thing, the argument of an existing violation of the fifth ammendment is applicable to both terms.
I also see how the wording of "land owners living in mouse habitat" may not be the most accurate/appropiate.

Despite the "expressions" chosen by me and the writers of the text quoted, I think the underlying question concerns how much power to give government when it comes to telling property owners how to use (or not use) their premises.

In the example about the "mouse habitat," the government presumably creates a benefit for the community by protecting an endangered species, but imposes a cost on the owners of said habitat by restricting their ability to use their property in any matter the deem suitable. The decision to protect the mice is not taken based on the benefits and costs faced by the property owners; this could be one reason why economic analysis would argue against those types of measures. One important question to resolve in such analysis would be wether governments or individual (self-interested benefit maximizer) owners are better suited to find the most efficient use of property. I personally do not think governments seek to maximize "use," I rather think they want to maximize what I will call 'political utility.'
As a last comment I will say that the choice of words you present for the mouse habitat example presumes that property owners are more important than mice.... and that is an entirely different discussion.
 
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