The Oregonian
www.oregonlive.com

A state official says it boils down to whether the property-compensation measure is retroactive

Tuesday, November 14, 2000

By R. Gregory Nokes

The future of Oregon's urban growth boundaries hinges on whether a property-compensation measure is retroactive, Richard Benner, director of the state Department of Land Conservation and Development, said Monday.

He said the courts are likely to decide whether the voter-approved constitutional amendment, known as Measure 7, applies to regulations imposed since a current owner bought the property or could apply to rules imposed under previous owners as well.

"If it is retroactive, I think it is the virtual end of urban growth boundaries," Benner said.

He also said there is no doubt the measure will entitle "many property owners" to compensation for the loss of value resulting from some state and local land-use laws and other regulations, if those regulations remain in force.

On Monday, the Land Conservation and Development Com mission, the department's policy-making body, postponed action on new boundary expansion rules until March at the earliest.

The department had been working on the rules for more than a year and the commission had tentatively scheduled final approval for Dec. 15. But Benner urged the delay, saying it would be inappropriate to act until "the air clears on what Measure 7 is all about." The measure takes effect Dec. 7.

The proposed boundary rules also would be aimed at requiring larger Oregon cities to encourage projects inside the boundary that mix commercial and retail development and, in some cases, boost population densities.

Benner said the state agency doesn't want to adopt any new rules "that might be interpreted to affect the value of property."

Backers of the measure have said it should apply only to regulations imposed after the current property owner acquired the property.

But Benner said "a lot of lawyers read the actual language of the measure and come to different conclusions." The measure says compensation is due if the regulation "was adopted, first enforced or applied after the current owner of the property became the owner."

Benner said some attorneys say the current owners could be entitled to compensation if a regulation is enforced for the first time -- even if imposed under a previous owner.

He said if the measure is found retroactive, "everyone outside the boundary" might have a claim to compensation if they can make the case that the boundary has had the effect of reducing their property value because they aren't allowed to develop it.

The same question surrounds the state's beach protection laws, which ban property owners from building on the dry sand portion of their land and guarantee public access to beaches.

The measure says an owner with a valid claim "shall be paid just compensation equal to the reduction in the fair market value of the property." It lists a number of exceptions for which owners aren't entitled to compensation, including federal regulations, and regulations restricting nude dancing, taverns and casinos.

All of Oregon's 240 cities have urban growth boundaries, which are intended to separate urban development from rural, for the purpose of protecting the state's farmland and preventing urban sprawl. The Portland area has a single boundary -- administered by Metro -- surrounding 24 cities and the urban portions of three counties, Multnomah, Clackamas and Washington.

Gov. John Kitzhaber has asked Attorney General Hardy Myers for an opinion on the measure's impact, including whether it could be retroactive. Kitzhaber has said the measure could be tied up in the courts for several years, although no one had stepped forward to announce a lawsuit yet. The state would be required to defend a legal challenge.

Benner said property owners with questions about a claim should contact the appropriate state agency or local government. But he said they may have little information to offer for the time being. "There are so many unanswered questions," he said.

Meanwhile, Metro hasn't made a decision on whether to go forward, or suspend, work on its proposed buffers and other stream-protection rules.

Rod Park, chairman of the Metro Council's growth management committee, said the rules are needed to help meet the region's obligations to protect threatened salmon and steelhead under the federal Endangered Species Act.

On the other hand, he said, "we don't want to force local jurisdictions to pay for something they may not have dollars to do." Park added, however, "Anything I say is speculation until a court decides what we do."