Oregon Limits Overturned

"A judge on Friday overturned a voter-passed property compensation law as unconstitutional.

[ . . . .]

The law, passed as Measure 37 on the November 2004 ballot, requires that state and local governments either compensate land owners when regulations lower property values or waive the rules.

James said the statute violates equal protection provisions of the Oregon Constitution and a state constitutional ban on suspending laws.

She also ruled it breaches the separation of powers between government branches, 'intrudes on' legislative authority and violates due process protections under the U.S. Constitution.

Foes of the law argued that it violates the 'equal privileges and immunities' provisions of the state constitution because it gives benefits to people who buy their land before regulations were applied but not to those who purchase property later." [Charles E. Beggs, "Voter-Passed Measure 37 Law is Overturned," KATU News, October 14, 2005]

This is interesting. It seems to me, in general, that it should be possible to constrain government from making regulations that diminish property values, and that telling government it can only make such regulations if it compensates for the harm it causes is a pretty nice way of constraining government. On the other hand, there are cases, in theory, when regulations regarding the use of property might honestly be aimed at preventing harm to the person or property of others. In these cases, even if property value is decreased, government should not be required to compensate the property owner.

But consider the idea that the law which was overturned "gives benefits to people who buy their land before regulations were applied but not to those who purchase property later." Doesn't this make you think of Alice in Wonderland?

When regulations lead to decreased property values, those who buy post-regulation are buying at the lower prices. There surely is no need to compensate buyers post-regulation. Buyers post-regulation know that the range of uses for the property they purchase has been specifically limited or constrained by the government's regulations.

But this is not at all the situation faced by the property owner who has new land use regulations imposed. Under the new regulations, if property value is diminished, then the property owner at the time the regulations are imposed is clearly a loser. It simply is not fair to expect the owner at the time the regulation is imposed to bear the cost of actions taken in the name of the entire community. The proposed compensation requirement would remedy this unfairness or injustice. By requiring government to compensate you will be requiring people in community in general to pay for the actions government takes in the name of the entire community.