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

Congratulations to Bethany Berger upon the publication of her recent article What Owners Want and Governments Do: Evidence from the Oregon Experiment, 78 Fordham Law Review 1281-1330 (Dec. 2009). What a treat to read something informative, insightful and persuasive concerning the well-traveled topic of when and how owners should be compensated for losses allegedly caused by land use regulations. Bethany’s novel approach relies on Oregon’s recent adoption and then substantial repeal of a measure that required government either to pay compensation or waive enforcement of land use regulations in many cases in which compensation would not be compelled under traditional constitutional analysis. In her hands, Oregon’s experience proves deeply illuminating.
She shows first that in all cases but one Oregon governments chose to waive enforcement of proposed land use measures rather than pay compensation. (The lone exception involved construction of a conspicuous house on a ridge line that was deeply offensive to the neighborhood). She thus calls into question the conventional argument that governments will pay for cost justified land use measures. As she sees it, government will already lose tax revenue whenever a regulation reduces a parcel’s assessed value, and thus it will be the rare case when the benefits from a proposed regulation will be sufficient to warrant additional cash compensation. Second, she vividly portrays the shock experienced by Oregonians who suffered losses when their neighbors were allowed to proceed with land use plans in the absence of regulation. It turns out that Oregonians felt that property rights in their land included the orderliness of neighborhoods protected by land use planning. Finally, Bethany describes the ways in which Oregon’s experience with the strict compensation regime brought to life certain aspects of land use law normally excluded from familiar debates over property rights. Those claiming a broad property right to compensation tend to overlook the way that the value of unregulated land is increased by an overall regulatory scheme restricting other parcels. Also seldom mentioned is the way that adjacent government amenities heighten the value of private property thus calling into question whether market value compensation is fair, especially if this involves a substantial profit above what the owner paid for the original parcel. No one reading Bethany’s account of Oregon’s experience will again feel the same way about simplistic calls for a strict compensation regime, especially when those calls come from the outspoken woman leading the charge for compensation, whom Bethany colorfully labels a “poster grandma” and even “an infamous gravelly-voiced poster widow.”
Just as is the case for Bethany’s historical treatment of Pierson v. Post, this piece is destined to become must reading for property scholars and a staple in American casebooks. Bravo!