Those who are interested in eminent domain and takings law will be interested in this. The Oregon Supreme Court has reversed a lower court and upheld Measure 37, a law passed in that state by referendum that required the government to compensate property owners not only for the seizure of property but also for the reduced value of their property that might result from regulatory law. Last year, a state judge had struck down the measure in what was surely one of the strangest decisions I've ever read.
Measure 37 said the following:
(1) If a public entity enacts or enforces a new land use regulation or enforces a land use regulation enacted prior to the effective date of this amendment that restricts the use of private real property or any interest therein and has the effect of reducing the fair market value of the property, or any interest therein, then the owner of the property shall be paid just compensation.
(2) Just compensation shall be equal to the reduction in the fair market value of the affected property interest resulting from enactment or enforcement of the land use regulation as of the date the owner makes written demand for compensation under this act.
Essentially, it means this. Suppose you buy a piece of property and intend to use it for a given purpose - condo project, shopping mall, manufacturing plant, etc - that will make the property worth a certain amount to you. Then suppose the state decides to pass a law that prevents you from using the property for that purpose, or makes it cost prohibitive to do so. In such cases, the state must compensate you for the loss in property value that results from the new regulation. This was passed by popular referendum in Oregon in 2004. The Court's decision can be found here.
Update: 5 seconds after posting this, I see that Sandefur beat me to it at Positive Liberty. He also links to an article that he co-wrote about the lower court ruling in the Lewis and Clark Law Review. His article really nails the absurdity of the lower court ruling overturning Measure 37. It really was one of those rulings that you read and just shake your head, wondering how on earth a judge could write something so ridiculous with a straight face.
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I'd like to see a law that would require the inverse - if you buy some property and the state passes a law that makes the property more valuable, you should have to pay the state that much. I am thinking specifically of a multi-story condo or resort-type development on a ridgetop in the Smokies or Blue Ridge. It was built and was such an eyesore that the state prohibited more construction like it. Of course that made the original structure that much more valuable. (This is comment is roughly half tongue in cheek.)
This may be a dream for lawyers. Just how does one show a hypothetical reduction in value, and just how much of a reduction in value must be shown before the law is triggered? Regarding the latter, I'll refer to a legal maxim: the law doesn't deal in trifles. Just what constitutes a trifle?
At least those pushing Measure 37 had the foresight to direct it to only changes in laws and regulations after the property owner purchased the property. But, does that mean that the property owner's use of the property had to be approved by the relevant regulatory operations prior for to the change in law or regulation in order for him to recover under Measure 37?
Measure 37 might be laudible, but it has a number of problems.
There are lots of ways to go about establishing such a drop in value, but they will vary from case to case. The fact that one can dispute what is a fair compensation does not invalidate the law at all, any more than it invalidates the 5th amendment's takings clause requiring "just compensation". If an agreement can't be reached, a court will decide what is a fair amount using all of the normal tools to adjudicate such a dispute.
I imagine the application would be in the case of a person who bought property that was zoned for commercial use, or perhaps not zoned at all, and that later became subject to a different, more prohibitive type of zoning. I do see some problems here, since if a commercial use had not already been established, the reduction would not necessarily be easily demonstrated. If the commercial use had already been established, it would continue (at least in some states) but might be subject to certain limitations, such as prohibitions against expansion or even against some types of maintenance. It sounds like something that farmers have asked for when their land has been deemed wetlands or some other classification that has restrictions.
In September of 2004, i moderated a three hour panel discussion on Prop 37 in Portland, OR. The panel represented divergent views of property owners, developers, environmentalists, and academics. It needs be noted, that as i have previously stated in this blogsphere, that i am adamantly opposed to property rights, personal property, real estate speculation, and all manner of using the earth for profit and personal gain. However, i had been asked to put this panel discussion together by a friend whose property, and use of, represents a classic case. What made it, and makes it, valuable to me as a point, is that the use (being disputed under prop 37) did not involve profit making, but rather cooperative opportunities for celebration. Thus, while i would nearly always side with considerations of the environment over capital assets and gains, i surprised myself in supporting aspects of the proposed law to protect our use of the land in question.
Today's ruling again affords the opportunity for me to be hopeful that we might be able, through the process of negotiation and arbitration (as Ed mentioned in a comment above), to once again use the land this summer. It is always odd how the law works, to press advantage for the profiteers (as was the original motivation for Prop 37) and in turn honors ritual, celebration, and cooperative shared use.
spyder-
Are you the person behind the blog at http://arachnoanarchy.blogspot.com/ ?