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OSU economists eye Measure 37 claim methods
Two economists in the College of Agriculture are critical of system
Aleks Cherednichenko
Issue date: 2/23/07 Section: News
A study published this week by Oregon State University Extension Service examined inconsistent evaluation methods for Measure 37 claims across the state of Oregon.
Ballot Measure 37 was passed in 2004 to enable the owner of private real property to receive compensation when a land use regulation restricts the use of the owner's property and reduces its face value.
In response to a Measure 37 claim, the state, county, city or metropolitan government can either compensate the owner or change or not apply land use regulations to the private property, as stated by the State of Oregon's Web site.
The authors of the study are William Jaeger and Andrew Plantinga, economists in OSU's College of Agricultural Sciences.
"We thought that the evaluating methods for Measure 37 claims were addressed in the wrong way," Jaeger said.
The authors examined two approaches used for calculating reductions in property value, the before-and-after and single exemption methods.
"The before-and-after approach is the most reasonable out of the two," Jaeger said. "You look at the face value of a private property before a land use regulation was enacted, and you look at the value after."
The Portland Metro regional government has denied all Measure 37 claims, while using the before-and-after approach. Sonny Conder, Portland Metro's urban land economist, gave an example of the before-and-after method.
"Let's say an owner purchased an acre of property five years ago for $250,000, for real estate development," Conder said. "A few years later the local jurisdiction rezones the area, reducing the number of real estate units the developer can build on the property. The reduction of units reduces the value of the property to $150,000, that is a valid reduction of value to a property."
"Wildish Land Company in Eugene has made a Measure 37 claim, seeking compensation, but applying the before-and-after approach actually shows that the property's value increased by 1,400 percent," Jaeger said.
Ballot Measure 37 was passed in 2004 to enable the owner of private real property to receive compensation when a land use regulation restricts the use of the owner's property and reduces its face value.
In response to a Measure 37 claim, the state, county, city or metropolitan government can either compensate the owner or change or not apply land use regulations to the private property, as stated by the State of Oregon's Web site.
The authors of the study are William Jaeger and Andrew Plantinga, economists in OSU's College of Agricultural Sciences.
"We thought that the evaluating methods for Measure 37 claims were addressed in the wrong way," Jaeger said.
The authors examined two approaches used for calculating reductions in property value, the before-and-after and single exemption methods.
"The before-and-after approach is the most reasonable out of the two," Jaeger said. "You look at the face value of a private property before a land use regulation was enacted, and you look at the value after."
The Portland Metro regional government has denied all Measure 37 claims, while using the before-and-after approach. Sonny Conder, Portland Metro's urban land economist, gave an example of the before-and-after method.
"Let's say an owner purchased an acre of property five years ago for $250,000, for real estate development," Conder said. "A few years later the local jurisdiction rezones the area, reducing the number of real estate units the developer can build on the property. The reduction of units reduces the value of the property to $150,000, that is a valid reduction of value to a property."
"Wildish Land Company in Eugene has made a Measure 37 claim, seeking compensation, but applying the before-and-after approach actually shows that the property's value increased by 1,400 percent," Jaeger said.
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