Takings, Givings and the Tragedy of the Petulant Me


September 1, 2006


Browse in Takings

Of all the whiners and complainers that beset the politics of this country, the “property rights” lobby is surely among the most self-dramatizing. I’m not talking about people who have a normal concern about their property – who don’t want people using their windows for target practice or making bonfires in their yards.  I’m talking about people who regard just about every restriction upon their property as a “taking” of it; and who demand compensation from the taxpayers, while they rail at the impending totalitarian state.

What such people lack in maturity and wisdom, they have in money or moneyed enablers.  The result has been a raft of ballot measures that would turn “takings” dogma into law.  The first to pass was Measure 37 in Oregon, a state that was a pioneer in land use laws.  Not coincidentally, the state today is green and clean, downtown Portland is thriving,  and sprawl has been remarkably contained.  Measure 37 pretty much dismantled that system.  Now kindred ones are on ballots in Montana, Idaho, and Washington State.

They have come with the usual dramatics regarding confiscation of property.   But how real is that claim?  According to the Sightline Institute in Seattle, a student at the University of Washington by the name of John Abbotts set out to test the assumption behind these measures – namely that development restrictions wipe out property values.  He looked at land in three watersheds in rural King County outside of Seattle.  Two of these were subject to stringent land use regulations, while the third had only standard five-acre zoning.

Abbotts found that property values in the watersheds with strict regulations went up more in absolute terms than in the one without them – by twice as much in fact.  The increase was 70 and 72 cents per square foot in the heavily restricted areas, versus 30 cents per square foot in the less restricted ones.  In percentage terms the less-restricted land went up more, but not by much: 71% over the eleven-year study period, as opposed to 69% and 48%.

A lot of caveats apply to any study of this kind.  Still it seems unlikely that anyone is going to miss a meal because of land use restrictions such as these.  Most landowners apparently will do well, with them or without them.  To put this another way, development restrictions can give value as well as take it.  Does anyone really think the value of their house would increase if government repealed the regulations that stop a bar or porn shop from opening next door?

(In Oregon, one farm family has sued its county for waiving development controls rather than pay a “taking” claim, on the grounds that a new subdivision next door will restrict operations on the  farm and therefore be a taking of their own property.)

In a reality-based system, such givings would be balanced against any alleged takings.  Taxes could be based upon them, as advocates of site-value taxation long have argued.  But the “property rights” lobby casts itself as chronic victim, never as beneficiary; and it turns out that the ballot measures they are advocating are rigged to affirm this script.  In practice, local governments in Oregon rarely have the resources to contest claims for compensation under Measure 37, no matter how outrageous.  So property owners win by default.

Eric de Place of Sightline provides examples in a report on the Institute’s website.  In one case, the owner of arid farmland near a small town filed a claim for $284 million.  In another,  case, the owner of an orchard was claiming $64 million, which was much more than the combined value of all the properties listed for sale in the zip code, including mansions with river views.

At the very least such claims would raise an eyebrow.  But to contest them would require lawyers and appraisers, which local governments cannot afford.   Here’s how de Place puts it:

“[The amount] doesn’t really matter–he could have picked any old number out of a hat–because the value of the claim is almost irrelevant. Agencies don’t have the resources to contest Measure 37 claims and not a single government agency has. And Oregon taxpayers probably wouldn’t look too kindly on spending $64 million to keep him in the farming business instead of the land speculator business. So the only option is to suspend land use regulations for him and wait for him to turn his fruit trees into vacation houses or strip malls or maybe even a strip mine. There’s no way for the community to know what he’ll do and no way for Hood River neighbors to have any say at all in the matter.”

De Place acknowledges he took extreme cases.  But that’s what the advocates of these measures do, and then some.  But the real agenda here is not compensation for actual loss.  It is the elimination of all development restrictions, and the Los Angelesication of everyplace.  Initiative 933 on the Washington ballot prevents local governments even from charging a nominal fee to help defray the cost of processing these claims.

Myself, I am not without sympathy for property owners in particular cases.  The shoe can pinch excessively, and there needs to be more provision for when it does, and more flexibility too.  Rigidity breeds resentment.   But “fix it” is a harder case polemically than is “leave my property alone.”  The whiners and complainers have the upper hand, and the deeper pockets too.

My guess is that my son is going to have a lot less open space in which to hike and fish and rest his eyes than I have had.   One day he is going to look out at oceans of development and malls and ask “Couldn’t they just have left a little of this alone?”

They talk about the “Tragedy of the Commons.”  But I am more concerned about the “Tragedy of the Petulant Me.”

[Sightline Institute is doing an exceptional job of covering this and other quality-of-life issues in the Pacific Northwest.  Here’s their website.]