Oregon property rights still in legal limbo

HILLSBORO, Ore. — Harvey Kempema was among the first property owners in the state to try to take advantage of Measure 37 after Oregon voters overwhelmingly passed the sweeping property-rights initiative in 2004.

The farmer-turned-real-estate-broker filed claims under the new law, demanding that the state and county waive land-use rules that for more than three decades had barred him from subdividing his old dairy farm. He planned to sell it off in 10-acre chunks, then retire.

"I was going to take my $2 million and move to Mexico and never look back," he says.

Nearly two years later, Kempema is still in Hillsboro.

Oregon courts haven't yet sorted out exactly what Measure 37 means. Until that's done, the promise — or threat — that Measure 37 represents remains in limbo.

Measure 37 orders governments to either compensate landowners for land-use restrictions adopted any time after they acquired their property, or waive those rules. Its passage in Oregon, a state known nationally as a land-use planning pioneer, has inspired similar proposals in other states.

Washington voters will decide Nov. 7 on one of those proposals, Initiative 933. Supporters and foes alike are pointing to Oregon's experience as they troll for votes.

Property-rights measure

If I-933 passes, the state, cities and counties would be required to pay landowners to follow many regulations adopted since 1996 that restrict what they can do with their property.

Opponents say the initiative could encourage sprawl and bankrupt the state.

Supporters say those dire forecasts are exaggerated. This isn't about money, it's about less regulation.

I-933's backers say Measure 37 has restored fairness to Oregon's land-use planning system. I-933's opponents say it has created chaos, imperiled farmland and encouraged sprawl.

But the reality here on the ground in Oregon is that almost nothing has changed yet. As far as anyone can tell, only one house is being built so far because of Measure 37.

"I think we're in the calm before the storm," says Bob Stacey, executive director of 1000 Friends of Oregon, an anti-sprawl and anti-37 group.

3,300-plus claims filed

Oregon property owners have filed more than 3,300 Measure 37 claims.

In total, they involve about 218,000 scattered acres. Put together, that's an area nearly as large as Mount Rainier National Park.

The claims range from proposals to build single houses on farmland to plans for a pumice mine, geothermal-energy test wells and as many as 100 vacation homes on private property inside Newberry Volcanic National Monument.

Of the claims that have been decided, 90 percent have been approved.

In every case, cash-strapped governments have chosen to waive the rules instead of paying compensation.

But Oregon courts still are sifting through more than 80 lawsuits dealing with the scope of Measure 37. In the meantime, almost all landowners with approved claims and development dreams are sitting tight.

Stacey says the uncertainty is hurting both sides — small landowners with legitimate beefs about burdensome regulations as well as neighbors concerned about big subdivisions or gravel pits next door.

He wants the state Legislature to craft a replacement for Measure 37: "Let's acknowledge that this is a mess," he says.

But Ross Day, legal-affairs director for Oregonians in Action, the property-rights group that sponsored Measure 37, says he's sure the legal questions will soon be resolved, and the law will fulfill its promise.

Still, he says, "I'm surprised so many questions have been raised."

The battle's faces

Measure 37 passed with 61 percent of the vote. Its success was credited in part to its "poster children," regular folks who told stories of how Oregon's growth-management laws had blocked their modest plans for their property.

Two years later, other people are coming forward as poster children for the other side.

Bob and Crystal VanderZanden grow grass seed on 1,650 scattered acres in Washington County, where suburbs meet silos west of Portland. They lease most of their land. One of the few parcels they own is a 72-acre field north of the college town of Forest Grove.

Last year the state and county approved Measure 37 waivers for the field just to the east of theirs. Portland commercial real-estate developer Dale Bernards, whose mother has owned that land since 1965, plans to subdivide the property into 48 one-acre lots, then build a house on each.

He figures they'll sell for up to $1 million apiece.

The VanderZandens fear Bernards' subdivision will make it more difficult, perhaps impossible, for them to keep farming. They have sued the state to get the Measure 37 waivers overturned.

The VanderZandens, who are shirttail relatives of the Bernards, say they bought their land four years ago specifically to get away from areas earmarked for growth, and from the conflicts they have encountered elsewhere farming next door to suburban development.

They say suburban neighbors have used their fields as dump sites, complained about dust and spraying, and even called police to stop farming operations that can be done only at night.

"It's clear to me that agriculture and cities do not mix," Bob VanderZanden says.

Day, of Oregonians in Action, says Oregon's "right to farm" law should protect the VanderZandens from their future neighbors' interference. If it doesn't, he says, "that would concern me more than the fact that islands [of development] are popping up."

The VanderZandens' lawsuit is scheduled for trial in December.

Meanwhile, Dale Bernards says he has commissioned a traffic-impact study, begun soil tests for septic systems and taken steps to get water.

He also has applied for another Measure 37 waiver. This one would exempt the subdivision from a county requirement that it have no significant impact on surrounding farms.

Waiting to build

Right now, the biggest legal question about Measure 37 is whether waivers apply only to the current owner, or are "transferable" to whoever buys the land. If the courts decide they're not — and that's what Oregon's attorney general has said — a landowner could subdivide property and sell the lots, but the new owners might not be able to build anything.

Day predicts the courts will reject the attorney general's interpretation. Even if they don't, he says, there probably are ways to get around it legally.

For now, however, the uncertainty has made lenders wary of financing development on Measure 37 land.

In Gaston, hazelnut grower Colin Kohlmeyer has been trying for more than a decade to build a house in his orchards. Now he has Measure 37 waivers that allow it, but he's waiting for the transferability issue to be resolved so there won't be any loose ends.

"I'm just kind of sitting back, waiting for some precedent," he says.

In Hillsboro, Harvey Kempema has helped his parents and some of his real-estate clients get Measure 37 waivers. He says the uncertainty over transferability has put their development plans on hold, too.

His own claim to carve up his old farm was approved by the county but denied by the state. It says he didn't actually own the 56-acre property until several weeks after zoning restrictions were adopted in 1973.

Kempema says he had enough of an ownership interest before then to qualify, so he plans to refile the claim.

"I'm not going to let it die," he says. "There's too much to gain."

He remains a big fan of Measure 37. But as his neighbors to the north prepare to vote on I-933, Kempema offers this observation:

"Hopefully they've got it a little tighter written."

Eric Pryne: 206-464-2231 or epryne@seattletimes.com