http://djcoregon.com/news/2019/04/09/op-ed-oregon-apparently-serious-preserving-farmland-farming/

In late February, the Oregon Supreme Court gave the final word (for now, at least) on a controversy that has dragged on for many years (and at one time involved a law firm that included your columnists).

Waste Management sought to expand its solid waste landfill in an exclusive farm use (EFU) zone in rural Yamhill County because it was running out of capacity. A coalition of farmers, vintners and farmland preservation supporters had consistently opposed the application, just as the county had consistently approved it. At issue before the Supreme Court was whether the county’s conditions of approval met state law. The conditions required the landfill operator to buy fruit contaminated by emissions from the facility and to send litter patrols to a nearby farm to respond to litter in its hay operations. Both the Land Use Board of Appeals (LUBA) and the Oregon Court of Appeals had found that, with one exception, those conditions were sufficient under the law.

Since 1961, Oregon has expected agricultural land to be preserved for farm use in several ways: by lowering assessed valuations (and thus property taxes) on farmland in farm use, by limiting nuisance claims against farmers undertaking farm activities within environmental regulations, and by easing land use limitations on commercial farms. In return, the state has had a policy of keeping farmland in large blocks by limiting parcelization, limiting most rural housing to what is needed by commercial farmers, and limiting or prohibiting nonfarm uses on farmland.

This latter requirement is important to the agriculture industry. Shopping malls, residential subdivisions and steel mills, as examples, are prohibited on EFU lands, while other uses that may otherwise be necessary (roads, utilities and churches) may be permitted. Still other uses such as a solid waste landfill are subject to discretionary approval standards requiring the use only if it would not “force a significant change” in accepted farming practices or “significantly increase the cost” of those practices on surrounding agricultural lands. To assure that these standards are met, a county may impose “clear and objective conditions” on a permit.

Surrounding farmers opposing the expansion of the landfill raised issues regarding litter in wheat fields, the attraction of “nuisance birds” that would interfere with adjacent cherry and grass seed operations, and noise and odor from the facility adversely impacting nearby wineries and farm stands. The county rejected these contentions and focused upon impacts on individual farms (as opposed to cumulative impacts on farming generally) and imposed conditions to mitigate the identified impacts. LUBA remanded the county’s decision on the issue of cumulative impacts and required the county to evaluate those cumulative impacts; however, LUBA also found that, with the conditions imposed by the county, the impacts on individual farms had been appropriately mitigated.

The Oregon Court of Appeals, through Judge Sercombe, affirmed LUBA’s order, but used a different test, suggesting the significant change and significant cost increase requirements were met if agricultural lands were preserved for productive use to obtain a profit in money and food provision. Thus, unless the allowance of the non-farm use significantly decreased the supply of agricultural lands, the profitability of the farm, or the supply of food, the non-farm use could be approved.

The Oregon Supreme Court, in its extensive and long-awaited decision, speaking unanimously through Justice Lynn Nakamoto, stressed longstanding efforts to preserve agricultural land for farm uses by the state Legislature and the Land Conservation and Development Commission (LCDC). The court noted that the County of Appeals decision had, on the contrary, stressed a broad view of agriculture and was more concerned with large-scale activities, whereas the opponents stressed impacts of the use on every farm activity on each surrounding farm parcel.

That court agreed with the opponents, finding the interpretation of “significance” is a question of law, rather than of fact as the county and landfill operator contended, and that the analysis of whether identified changes or increases in cost are “significant” applies to each farm and to each farm activity, rather than to farming in the general area. Reading that term in the light of other well-articulated farmland protection laws, the court concluded: “Together, those provisions suggest that the Legislature’s agricultural land use policy is a long-term one centered on preserving agricultural lands in large blocks for working farm and forest operations through limitations on nonfarm uses and development and through incentives for retention of rural lands in EFU zones; nothing suggests that profitability of specific farms is a focus of the policy.”

Using legislative history, which underscored that “significance” focused on impacts on individual farms to protect the limited supply of farmland, stressing an underlying legislative assumption of the Oregon system that long-term resource decisions should not be based on short-term economics. If a farmer must change accepted farm practices, even if there is no increased costs or reduced profitability, this class of use cannot be allowed.

The court affirmed LUBA’s remand of the case on the inadequacy of the county’s cumulative impacts analysis. The court also agreed with the opponents that the burden of mitigation of adverse impacts could not be placed upon the affected farms, such as by requiring the farmer to sell contaminated fruit to the dump operator, in lieu of selling that uncontaminated fruit to real customers, or allowing cleanup crews to traipse through farm fields with maturing crops. In particular, the court found that payments for non-marketable fruit to compensate for the inability to engage in accepted farming practices contravenes longstanding legislative policy to preserve agricultural lands and that litter from the disposal site that blew onto another farm, if substantial, also constituted a change in accepted farming practices of growing, harvesting and baling hay and was not ameliorated by paying for litter patrols.

The case now returns to Yamhill County for another decision. However, the court’s interpretation of the statutory definition of “significance” should complete change the outcome.

This case will make approval of a number of nonfarm uses in an EFU zone very difficult if the adjacent farm operator is able to marshal evidence of significant cost increases or changes in accepted farm practices. The new interpretation of Oregon’s farm laws is “significant.”

Edward Sullivan is a retired practitioner of land use and municipal law with more than 45 years of experience. Contact him at esulliva@gmail.com.

Carrie Richter is an attorney specializing in land use and municipal law at Bateman Seidel. Contact her at 503-972-9903 or crichter@batemanseidel.com.

http://djcoregon.com/news/2019/03/12/op-ed-possible-new-method-addressing-housing-affordability/

The fact that Oregon is in the midst of a devastating housing crisis is not news. Since 2011, the rental vacancy rate in Oregon has hovered between 3.9 percent and 4.9 percent, while the national average has gone from 9.5 percent to 7.1 percent. In 2015, the Portland-Vancouver-Hillsboro metropolitan statistical area had either the highest or second-highest annualized rent growth in the country. Unsurprisingly, these market constrictions weigh most heavily on families with low or moderate incomes. Half of all renters in Oregon spend more than 30 percent of their income on rent and utilities; they’re “cost-burdened,” by experts’ definition. In 2016, Oregon had about 298,000 cost-burdened renter households – more than the total number of households in Portland.

Over the past few years, the Oregon Legislature has tried to tackle this affordability problem from a number of different angles – by expanding tenants’ rights, providing public dollars to subsidize the provision of low-income housing, and changes in land use laws. Responses on the land use side have largely focused on removing barriers in housing supply through baseline mandates such as requiring that accessory dwelling units be a permitted use in all single-family zones and expediting the residential permit process.

The 2019 legislative session has opened with a flurry of similar bills intended to further these goals – but there is one bill that is striking because it contains something different. Rather than ordering local governments to allow certain types of housing or limiting their ability to restrict the same, House Bill 2003 would require cities with populations of 10,000 or greater, and Metro, to calculate the extent of their local affordability gap and then try to solve it.

This approach is not unique. Achieving compliance with most of Oregon’s statewide land use planning goals is premised on an inventory, analysis, and a solution-based approach. For example, Goal 10, relating to housing, provides that buildable lands are to be inventoried, shortfalls identified and that, based on this data, the local government will “encourage” the provision of needed housing at price ranges and rent levels and include flexibility of housing location, type and density. Although this objective may sound good on paper, the Land Conservation and Development Commission (LCDC) has not elaborated on those expectations regarding the details of type and density, given the political sensitivities of that elaboration at the local level. Instead, the LCDC initially left that discretion up to local governments with most of its efforts aimed at providing suggestions and housing tool kits to assist local governments in meeting their housing responsibilities.

HB 2003 would aim to fill in those gaps by requiring local governments to plan for needed housing. First, it would require that the Oregon Department of Administrative Services (DAS) create a regional housing needs analysis so the state has accurate statewide data on housing need. The bill also would require each city and Metro to prepare an inventory of the existing housing stock and provide a housing shortage analysis as well.

The housing needs analysis will identify the total number of housing units necessary to accommodate anticipated populations in a region over the next 20 years and must classify housing by type (i.e., attached or detached single-family and multifamily housing) and affordability (i.e., “very low income” meaning households at or below 50 percent of the regional median income, up to “high income” meaning above 120 percent of the regional median income.) These needs and housing analyses must be completed every eight years.

Within 12 months of determining its estimated housing need, each regional or local government must adopt a housing strategy identifying what steps it will take to meet the housing need. Included in this calculus is whether the housing market is likely to develop to the zoned densities, taking into account the financial or density bonus incentives, for each affordability category. Where there is a land shortage, Metro or a city may decide whether to: 1, expand its urban growth boundary, 2, alter its regulations to increase the likelihood that housing will be developed at needed densities, or 3, use a combination of the two based on the priority scheme provided for in Oregon law.

Under the bill, the LCDC would be required annually to identify up to 10 cities that are having difficulty implementing their housing strategy. The Department of Land Conservation and Development (DLCD) may prioritize technical assistance resources for these cities or provide enhanced oversight and enforcement. Currently, the LCDC has authority to amend a local jurisdiction’s comprehensive plans or land use regulations to comply with the existing housing and urbanization statutes, and HB 2003 would allow the DLCD to petition the LCDC to take such action if a local jurisdiction is not implementing its housing strategy. These provisions restore much of the authority granted to the LCDC to accomplish periodic review, whereby the LCDC would review local government plans and regulations to ensure compliance with the goals on either a seven- or 10-year cycle, but where enforcement of these requirements has stalled indefinitely in recent years.

One of the reasons cited most often for abandoning periodic review was the cost to local governments in conducting these analyses and reporting back. HB 2003 would provide additional funding for the state agencies where these additional obligations are imposed, and authorize the DLCD to provide funding to local governments to implement their needed housing strategy for those 10 priority cities, but it would not reimburse local governments for the costs of determining the housing need or the housing strategy based on those findings, although the Legislature in 2018 provided $1.73 million to the DLCD (HB 4006) to provide local governments for the purpose of housing planning.

Notwithstanding the costs, which might be significant, the importance of this effort cannot be understated. Everyone agrees that we need more affordable housing and that housing prices are increasing, but we are completely in the dark with regard to a jurisdiction-based accounting of this shortfall based on the varying affordability levels necessary to make planning decisions that are calculated to respond. Without collecting this data, we are ill-prepared to determine if the existing efforts (and proposed ones) to reduce barriers to housing are working or whether more targeted, customized efforts would be more effective.

Edward Sullivan is a retired practitioner of land use and municipal law with more than 45 years of experience. Contact him at esulliva@gmail.com.

Carrie Richter is an attorney specializing in land use and municipal law at Bateman Seidel. Contact her at 503-972-9903 or crichter@batemanseidel.com.

Randall Pozdena

https://portlandtribune.com/pt/9-news/422202-325077-economist-anti-sprawl-rules-boost-home-costs

Land-use planners and affordable housing advocates now are blaming the Great Recession for many of the people living on the streets — and the even larger number struggling to keep their homes.

Several recent studies show that new home and apartment construction all but stopped in the years after the housing market collapsed around 2008, creating a growing lack of available homes when the economy roared back to life and more people began moving to the Portland region, drawn by its available jobs and livability. The low vacancy rate drove up housing costs as demand exceeded supply, forcing low-income residents out of their homes as costs increased and putting many more at risk of homelessness.

But economist Randall Pozdena isn’t buying all of that. He says regional housing costs were increasing far faster than the national average before the recession started, and have merely resumed that trajectory since it ended. Pozdena agrees there is a regional housing shortage driving costs up, but he also blames state and local land-use planning policies that have limited the supply of land for new home and apartment construction. They include urban growth boundaries around metropolitan areas that limit where new development can happen.

“When anti-sprawl policies were enacted, there wasn’t any talk about their potential impact on housing affordability. Now it’s clear — they’re driving up housing costs,” said Pozdena, president of QuantEcon Inc., an Oregon-based economics consulting firm.

Pozdena recently completed a study titled, “The Housing Affordability Crisis: The Role of Anti-Sprawl Policy.” It claims there is a clear connection between states and cities with strong land-use control policies and high housing costs. The study compared a 1999 ranking of states with strong “anti-sprawl” policies by the Sierra Club with historic home prices in all 50 states.

The Sierra Club said Oregon had the strongest anti-sprawl policies in the country in 1999. Pozdena’s study found Oregon and the Portland region had some of the highest housing costs in the country both before and after the Great Recession — and he said it’s not a coincidence. States like Texas, with limited land-use policies, had the smallest increases.

“The Sierra Club rankings were a snapshot in time. They said Oregon had the strongest anti-sprawl policies. It’s not an accident, not a statistical anomaly,” Pozdena said.A

The Sierra Club did not respond to requests for comment about Pozdena’s study.

Economist worked on other studies

Pozdena admits he is a longtime skeptic of Oregon’s land-use planning policies. He has been criticized for years by land-use planning advocates who say he is biased in favor of the home building industry. And his new study was published by the Cascade Policy Institute, a Portland-based free market think tank that has long been criticized by them, too.

But Pozdena also is a senior director of ECONorthwest, a local economic consulting firm that has produced a study saying it can cost less to build in existing cities than on new land brought into the urban growth boundary (UGB) administered by Metro.

In fact, Pozdena worked on that study with Mike Wikerson, the firm’s project director. Titled “Housing Underproduction in Oregon,” it was commissioned by Up for Growth, a national advocacy organization that promotes building housing close to jobs, shopping and transit. Wilkerson presented the study last October at an event hosted by the organization.

According to Wilkerson, Pozdena used much of the same research in both studies. Wilkerson agrees that limiting land supply increases housing costs, but argues the solution is more complicated than expanding or even eliminating the UGB.

“Randy is right, but there is more to increasing housing than increasing the land supply. There are other issues, like the cost of the infrastructure to support the housing. If developers can’t pay for it, nothing’s going to be built,” says Wilkerson, pointing out that few new homes have been built in some of Metro’s previous UGB expansion areas.

Wilkerson also said anti-sprawl policies only affect areas where people want to live, like Portland.

“You could draw a boundary around a city like Detroit where people are leaving, and it wouldn’t make a bit of difference,” Wilkerson said.

Big plans for producing more housing

Pozdena’s study was released as previously unthinkable proposals are being considered to increase housing in Portland. They include the current recommendations of the Residential Infill Project, which would rezone 93 percent of the city’s single-family neighborhoods to allow fourplexes on practically every lot.A

Kotek, D-Portland, has introduced a bill in the 2019 Oregon Legislature that would require the same thing in all cities with more than 10,000 people. And state Senate President Peter Courtney, D-Salem, has introduced a bill that would allow far higher densities within one-half mile of major transit lines and light-rail stations.

The study also was published after Metro, the regional government in charge of land-use planning in the Portland area, approved the largest UGB expansion in years. After changing the criteria for considering such expansion, the Metro Council approved requests from four cities to add 2,200 acres to the UGB to accommodate up to 9,200 new homes.

Pozdena doesn’t believe such proposals and the recent UGB expansion will significantly reduce home costs, however. He said the housing shortage is now so large, most of the new housing will still be financially out of reach for the majority of Portlanders.

“It’s not nearly enough,” said Pozdena, who notes the current RIP recommendations would only produce 24,000 new housing units over 20 years, a fraction of the 280,000 or so homes of all kinds Metro says are needed in the region by 2038.

You can read Pozdena’s study here.

The eastern part of Oregon is a land unto itself. Its people, its industries, and its political and social attitudes vary widely from the majority of the state’s population concentrated in the Willamette Valley. Its challenges are also unique. Aside from some places like Hermiston, a hub for logistics and data center activity, and Umatilla, where high-value irrigated agriculture help diversify the economy, most of Eastern Oregon experiences unemployment and loss of population on a scale greater than the Willamette Valley. The industries in the area beyond Bend tend to be resource-based and less attractive to prospective employers, employees or potential residents. Most counties are losing population as their sons and daughters leave to live and work elsewhere.

From the Daily Journal of Commerce

Eastern Oregon faces an existential crisis and some of its residents would like the Legislature to revise the state’s planning and land use regulatory system to change things. Senate Bill 2, sponsored by two Eastern Oregon Republican senators and Senate President Peter Courtney, a Democrat, is the latest effort and is not, as with some of its predecessors in previous legislative sessions, an effort to exempt about half the state from its planning laws or to render those laws advisory.

Rather, the proposal is to allow any “listed county” (specifically Baker, Gilliam, Grant, Harney, Lake, Malheur, Sherman, Union, Wallowa and Wheeler) to designate up to a cumulative total of 50 acres outside of existing urban growth boundaries for industrial or employment uses. This allowance would be given, notwithstanding existing state land use policies protecting farm or forest lands or limiting urban uses to lands within urban growth boundaries. The only condition is that these uses not occur on high-value farmland and that the proposal be preceded by an Economic Opportunity Analysis to justify why the proposed industrial or employment use could reasonably be expected to expand or locate in the county based on a review of trends on a national, state, regional or county level. The requirements of the analysis are detailed and consistent with the approach state and local governments use to justify these uses within urban growth boundaries.

The stated reasons for this bill are direct – the region needs jobs and a bigger tax base to retain and attract residents and businesses. However, despite a good motive, the bill is a bad idea and ought to fail.

In the first place, creating urban islands in a rural, unincorporated sea is not good land use planning. If successful, these new 50-acre centers would likely require extensions of urban services such as roads, sewer and water. These rural counties are in no position to finance these necessary extensions, which are normally provided by cities to lands within urban growth boundaries. Cost savings of buying less expensive lands will be more than made up for in new infrastructure costs.

Rather than expanding urban growth boundaries outward, or creating 50-acre urban centers in remote areas, communities should rely on the ever-expanding global marketplace for greater opportunities for e-commerce, service and telecommuting. These new opportunities do not require expensive infrastructure and could be parlayed with classic Old West cities without breaking the urban growth boundary. Consider, for example, Softstar Shoes, which recently opened its headquarters and manufacturing operations in downtown Philomath in a former roller skating rink.

Second, the current system is not an impossible obstacle to providing land use approval to resource-based industry (potato processing plants, wood products processing and the like) that is either allowed outright or as a conditional use permit under current law. For other industrial or employment uses, approval can be gained through an exception to existing land use rules. The exceptions process is justifiably rigorous, because it requires a landowner who buys this cheaper land, the development of which would trigger significant infrastructure extension costs, to justify why existing urban lands cannot accommodate the proposed use or why an existing urban growth boundary cannot be extended. Moreover, an exception requires the landowner to respond to the inconvenient questions of infrastructure, of the need for the use, why it must be located on the particular land and an analysis as to why alternative or adaptive reuse of buildings and other amenities is not feasible in cities such as Pendleton, La Grande or Baker. The fact that these alternatives might negate the viability of an unserved rural island is no reason to pass Senate Bill 2.

Finally, throwing a sop to solve an issue looking for a problem for political reasons won’t address the fundamental trend in human migration to cities and away from rural areas or stop the relentless chorus asserting that the state’s land use system is harmful to the economy of the region. Eastern Oregon has seen its fortunes decline for many reasons – its perceived remoteness, the switch away from a relatively job-laden resource base in timber and agriculture for economic or environmental reasons, the attraction of larger cities and suburbs with more job opportunities, and the greater ability of cities to finance necessary improvements. The only way to get that back is by revitalizing cities and not by burdening them further by demanding that they serve new urban islands or by competing with them for prime industrial development.

There will always be complaints that the system isn’t working; however, those complainants have not shown that the current land use system is the reason. Critics will always want that one extra sweetener, and when that doesn’t work out, they’ll insist that salvation is now just over the next hill.

Edward Sullivan is a retired practitioner of land use and municipal law with more than 45 years of experience. Contact him at esulliva@gmail.com.

Carrie Richter is an attorney specializing in land use and municipal law at Bateman Seidel. Contact her at 503-972-9903 or crichter@batemanseidel.com.

http://djcoregon.com/news/2019/01/09/op-ed-court-public-need-required-wetland-waterway-fill-permits/

The Oregon Department of State Lands (DSL) requires a “removal-fill permit” for any activity that involves filling or removing 50 cubic yards of material or more in a wetland or a waterway. The purpose of the law, enacted in 1967, is to ensure protection and the best use of Oregon’s water resources for residential, commercial, wildlife habitat, public navigation, fishing or recreational uses.

The obligation to obtain a permit applies to all landowners, whether private or public. The general goal for requiring review is to evaluate and determine that the fill proposal represents a practicable alternative that will have the least amount of impact on wetlands or waterways. State law sets forth criteria for issuance of a permit and requires a finding that the fill proposal is consistent with “the protection, conservation and best use” of the water resources, among other things.

The permit criteria go on to set forth an additional nine factors that DSL must “consider” when issuing a permit. One of these factors is: “The public need for the proposed fill or removal and the social, economic or other public benefits likely to result from the proposed fill or removal.”

Up until last month, the DSL’s long-standing practice was to evaluate the public need and benefit from a fill proposal but not require a finding that a proposed project serves a public need. Last month, in Citizens for Responsible Development in The Dalles v. Wal-Mart Stores, the Oregon Court of Appeals rejected DSL’s approach.

This case grew out of a challenge to a fill-removal permit issued to Wal-Mart allowing it to fill a series of vernal (seasonal) pools in order to construct a new store. DSL issued the permit and made findings that: “The record is inconclusive with regard to whether the project, for which the fill or removal is proposed, will address a public need.” The findings went on to note the market demand that may drive the need for a Walmart store as well as question the long-term economic benefits for such a project. Ultimately, notwithstanding its conclusion that “the record was inconclusive with respect to public need,” DSL found that the proposal included sufficient conservation efforts, minimized impacts and adequate mitigation measures to approve the request.

On appeal, the petitioner argued that Wal-Mart failed to meet its burden to demonstrate that the project would fulfill a public need. Relying on precedent from an Oregon Supreme Court case in 1979, the petitioner argued that DSL must make an affirmative finding that the project would serve a public need before it may issue a permit. DSL’s responses included pointing out changes in the statutory language since the 1979 case was decided, most notably altering the requirement from finding a public need to “consider” the public need for the proposed fill.

Rather than focusing solely on the change in the plain language, the court looked to the legislative history for the amendment was to “just follow” the precedent set in the previous case – allowing some level of fill “as long as the director had weighed the extent of the public need for that fill against the interference of the water or non-water use.” Relying on this legislative history, the court found that DSL was required to find that “the public need predominates over the loss of the waters of the state caused by the proposed project.” Because DSL found the evidence of public need inconclusive, DSL should not have issued the permit.

It is not clear whether DSL will seek review of this decision by the Oregon Supreme Court or ask the Legislature to amend the review criteria further. What is also not known is what can be included in the consideration of public need. The statutory context suggests that the “project” for which the public need is evaluated is to be directed to the fill project alone and not to the ultimate development or use for the land after the waterway is altered. However, separating the fill itself from the proposed use may prove to be difficult, if not impossible, to establish a public need.

In other words, how can any fill provide a public benefit without taking the end result into account? Does this decision place DSL in a position of making broader public policy judgments about issues that go beyond simply protecting wetlands and waterways for recreation and navigation purposes? In any event, this case represents a significant change in how the Department of State Lands has reviewed permits and may have the effect of preserving the status quo for many potentially affected water resources.

Edward Sullivan is a retired practitioner of land use and municipal law with more than 45 years of experience. Contact him at esulliva@gmail.com.

Carrie Richter is an attorney specializing in land use and municipal law at Bateman Seidel. Contact her at 503-972-9903 or crichter@batemanseidel.com.

http://djcoregon.com/news/2018/12/11/op-ed-california-takings-decision-unnerves-local-governments/ 

In October, a panel of the California Court of Appeals decided a challenge to some amendments to the San Francisco Administrative Code and rendered a decision that California local governments will find troubling. And given California’s influence in land use matters and the nationwide search for solutions to the homelessness problem, this ruling’s implications may be much wider.

Single-room-occupancy hotels (SROs) provide basic, cheap accommodations and shelter to people who might otherwise be on the streets. In tourist destinations, such as San Francisco, SRO hotels are also economically desirable as rentals. Owners, seeking greater returns on their investments, often seek to convert them into tourist accommodations, exacerbating the homelessness problem. For almost four decades, these owners have been in conflict with the city, which has amended its code several times to limit or offset those conversions.

Two previous efforts by the city illustrate this conflict. The city had previously imposed moratoriums on these conversions and put in place a prohibition on the same unless the hotel owner made substitute accommodations available or paid a substantial fee for the city’s use to provide shelter for a target population. More recently, the city required that SROs be available for at least a week at a time. These city actions survived legal challenges.

In the case decided recently, the city extended the minimum SRO occupancy period to 32 days. That odd number can be explained by another section of the city’s code that provides for landlord-tenant protections to “kick in” for rentals in excess of one month. The city’s actions further limit the ability of SRO owners to convert these units to more profitable tourist accommodations. The SRO owners sued, alleging that their property had been “taken” without just compensation and also requested a preliminary injunction against the new code provisions. A trial judge denied the preliminary injunction and the SRO owners appealed.

At first glance, the owners’ case seemed weak, for they still had both their property and an income stream which, although it would certainly have been enhanced by conversion to tourist hotel use, would normally have been sufficient to avoid a taking. The SRO owners were clever in their approach, however, for the case was not brought under the federal Constitution, but that of California – the case law of that state was used instead.

The SRO owners cited a 1954 case involving a Los Angeles code provision that sought to “amortize” a lawful nonconforming plumbing business in a residential zone. Los Angeles provided that after a period of time to recoup its physical investment, the plumbing business must move. The California courts upheld that decision, finding no taking, so long as the investment had been recouped. The SRO owners argued for a similar amortization approach and contended that, without such a period, the San Francisco code amendments amounted to a taking and that a preliminary injunction should be issued to prevent the amendments from being effective.

The appellate court agreed and remanded the preliminary injunction request for further proceedings below, rejecting the city’s contention that the change in the minimum stay provisions was not “property” that could be taken and for which compensation must otherwise be paid. The court observed that there was a situation before the code was amended in which stays between 7 and 31 days were permitted without the onerous landlord-tenant regulations being effective. That situation ended with the challenged code amendments, so the court ruled that the city could not undertake a new rental regime without providing for amortization and that to do so otherwise could be a taking under the California Constitution.

The decision is odd for several reasons. Unlike the Los Angeles plumbing business case, determining which physical investments in the SRO hotel are subject to amortization will be difficult because hotel improvements will be the same whether for SRO or tourist occupancy. Secondly, the decision was not ordered to be published and thus cannot be used as precedent in California courts. This approach usually occurs when a decision follows, rather than makes, law, which is not the case here and suggests the court may be uncertain about its reasoning and could revisit the same in a subsequent appeal on the merits of the case.

The decision is also disquieting, for it suggests that normal regulatory changes may require a delay in implementation so as to allow the regulated party the opportunity to amortize its investments. Even if the court were to apply such a delay only to real property regulations, there would be disputes in determining which aspects of property (physical or otherwise) qualified for amortization and how they would be appraised. For example, would the city have to delay new fire or record-keeping regulations or pay for their earlier implementation? A similar dilemma was posed by Oregon’s Measure 37, when new land use regulations would generally require taxpayer payments under a novel “just compensation” theory set out in the measure in order to be effective.

Both the SRO owners and the city have legitimate concerns over property regulations and dealing with the homeless. However, the California decision in this case does not appear to be an ideal solution, and the precedent it sets may be constitutionally problematic.

Edward Sullivan is a retired practitioner of land use and municipal law for more than 45 years. Contact him at esulliva@gmail.com.

Carrie Richter is an attorney specializing in land use and municipal law at Bateman Seidel. Contact her at 503-972-9903 or crichter@batemanseidel.com.

You are encouraged to be part of a critically important conversation on Monday, December 10th. This conversation will focus on the future of the Oregon planning program in the context of a vision for the future of our state and what state system needs to exist to help us make it real.

This conversation is the next step in a two and a half year discussion which started with the Oregon City/County Managers Association conference in 2016 where I led a panel discussing the next 40 years of the Oregon Planning program, through dozens of conversations over the following two years, some gatherings of local government officials over the last few months to gel some of the ideas, and culminating in a standing-room-only session at the Oregon Chapter of the American Planning Association annual conference a month ago.

The discussion and ideas raised at that conference, coupled with the keen interest expressed by the City and County Managers in 2016, push this initiative forward. You asked that I convene an opportunity for a continued discussion. The December 10th event is the beginning.

Please join us from 6:30 to 9:30 on Monday, December 10th.

We will meet at the Aldersgate Conference Center in Turner which is a short distance from I-5 just south of Salem. The address is:

7790 Marion Road SE

Turner OR 97392

There will be beverages and snacks, with a donation jar to help defray the costs.

At your request, there will be similar conversation events in central Oregon and in the Rogue Valley shortly after the first of the year. Details will be announced soon. Also, I will lead a conversation on these issues at the Oregon County Planning Directors Association annual conference in Eugene.

Please join us if you can.

Please come to these conversations brimming with ideas. Bring your associates as well as interested elected and appointed officials. Pass this email on to others. The questions which will guide our conversation are:

Are reforms needed and to what end?

  • What is the possibility of actually seeing needed reforms come to pass?
  • What will it take?
  • What happens if we do nothing?

There were white papers created after the OCCMA and OAPA conferences summarizing the discussions. Please let me know if you wish to have copies emailed to you. And, please let me know if you have questions or other ideas.

Thanks in advance for your help with this critical conversation.

John

John N Morgan

MorganCPS Group
Consultants in Community and Organizational Development
1308 Marigold St NE
Keizer OR 97303
503-304-9401
 

From the Daily Journal of Commerce Portland.

Almost without public attention, the United States Supreme Court has taken up out of Pennsylvania a significant takings case – one that may revolutionize land use law for years to come.

Since 1985, the Supreme Court has generally barred federal courts from considering claims for just compensation for government takings of private property arising at the state and local levels until after state courts have weighed in. Almost always, however, a failure to succeed at the state level has also resulted in federal courts declining to grant relief as well. Property rights advocates have long sought the means to have federal courts hear more of these takings claims directly without first seeking state court review. And with this most recent case, they might succeed.

The case, Knick v. Township of Scott, involves a local government’s attempt to deal with the protection of archaeological resources. Noting a great number of “home burials” since colonial times and desiring public access to grave sites, the township passed an ordinance requiring public and private cemeteries to be open to the public during daylight hours.

A township inspector then asserted that one or more private grave sites existed on Rose Mary Knick’s property, although there was no evidence of the same, and that town personnel and the public could visit that alleged grave site by traveling over Knick’s private property. The inspector threatened penalties under the ordinance if Knick obstructed access to the asserted grave site area.

Knick filed takings claims against the township in state and federal courts, but this case only involves the federal action. Under a 1985 Supreme Court case, Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City, a takings claimant could not proceed directly in a federal court. The claimant was required to “ripen” her claim in two ways. The first was by obtaining a “final” decision from the state or local government. This means that if there are any remedies available to reduce the scope of the claim (think of seeking a variance to zoning requirements that inordinately increase the costs of development), the claimant must seek that relief (and the failure to do so may be fatal to the claim). This step was not at issue in Knick v. Township of Scott.

But the second step, which requires a claimant to seek resolution of federal takings claims in state courts, was at issue. In this case, Knick’s federal case was dismissed because she did not complete her state court takings claim. Unlike the typical takings claims that arises from action on a permit and requires governmental action, Knick v. Township of Scott involves a “facial” takings claim that asserts that an ordinance or regulation is unconstitutional in all of its applications. Lower federal courts have split on whether this type of claim must first be heard by a state court, and the Supreme Court has determined to resolve this conflict.

There were several theories under which this claim might proceed. The township required access to the alleged grave sites over Knick’s private property and a “physical taking” claim (in the nature of trespass) could be advanced by the allegedly unconstitutional obligation that Knick open her property to the world. Also, Knick could claim a “facial” taking, that the access obligation on its face was unconstitutional and should be invalidated immediately. Either of these challenges to Williamson County would be a significant departure from the existing practice. But it may be that the Supreme Court goes further and reconsiders whether it is appropriate to limit federal takings claims to those previously decided in state courts.

Property rights advocates often dislike going to state courts first. If they lose the federal claims in state courts, the notion of collateral estoppel (that you can’t take two bites at the apple) almost always terminates the federal claim. Even if the takings claim is raised only under a state’s constitution, a loss here will likely also result in a loss of a federal takings claim, because the facts are the same and most states interpret their state constitutional provisions on takings consistent with the federal takings clause, so the two-bites-of-the-apple rule also applies.

Local governments, and their insurance companies, may not have helped their cause by taking advantage of a practice called “removal,” in which a municipal defendant may seek to have a case involving a federal takings claim brought in state court “removed” to federal court, followed by a Motion to Dismiss by the defendant because the case was not “ripe” in that there was no state court resolution of the claim. Some federal courts have denied the Motion to Dismiss because it reeks of game-playing. Nevertheless, the resultant effects on costs, time and uncertainty have discouraged takings claims from being litigated.

The Supreme Court has several choices to dispose of Knick v. Township of Scott – it could keep the existing ripeness rule of Williamson County Regional Planning Commission and thus reduce the number of takings claims brought in federal courts. Or it could do away with the rule completely and open federal courts to takings litigation. Neither of these alternatives is likely. The court would not have taken this case if it did not desire a serious examination of ripeness. However, neither is it likely the court will allow a flood of federal takings claims to be brought in federal courts in the first instance.

What may happen is something in the middle. The Supreme Court could declare that facial takings claims (such as in this case where a local government authorizes a trespass) may be heard in federal courts without ripening those claims in state courts. Or it may decide that state courts may hear takings cases first if those courts have a constitutionally adequate procedure to examine those claims and continue to insist that those state courts hear those claims first, as Williamson County Regional Planning Commission now provides. The result, whatever it is, will be significant.

Edward Sullivan is a retired practitioner of land use and municipal law for more than 45 years. Contact him at esulliva@gmail.com.

Carrie Richter is an attorney specializing in land use and municipal law at Bateman Seidel. Contact her at 503-972-9903 or crichter@batemanseidel.com.

http://djcoregon.com/news/2018/10/09/op-ed-important-takings-case-ends-up-before-u-s-supreme-court/

A plan to allow 20-acre rural home sites on 22,500 acres of farm and forestland in Oregon’s Douglas County has been withdrawn, though perhaps only

Capital Press story

Oregon’s Douglas County has withdrawn its plan to allow more rural housing on 22,500 acres of farm and forest land, though it’s likely to be revived.

Earlier this year, the county decided to allow 20-acre home sites on properties deemed of marginal value for agriculture or forestry within two miles of certain cities and rural communities.

The change was challenged before Oregon’s Land Use Board of Appeals by two state agencies — the Department of Land Conservation and Development and the Department of Fish and Wildlife — as well as the 1,000 Friends of Oregon conservation group.

Douglas County has now notified LUBA that it’s withdrawing the amendment to its comprehensive land use plan for reconsideration.

Joshua Shaklee, the county’s planning manager, said there were some “potential procedural defects” in adopting the change that may have convinced LUBA to remand the decision.

The county expects to “take another crack at it” after resolving any possible issues, which are now being reviewed by a law firm, but it’s unclear how long the process will take, he said.

“I’d describe it as a setback but not anything definitive,” Shaklee said.

Meriel Darzen, staff attorney for 1,000 Friends of Oregon, said the organization is hopeful the county will accept more citizen involvement in formulating a plan.

The final version of the plan was adopted after the opportunity for public comments had ended, which caused concerns about residents being able to weigh in on the change, she said.

“We’re hoping the withdrawal recognizes there needs to be more public process with this decision,” Darzen said.

The county has 90 days to resubmit the decision or otherwise report to LUBA, she said. If it decides to restart the decision-making process altogether, the eventual plan can still be appealed to LUBA at a later time.

According to the county, only about 25 percent of the acreage available for new homes sites under the plan would have actually been developed, resulting in about 375 housing parcels.

The final acreage was scaled down from 35,000 acres in the original proposal, which represented about 1 percent of the county’s farm and forest land.

However, critics said the county set too high a standard for commercially productive land, effectively opening the way for development of property that could profitably be used for grazing and logging.

The plan was also criticized for potentially complicating the expansion of “urban grown boundaries” around communities, since the 20-acre parcels would be harder to consolidate and develop than larger tracts.