Secondary dwellings on forestlands in Oregon would ease generational transitions, according to a proposal by family forestland owners.

Mateusz Perkowski Capital Press

Small forestland owners want the Oregon Board of Forestry to endorse a proposal to allow new dwellings on forestland for relatives of aging operators.

Half the owners of Oregon’s family forests are 65 years or older, but unlike the aging population of the state’s farmers, they can’t build secondary homes on their property, said Bonnie Shumaker, a Washington County landowner.

“The upcoming issue of inter-generational change is huge,” she said during a July 24 board meeting in Salem, Ore.

Shumaker serves on the Committee for Family Forestlands that makes recommendations to the Oregon Board of Forestry, which oversees forest management policies and regulations.

The committee hopes to win the board’s support for a “legislative concept” in 2019 that would allow secondary dwellings to be built on the same parcel of forest resource land.

Oregon’s statewide land use law has successfully retained 98 percent of the state’s forests since being enacted 45 years ago but family forestland operators face difficulty maintaining their properties as they age, Shumaker said.

Allowing relatives to inhabit a secondary dwelling would provide forest operators with needed assistance, she said. Meanwhile, younger family members could learn about managing the property while still pursuing a career.

“Not having an option to live on the land remains an obstacle,” Shumaker said.

While the development of forests along the “wildland-urban interface” is a concern, the legislative proposal would address the issue by only allowing secondary dwellings on the same parcel, without subdividing the land.

The secondary dwelling would have to pass “fire safe” regulations and would only be allowed on property that already qualifies for a dwelling.

There’s also discussion of establishing a minimum lot size that would be eligible for secondary dwellings, most likely 80 to 160 acres, Shumaker said.

“I’m a proponent of land use. We need land use but we need it to be common sense,” she said.

Farmers have long been allowed to have secondary dwellings under Oregon land use law, likely due to their day-to-day involvement in agriculture, she said.

It’s possible family foresters didn’t push hard enough to overcome the perception that forest work is more sporadic, Shumaker said.

Having help with harvest, planting and fire suppression would actually ensure a smoother succession in areas that are prone to development, said Evan Barnes, the committee’s acting chair and a Douglas County landowner.

“It’s not meant as a development tool,” he said.

Peter Daugherty, the Oregon State Forester, encouraged the committee to approach the board for an endorsement again after refining the proposal.

“It is consistent with the goals of the Board of Forestry,” he said.

Wedding venues are generally not allowed on farmland or other resource-protected lands, but this has not stopped property owners wishing to host such events from coming up with new and creative approaches to allow such activities. A recent Land Use Board of Appeals (LUBA) decision, Central Oregon Landwatch v. Deschutes County, elevates this creativity to a whole new level and may open a door to these types of challenges elsewhere.

In 2011, a couple – the Shepherds – began using their farm dwelling and property located in land zoned for Exclusive Farm Use (EFU) and within the Metolius Winter Range (Wildlife Area – WA – Combining Zone) to conduct commercial wedding events. Such activity is not allowed on EFU lands. After the county initiated enforcement proceedings, the Shepherds obtained county approval for the wedding venue as a “private park.” On appeal, LUBA held that the Shepherds’ proposed event use did not qualify as a “private park.”

The Shepherds then created the Shepherdsfield Church and applied for approval to use their farm dwelling and property as a “church,” which is allowed as a conditional use in the county’s EFU zone but is prohibited in a WA zone. A county hearings officer granted conditional use approval for the church and interpreted the local regulations with respect to the deer winter range to allow the use. However, on appeal, LUBA held that under local regulations, churches were prohibited.

Mr. Shepherd then informed the county that unless it amended the code to remove the prohibition on churches, he would sue the county under the Religious Land Use and Institutionalized Persons Act (RLUIPA), which provides certain protections for religious uses from land use limitations that impose a substantial burden or place religious uses on less than equal terms with non-religious uses.

Shortly thereafter, the county initiated a code amendment that would eliminate the prohibition, varying from the existing protections for deer and elk grazing land, a protected Goal 5 resource. The statewide administrative rules require that, in order to make that change, the county conduct an analysis of the Economic, Social, Environmental and Energy (ESEE) consequences of allowing, limiting or prohibiting uses that may conflict. Based on this analysis, the county must then determine whether to prohibit or allow the conflicting use at some degree.

The Board of County Commissioners decided to approve the code amendments to eliminate the prohibition of churches in the WA zone. In discussing the economic consequences of allowing churches as part of its ESEE analysis, the county concluded that “permitting churches alleviates the risk that the county will be required to expend resources defending an unnecessary RLUIPA lawsuit.”

On appeal to LUBA, the petitioner argued that the county could not use the risk of expending resources for a hypothetical RLUIPA lawsuit as a basis to allow conflicting uses, particularly when it provided no analysis that indicating that the existing regulations violated RLUIPA. The county responded that the potential financial risk was too high, even if it prevailed in a RLUIPA suit. The county went on to explain that, even without the hypothetical risk of a RLUIPA claim, the social benefits realized by encouraging the provision of churches could, on its own, justify allowing the conflicting use.

In response, LUBA initially agreed with the county that local governments have discretion to consider a broad range of impacts on a resource site that could include legal conflicts. However, LUBA also said that the threat of such lawsuit was insufficient. Rather, the county must evaluate the claim and determine that its existing Goal 5 program was “vulnerable to a legal challenge.” LUBA explained that without such analysis, it is unable to provide any meaningful review.

The petitioner argued that the county had other alternatives short of allowing churches in the WA zone to eliminate the alleged RLUIPA vulnerabilities such as prohibiting all assembly uses, as the county planning commission had concluded. LUBA disagreed that Goal 5 requires a local government to select the least impactful solution and may choose – so long as the county explains why measures to protect the Goal 5 resources “to some extent” should not be provided.

Finally, the petitioner argued that the county’s findings regarding the social benefits went beyond protecting the free exercise of religion, and instead violated the Establishment Clause of the First Amendment of the U.S. Constitution by expressing governmental preference for religious land uses over secular uses. For example, the county found that “religion provides the moral foundation of self-reliance and community awareness necessary for the success of a republican self-government.” LUBA did not decide this issue, but observed that under the county’s amendments, churches were allowed, but community centers were not.

These holdings on remand or in other contexts could lead to some interesting results. First, in order to use the threat of a lawsuit as an economic consequence, the county would have to essentially admit there was a RLUIPA problem in the first instance. This would be a risky proposition, given that RLUIPA allows a successful claimant recovery attorney fees.

Second, although RLUIPA does prioritize religious uses over secular uses, LUBA’s suggestion that there is a point where these protections may go too far could result to challenges to church authorizations on lands that are not extended to other non-religious gathering uses as well. What is the most certain is that more LUBA decisions considering the Shepherdsfield Church will be forthcoming.

The Oregon Court of Appeals has ruled farmland dwellings can be rebuilt even if they were demolished more than five years ago, reversing a previous legal decision.

Dwellings can be rebuilt on Oregon farmland regardless of when the original structures were destroyed or removed, according to the Oregon Court of Appeals.

The ruling overturns an earlier interpretation of state law by Oregon’s Land Use Board of Appeals, which held that dwellings can only be rebuilt if they were subject to property taxes within the past five years.

Landwatch Lane County, a farmland preservation group, argues thats the Oregon Court of Appeals has misconstrued the pertinent land use statute, creating an “end run” around the state planning goal of preserving farmland.

“I would call it devastating for Oregon farmland,” said Lauri Segel-Vaccher, the group’s legal analyst.

Long-lost homes could be rebuilt on farmland regardless of soil quality and with uncertain proof they existed in the first place, she said.

Counties are often “lackadaisical” in protecting farm and forestland, so they may require only scant evidence of a dwelling’s location, Segel-Vaccher said.

“Anybody could come up with a photograph or a diary entry from the 1800s,” she said.

Landwatch Lane County hasn’t yet decided whether to challenge the decision before the Oregon Supreme Court, Segel-Vaccher said.

Oregonians In Action, a property rights group, believes state lawmakers were “fully informed” of the effect their revisions would have on the applicable land use statute in 2013.

“The whole purpose of the bill was to allow property owners to replace dwellings that had been removed, in some cases, decades earlier,” said Dave Hunnicutt, the group’s executive director.

The notion that a significant number of homes will be built as a result is “silly” because landowners must still demonstrate the existence of a dwelling, he said.

“Most rural land is on parcels that have never had farm dwellings,” said Hunnicutt.

The legal dispute over replacement farmland dwellings stems from the case of landowner who sought to rebuild three houses on 100 acres of farmland near Florence, Ore., that were torn down more than two decades ago.

Lane County officials permitted the construction based on a 2013 bill that eased the replacement process for dilapidated or demolished farm dwellings.

However, the county’s decision was reversed last year by the Land Use Board of Appeals, which found the dwelling replacement provision is “somewhat ambiguous” but only applies to a five-year “look back” period during which property taxes were imposed.

The Court of Appeals has disagreed with that understanding, ruling that it’s “logical to conclude that the legislature intended to excuse demolished dwellings from the taxation requirement altogether.”

Oregon’s Douglas County has approved a scaled-back plan to allow more rural housing on land currently zoned for farm and forest uses.

The change to the county’s comprehensive land use plan would allow 20-acre home sites to be carved out from 22,500 acres in mixed farm-forest zones, down from the originally proposed 35,000 acres.

It’s unlikely the full 22,500 acres will ever be developed due to limitations on water availability, appropriate septic tank sites and landowner consent to sell or divide property, said Keith Cubic, the county’s planning director.

The most likely scenario would be 25 percent utilization of the available acreage, creating 375 new housing parcels, said Cubic.

Even so, Cubic acknowledges the county’s experiment with the “rural open space” designation is a test case for Oregon.

The county has tried to resolve concerns raised by Oregon’s Department of Land Conservation and Development, which administers the statewide land use planning system, he said.

“I don’t know if we got there,” Cubic said. “We’ll find that out.”

Douglas County will soon formally submit the “rural open space” plan amendment to DLCD for review, then wait until April 21 before rezoning any properties under the new designation.

If the agency or another party objects to the change before Oregon’s Land Use Board of Appeals, proposed zone changes will be put on hold until the challenge is resolved.

A remand from LUBA requiring modifications to the “rural open space” designation could provide a helpful interpretation of the law and make the plan amendment more successful, Cubic said.

In comments submitted on the proposal last year, DLCD worried the county had too narrowly defined agricultural land and set an excessively high productivity standard for livestock and forest land to be protected under the plan.

It’s unclear whether the plan considered the environmental and wildlife benefits of lower-productivity soils, the agency said.

According to DLCD, the county “loosely” concluded that development in rural areas would be economically positive, creating a “discrepancy” with studies that found that added service costs may outweigh any benefits.

The plan refers to accommodating demand for rural housing, which isn’t required under statewide planning goals and may be in “direct conflict” with some of them, the agency said.

Due to these and other concerns, DLCD said the proposal “is not consistent with state statutes and rules.”

Cubic of Douglas County said the revised plan used additional data overlays that exclude higher-quality farm and forestland from acreage available for 20-acre parcels.

Eligible “rural open space” parcels must be within two miles of existing cities and unincorporated rural communities.

However, three towns were disqualified due to the high proportion of surrounding farm and forest zones, inadequate road access, habitat concerns and other issues, he said.

The plan change is also expected to increase housing availability within existing “urban growth boundaries” due to people moving from cities to the rural parcels, Cubic said. “It does provide some rural housing opportunities.”

While the county can approve larger zone changes, most re-designations will occur after requests from individual landowners, he said.

The county didn’t shift all available 22,500 acres into the “rural open space” designation to avoid raising expectations in the event the plan is challenged, he said.

Aside from DLCD, the conservation group 1,000 Friends of Oregon has also been apprehensive about aspects of Douglas County’s proposal.

Greg Holmes, the group’s food systems program director, said he doesn’t yet have the basis to comment on the plan because he hasn’t seen the final adopted version.

Holmes said the public wasn’t able to review details of the revised plan before it was approved, making for a “very opaque process.”

The popularity of a remote Oregon brewery has caused it to run into problems with state zoning restrictions for agritourism activities on farmland.

Located along a rural road between Coburg and Harrisburg, Agrarian Ales has operated for nearly six years under an on-farm processing permit from Lane County.

All the hops needed for its “farmhouse brews” are grown on the property, as are about 50 other crops.

Initially, the rural brewery only intended to give out four-ounce samples and sell to-go “growlers” of beer, but it soon became apparent that visitors wanted to linger and imbibe on-site.

“We bring the urban public out to farm country to enjoy the beauty,” said Stephen Harrell, the company’s farm manager. “Our business grew because the public demonstrated there was a need.”

Roughly 95 percent of the company’s revenues are now derived from its tasting room, which consists of tables and benches beneath the brewery’s roof overhang.

To allow people to drink alcohol, Agrarian Ales obtained a permit from the Oregon Liquor Control Commission that stipulated food must also be served at the facility.

The brewery’s evolution into a destination for food, drink and live music has now brought it into conflict with officials from Lane County, who say these activities exceed what’s allowed in the “exclusive farm use” zone.

In late February, the county shut down the brewery’s tasting room — apart from land use issues, officials cited safety problems at the facility because it’s not designed for public occupancy.

Agrarian Ales may not be able to continue operating due to the regulatory action, as its off-site beer sales are still in their “infancy,” Harrell said.

“It threatens the very existence of our business,” he said.

Lane County has issued a statement that it “hopes to find a way to help a beloved and thriving rural business operate” while protecting public safety and meeting Oregon’s zoning rules for farmland.

Another popular rural brewery — the Chatoe Rogue in Polk County — is able to serve food and beer under a special permit for a commercial activity in conjunction with farm use.

That permit was approved because the tasting room promotes hops cultivated on the farm, said Austin McGuigan, director of Polk County’s planning division.

Harrell said his company has tried to obtain such a special permit from Lane County without success. According to the county, the applications submitted by Agrarian Ales were incomplete.

The building code issues present another problem for the brewery.

“If there is no path forward on the land use, it’s pointless for us to upgrade our building,” said Harrell.

Landowners can disagree that a permit application is incomplete and force a county government to make a decision, though the decision typically won’t go in their favor, said Bill Kabeiseman, a land use attorney with the Bateman Seidel law firm.

It’s generally difficult to win approval for food service under a permit for commercial use in conjunction with agriculture, he said.

“There tends to be a strong reaction to people selling prepared food on farmland,” Kabeiseman said. “That’s historically been a problem.”

While it’s permissible to sell farm products on-site as part of a “farm stand,” such structures can’t be used for “banquets, public gatherings and public entertainment” under Lane County code.

Farms stands can sell agricultural products and hold a limited number events per year under Oregon land use law, but they can’t become the equivalent of food-serving establishments with regular schedules, said Jim Johnson, land use specialist with the Oregon Department of Agriculture.

“It’s really the next step of having a restaurant or a major tasting facility that’s been problematic in some areas,” said Johnson, noting that increased tourist traffic can impede farm machinery and create other issues.

Wineries and cideries in Oregon have carved out special provisions in Oregon law allowing for additional agritourism activities, said Dave Hunnicutt, executive director of the Oregonians in Action property rights group.

If a county government can’t fit an on-farm business within the parameters of what’s allowable in an EFU zone, it can stop the activity unless the legislature changes the statute, he said.

It is possible breweries may push lawmakers to provide them with similar treatment as their wine- and cider-making counterparts, Hunnicutt said. “I would suspect the next session this issue is going to be dealt with.”

Michael Robinson

Forty years ago, municipal and county zoning and land-use ordinances could be captured on just a few sheets of paper. Today, page counts number in the hundreds, and the list of codes, rules and regulations seems to expand after every city council, town hall or state-agency meeting. Permitting timelines are getting longer (despite numerous requirements that decisions be made within a specific period), and the expenses associated with regulatory compliance account for an increasing percentage of the cost of a new home, office building or shopping center.

Despite ongoing calls to simplify the rules, procedures and laws surrounding land use, even the most optimistic real estate and legal professionals among us know that things are likely to become more – rather than less – tangled in the future. Since time equals money earned or spent (plus opportunities won or lost), what can real estate developers, builders and investors do to streamline the process?

In the face of this somewhat insurmountable wall of complexity, perhaps the best advice comes in the form of a well-known proverb: “Physician, heal thyself.” In other words, focus on those things that are within your control.

One of the best ways to streamline zoning, permitting, entitlement and approval processes is to develop good working relationships with government officials. You can’t buy trust, but you can earn confidence and respect by interacting fairly and honestly with people at every level of the regulatory system. It’s simple human nature: the people sitting across from you at the negotiating table or the public hearing are more likely to work with you, rather than against you, if you’ve demonstrated credibility and a willingness to engage in discussions that lead to resolution. While there are no guarantees, there is a higher likelihood that you’ll be able to move the ball down the field when the defense isn’t so … defensive. Put even more bluntly, you want people to pick up the phone when you call, not send you directly to voicemail.

Engage the services of effective legal counsel and consultants who know government policy and processes inside and out. Such experts can help you avoid costly and time-consuming mistakes. Of course, don’t forget the advice in the previous paragraph: in addition to know-how, look for professionals who’ve cultivated the same positive relationships with agency officials that you’re seeking to develop and sustain.

Increase your involvement in policy development and determining the economic future of your community. This is more of a long game, but you have a voice and you should use it. Attend public meetings and hearings; join industry, trade and advocacy groups; and make sure that legislative and regulatory officials truly understand the impact of their decisions on your business and the communities within which you work. Most people want their towns and cities to grow and prosper, but unless all sides of an issue are heard, it’s possible for even the most well-intentioned proposals to have unforeseen consequences.

Housing affordability and security, for example, is an area in which most people are trying to do the right thing. Strong cities and towns depend on and benefit from the contributions of individuals and families from across the economic spectrum. Housing options and prices should reflect this diversity – we’ve seen the challenges facing cities where rents, particularly those in neighborhoods closest to economic centers, are unaffordable for a significant portion of the workforce.

Finally, look to your own organization. Is your company organized to work as efficiently as possible? Do you have the right people in the right jobs? Do your internal processes mean that you’re always ready for the next step, or are you consistently behind the curve? Ask yourself hard, challenging questions and be prepared to take action once you know the answers.

Taken together, these efforts may not slow the expansion or complexity of land-use regulations. They can, however, help your business achieve greater efficiencies at every step of the land-development process.

Michael Robinson is a real estate and construction lawyer for Schwabe, Williamson & Wyatt. Contact him at 503-796-3756 or

This view of cities and its corresponding view of human nature will no doubt strike some readers as quaint. But lest we dismiss it hastily, consider some problematic conditions of present-day cities and their adjacent suburban and rural landscapes. Consider also the mostly young people who bear the brunt of these problematic conditions, symptoms of two interrelated and problematic phenomena. One is the seventy-year experiment to physically reorganize human settlements around the automobile—a cultural aspiration and legal regime known as suburban sprawl.2 The other, beginning in the 1980s, is the rise of global cities,3 characterized as such by their attraction to and dependence upon a “creative class” of people with expertise in accounting, advertising, banking, information technology, and law, qualifications making them especially well suited to participate and flourish in, and to enable, the new and growing global economy.

The aesthetic, economic, environmental, and social failures of sprawl are well elucidated in the writings of neo-traditional urbanism advocates, such as Strong Towns and the Congress for the New Urbanism (CNU). But what has become most striking about the rise of certain global cities is the growing importance of location and a corresponding boom in the value of urban land. Urban land is a finite commodity, and the rise in land value has made these increasingly elite cities unaffordable not only for the poor, but also for the middle class. Indeed, it is one of the causes of a shrinking urban middle class. This explosion in urban land value is even more important than the “end of distance” that some anticipated social media would enable.

This urgency has prompted renewed interest in Henry George, the nineteenth-century political economist and land reformer, and specifically in the idea and merits of land value taxation and some possible forms in which a land value tax (LVT) might be implemented. One of these forms entails a marriage between an LVT and a New Urbanist idea called transect-based zoning. Though I hope to indicate the possible fecundity of that union, such an approach to an LVT is neither the most common nor the most obvious. I intend to describe other possible approaches as well, all with both the modesty that follows from not being a member of the economists’ guild, and the impertinence of one who thinks some subjects are of sufficient import that they should not be left uncritically to experts. Because consideration of land use in so much of the modern world occurs in the legal and cultural context of suburban sprawl and hypermodernist urbanism,4 I want to begin with the idea of transect-based zoning before moving on to Henry George and the land value tax.

Transect-Based Zoning

Transect-based zoning (aka form-based codes or FBCs) is a New Urbanist idea conceived as an alternative to currently normative use-based zoning, which first emerged in the United States in the early part of the twentieth century. Use-based zoning came into being for reasons good and bad. In part it responded to the early effects of the industrial revolution on premodern cities: large factories, noxious emissions, rapid population growth, physically overtaxed road, water, and sewer infrastructure, and so forth. On the other hand, it was a naïve application of modern utilitarian rationality (“form follows function”) and also partly used as an agent of social control—a tool for powerful interests to keep “undesirable elements,” usually black people, in their “proper place” by means of exclusionary zoning of lot sizes and housing types.

Use-based zoning’s characteristic effect, however, especially as it developed in post-1945 automobile suburbs, is indicated by its name. Various activities of quotidian human life—home, work, school, shopping, worship, recreation—were organized into separate zones, typically accessible only by car.

As New Urbanists5 began studying in earnest the pre-1945 town and city neighborhoods that antedate suburban sprawl, they began to notice and document several distinguishing features of traditional urban form:

  • A mix of daily and weekly activities within pedestrian proximity (typically a 5–10 minute walk);
  • Durable buildings, the uses of which would often change over time (consider typical pre-1945 residential and commercial buildings that have been put to a wide variety of uses since their original construction);
  • A spatial environment of public streets and squares defined by an ordered arrangement of buildings sited on or relatively close to their front property lines;
  • A building hierarchy divided roughly between plentiful and common residential and commercial background building types, and singular and more monumental civic and religious foreground building types;
  • The use of streets for parking, and a rarity of town and neighborhood surface parking lots; and
  • A gradient of urban building and population densities.

However, when New Urbanists set out in the 1980s and ’90s to work with residential real estate developers on walkable, mixed-use settlements, it quickly became apparent that existing zoning ordinances—indeed, existing sprawl culture, including bank lending practices, federal housing programs, state Department of Transportation regulations, and a host of other institutional conventions—would not allow it. And so New Urbanists set out to change these institutional practices, beginning with changing use-based zoning ordinances in order to level the legal playing field for developers wanting to make walkable, mixed-use settlements. The new zoning ordinance type that New Urbanists invented was the transect-based code.

The idea of a transect is derived from late nineteenth-century geographers, who first employed it to depict gradients in a natural environment. The New Urbanist insight was to extend the idea of a natural transect to depict a rural-to-urbangradient, and to recognize its potential as the basis for a different kind of zoning ordinance. A common New Urbanist transect diagram pragmatically divides an ideal world (i.e., one with no suburban sprawl) into realms of rural and urban, and then depicts a gradation of urban transect zones, ranging from less dense to more dense. The diagram itself then becomes the basis for a different kind of zoning code that zones not on the basis of building use (where what is not permitted is forbidden), but rather on the basis of building type and density (where what is not forbidden is permitted).

New Urbanists have had significant success in getting transect-based codes adopted, not only for greenfield site developments prior to the 2008 housing crash, but also as exclusive or overlay codes in some major U.S. cities, including Denver, Miami, Cincinnati, and Nashville. The results of all this New Urbanist effort, particularly the greenfield projects, is sometimes dismissed as “just a prettier form of sprawl.” But New Urbanist greenfield developments have always existed side by side with less well-publicized urban infill efforts, which have increased in both number and emphasis since 2008. Further, the alternative to a mixed-use New Urbanist greenfield development is generally a single-use sprawl development occupying considerably more rural land. And if the adoption of transect-based codes by major cities has not (yet) led to an urban renaissance, there is the deeper problem that the culture of traditional urbanism and architecture was lost for at least two generations over the course of the twentieth century. A renaissance of good urban building and good urban culture is a slow boring of hard boards, and likely a long-term cultural project.

There is at least one conspicuous aporia, however, in common New Urbanist polemics, and it has to do with land valueand its implications. New Urbanists market themselves to both developers and public officials with the true claim that good urban design creates economic value. Moreover, the Charter of the New Urbanism professes that the traditional towns and city neighborhoods they champion should be just and economically diverse environments, with housing affordability across class lines; and that this goal can be achieved by promoting a variety of urban housing types in addition to the single-family detached house. These might include the granny flat or coach house ancillary dwelling unit, the apartment above the store, the attached single-family row house, the bungalow court, the duplex, the two-flat, the triple-decker, the six-flat, the corner lot twelve-flat, and the U-court apartment building. New Urbanists have come to characterize these housing types as “missing middle housing, by which they mean older urban housing types now generally absent from a spectrum that once included the detached single family house at one end and the mid-rise urban apartment building at the other. The New Urbanist argument has been that provision of missing middle housing in quantity can be facilitated by transect-based zoning that makes such housing legal as of right; and that this increased housing diversity and quantity will increase both affordability and the population density needed to support pedestrian proximity to urban advantages, like neighborhood schools, parks, storefronts, and public transit.

However good this seems in theory, anyone paying attention knows that the rent for a four-hundred-square-foot coach house in San Francisco (or even in Seaside, Florida) is and for the foreseeable future will be well beyond the reach of most middle-class Americans. And here the New Urbanist narrative fails to account for how much the affordability of housing depends upon the value of the unimproved land on which it sits. Furthermore, under our current property tax regime, housing affordability itself is undermined by the value that New Urbanist designs create insofar as good urban design encourages speculation in land. Thus, ironically, New Urbanists too are complicit in long-standing American practices that resulted first in suburban sprawl and subsequently in the affordability crisis of contemporary global cities. Land value plays an increasingly central role in the financial speculation connected to these crises. Hence the growing recognition that to get genuine housing diversity at more affordable prices in desirable towns and cities—and to encourage better urbanism in less popular towns and cities—it is necessary to take land speculation out of the development equation. And this is the source of today’s renewed interest in Henry George and the land value tax.

Land Value Taxation

Land value taxation is an idea with practical roots in English common law,6 but the origins of land value tax theory can be found in the classical economists Adam Smith, David Ricardo, and John Stuart Mill.7 Today, however, the land value tax is commonly associated with the late nineteenth-century American social theorist Henry George. Renowned in his day, George was later overshadowed both by his British predecessors and by twentieth-century economists, including such rock stars as John Maynard Keynes and F. A. Hayek. Henry George was thus largely forgotten over the course of the twentieth century. Indeed, he became something of a cult figure, and his land value tax policy prescriptions (also known as the single tax theory) correspondingly marginalized.

Nevertheless, Georgist theory was quite popular in the late nineteenth century. George’s 1879 book Progress and Poverty sold three million copies, and in 1886, he narrowly missed being elected mayor of New York. More than one hundred thousand people paid respects at his funeral in 1897.

Variations of a land value tax have been successfully adopted for various periods of time in several parts of the world, including Singapore, Hong Kong, Japan, South Korea, Taiwan, Denmark, Estonia, Pittsburgh and Harrisburg, Pennsylvania, and (in the immediate aftermath of the 1906 earthquake) San Francisco. And Georgism has remained popular among some important social theorists and economists of strikingly different political persuasions—from Winston Churchill, William F. Buckley Jr., and Milton Friedman on the right to Bertrand Russell, John Dewey, Paul Krugman, and Michael Kinsley on the left. Today, systemic wealth inequality and its social disruptions are growing more similar to the late nineteenth-century inequalities that originally inspired his single tax theory. Contemporary progressives like the land value tax because it effectively socializes land. Contemporary fiscal conservatives like the LVT because it eliminates (or at least reduces) other taxes, and because it both incentivizes and rewards productive economic activity. The difficulties with the LVT both then and now seem always to be with the politics and scale of its implementation.8

The basic assumptions and features of a land value tax begin from the Georgist definition of land and unimproved land value, which I present below, along with a table differentiating a conventional property tax (levied on both land and buildings) from a land value tax (levied upon land alone).

Land refers to the entire material universe outside of human beings and the things human beings produce. In addition to the ground itself, land includes all natural resources, materials, airwaves, air, soil, minerals, and water. All things freely supplied by nature and not made by man can be categorized as land.9

Unimproved land value is the dollar-amount-worth of a piece of ground and/or its land without any buildings or improvements on it. Value is typically calculated based on its location and comparable vacant land sales.

The primary difference between a conventional property tax and a land value tax is shown in the following table, which depicts two different methods of raising $5,000 of tax revenue from a block divided into two parcels of land. The top section illustrates an example of how taxes are collected on property evaluated as the sum of the value of the land plus the value of any buildings. A vacant parcel is assessed at $100,000, and the owner is taxed $1,000 (or 1 percent of the assessed property value); a parcel with buildings on it is assessed at $400,000 ($100,000 for land and $300,000 for buildings), and the owner is taxed $4,000, or the same 1 percent tax rate on assessed property value, raising a total of $5,000 in tax revenue from the two parcels.

The bottom section illustrates an example of how taxes would be collected on the unimproved land value of each parcel irrespective of any buildings on it. Both parcels (vacant and/or occupied) are assessed land values of $100,000 each, and their owners are taxed $2,500 each, or a tax rate of 2.5 percent of the assessed unimproved land value. In this way, the same total of $5,000 in tax revenue is raised from the two parcels.

This table indicates some of the mechanics that differentiate a conventional property tax on land and buildings from a tax on the unimproved value of land alone; and in this example, both methods raise the same amount of tax revenue. Their implications and possible consequences for good differ significantly, however.

Georgism and the Value of Land

The two basic tenets of the Georgist single tax theory are (1) that virtually all revenues required to fund governmental programs and services can and should be raised by a tax on the unimproved value of land; and (2) that this tax should replace most, if not all, other taxes, including taxes on personal income, sales, business profits, inheritance, buildings, and any other improvements to land. According to its proponents, the implementation of a single (land value) tax regime would arrest speculation in land (in the form of land banking) and consequently mitigate real estate boom-and-bust cycles; justly reward the work of both labor and capital; stabilize modern economies; result in more affordable and (in the long run) higher quality housing; remove major obstacles to the economic ascent of the poor (notably unaffordable housing and regressive taxes on income and consumer purchases); help restore (and expand) the middle class; and usher in a broad and sustainable reign of economic prosperity. So goes the Georgist narrative. What observations and assumptions inform it? Here are three:

(1) Land is properly differentiated from private property. Human beings have rights of ownership to what we produce and improve and exchange (i.e., private property). But we do not have rights of ownership to natural resources that no human being produced, resources that come from nature and are, in fact, common goods (e.g., air, water, land, mineral resources—the resources on which all human life and society depend). Therefore, though one may properly hold exclusive title to use land, this is not to be confused with ownership of land. Rather, it is an exclusive entitlement to a common patrimony authorizing the titleholder’s private and profitable use—with the proviso that the use of such a common good is properly subject to a user fee paid to the community in the form of a tax on the unimproved value of the land. Some land may be valuable as a source of precious finite minerals and taxed accordingly. For example, oil has been taxed to create both the Alaska Permanent Fund and the cash dividends distributed to its residents. And some land may be valuable and taxed accordingly by reason of beauties bestowed by nature (as owners of beachfront property will attest).10 In most instances, however, the value of land is directly related to its proximity to social goods (i.e., to value created by other people). The Georgist argument is that such increases in the value of land—and in the value of land alone—are both properly subject to taxation and are the most just, rational, and efficient source of public revenues. That this is true follows from a second observation.

(2) When you tax something, you generally get less of it. Economists recognize that taxes create externalities, which can be good or bad, intended or unintended. Most of us understand intuitively that this is true, because we understand that some taxes are designed and imposed precisely to decrease certain behaviors. Such taxes include not only Pigovian taxes (after the early twentieth-century British economist Arthur Pigou) levied to recover the social cost of some private activity (e.g., environmental pollution), but even an LVT itself, which can be understood in part as a tax on unearned wealth, imposed to decrease it. There are also plain old “sin taxes” imposed to discourage things of which at least some people would like there to be less: on tobacco and sugary drinks; or, say, concrete frame construction and glass curtain walls. Our most visible taxes, however, have externalities largely hidden from public understanding. Taxes on the productive activities associated with both labor and capital all have the presumably unintended consequence of decreasing the productive effects of each—e.g., taxes on sales, on business profits and investment income, on buildings and improvements associated with property taxes, on capital gains and inheritances, even graduated taxes on income. And this leads to a third (and critical) Georgist point.

(3) A tax on land cannot diminish the quantity of land. For most of the twentieth century up to the present, neoclassical economists have regarded land as simply another form of capital. But this was not true of the eighteenth- and nineteenth-century classical economists, who recognized that land differs from both labor and capital due to its temporal and material priority, its fixed supply, and its immobility.11 Land also differs from other assets (e.g., buildings) in that it does not depreciate in value, but rather grows as the community invests in its shared infrastructure. G. K. Chesterton once quipped that, whereas God can make something from nothing, man is the being who can make something from anything. That “anything” in the first instance is land. Unimproved land is humanity’s most basic material resource, the foundation of all material wealth, required directly or indirectly for the human production of all goods and services. One can’t make any more of it; one can’t hide it in a Swiss bank account; and one can’t move it to the Cayman Islands. Labor receives wages for work, capital receives interest for investment, and land receives rent for the exclusive (monopoly) use of a location. For several reasons, then, Georgists argue that taxes on labor and capital should be eliminated in favor of a single tax on the value of unimproved land (i.e., an LVT) as the primary source of public revenues. Taxes on labor and capital diminish both, but a tax on unimproved land does not diminish the underlying resource. Meanwhile, a tax on land returns to the community either the value of some shared natural resource or the value of the land which the community itself has created; and a tax on land is an efficient and transparent method of taxation.

But is land not a form of wealth? And if a land titleholder is to be taxed for the full rental value of his or her land, what is the benefit of holding title to land? Here again, consider that, strictly speaking, land is not wealth. Rather, land—all natural resources independent of human production, which belong to everyone—is the precondition of wealth, and is to be taxed for human use; whereas wealth—the material and intellectual products of human labor, which by right belong to the laborer—is not to be taxed at all.

Why then, under a single tax regime, would anyone want to hold title to land? One would seek title to land to use it, and only to use it: to live on it, farm it, sell things on it, manufacture things on it, mine things from it, and so forth. Land speculation would be impossible because only the use of land would have economic value. In turn, though, an LVT would also benefit land titleholders who would not pay tax on improvements to their land or productive activities undertaken thereon. And why would anyone sell land? One would not sell land to make a profit from the sale (which would not be possible), but rather to relieve oneself of a tax liability. That which one cannot or will not use one cannot own save for a fee. “Ownership” of land extends no further than an entitlement to the use of land, and that which an “owner” cannot use he must pay for or “sell” to someone else. “Buying” and “selling” land under a single tax regime therefore assume slightly different meanings than in ordinary discourse because what is really transferred is a land liability equal to land value—a liability virtually no one would accept if they did not plan to use the land.12

Georgism and Modern Economics

I mentioned earlier that economists familiar with Georgist theory (which is far from all) generally do not disagree with the Georgist analysis, regardless of their political dispositions, and they acknowledge the effectiveness, simplicity, clarity, and fairness of a land value tax. Their disagreements are rather about issues such as (1) whether it is possible to adopt an LVT as a single tax on a national scale; (2) if not, whether a modified and partial LVT is desirable and possible, either for its own sake or as a transition to a single tax regime; and then finally (3) if a partial LVT is desirable, two related and properly political issues remain: the size and scope of government services, and how much tax should be levied on the value of land.

Opposition from land speculators and owners of large amounts of land has always been a predictable response to Georgist theory; and in spite of its popularity across ideological lines, sustained LVT implementation has always posed a challenge. How then, and to what extent, might some version of an LVT be implemented? And how much revenue can an LVT raise? With a proviso that I enter these waters with caution, here I offer, across a variety of scales and on behalf of agendas short-term and long, four different versions of an LVT and how each might be effectively adopted:

(1) The Full Henry George (for example, as advocated by John Médaille and Fred Foldvary13): a single tax to be paid annually, applied at the scale of the nation-state, but collected locally, replacing most if not all other taxes at federal, state, and local levels, at close-to-full taxation of the ground rent of unimproved land as set by the market. Henry George himself recommended collecting about 95 percent of the full market ground rent, with the balance remaining with the land titleholder as a kind of profit or management fee. The rental value of any particular parcel of land would be determined by comparable vacant land sales in the immediate vicinity, or by comparisons to similar parcels occupied by similar buildings in different but broadly proximate locations. Land value reassessments could occur annually, biannually, or triannually, but with the development of contemporary digital mapping tools, such as ARC-View, ARC-GIS, and more recently GAMA, land value assessment from an office desk is becoming an easier task than determining the value of land plus buildings for present-day property tax assessments.14 Also, there can be little doubt that long-distance, absentee landlords and other land speculators are themselves employing these tools for their own land-banking purposes.

Some Georgists argue that land value tax revenues would be sufficient to fund all government programs (including health care and public education), sometimes even with a surplus returned to citizens as a direct cash payment (like the Alaska Permanent Fund), and could be the basis for a de facto guaranteed national income. In thinking about an LVT in and at the scale of the United States, John Médaille estimates that the revenues from such a tax could easily replace all federal, state, and local taxes, except income transfers (welfare, Section 8 vouchers, Medicare, Social Security, etc.). The gap could be filled by some small flat or progressive income tax in the range of 5–15 percent. Médaille also suggests that because the LVT is assessed and collected locally and distributed upward to various levels of government, it would incentivize state and local decision-making.15

(2) A Halfway Covenant, so called because even though it imagines essentially the same dynamics of assessment, collection, funding of public services, and elimination of other taxes as the “Full George” above (and at the same scale), it would nevertheless collect only a portion rather than the entire rental value of land—just enough to fund the specific government services desired, a larger or smaller sum depending upon the proclivities of the electorate and the political party in power. Even if the Halfway Covenant yields sufficient funds, however, the problem remains that, by leaving some substantial portion of the rental value of land in the hands of the titleholder, it might not end land speculation, the practice of land banking, and the negative consequences that follow therefrom. A more doctrinal Georgist would probably prefer to tax closer to the full value of the land and distribute any surplus funds back to the public in the form of a cash dividend (again, like the Alaska Permanent Fund).

(3) A Local Building Tax/Land Tax Reversal: This third approach more thoroughly modifies Georgism by simply changing the conventional property tax (that assesses both land and buildings, but emphasizes the buildings) such that land is taxed at a significantly higher rate than buildings. In the United States, the most prominent example of this type of taxation is in Pittsburgh, where it has been employed off and on for over a hundred years, most recently in 1978 when land was taxed at a rate six times higher than buildings.16 The results at the time were impressive, and some of its effects remain so. Conventional property taxes penalize owners for improving their buildings by causing their taxes to rise, thus rewarding land banking and inflating real estate prices. But Pittsburgh and other places have demonstrated that when you implement an LVT, you get not a real estate price boom, but rather stable land values and a construction boom. Moreover, even after a construction boom saturates market demand, under an LVT, what remains thereafter are stable land values and more affordable housing in which the home and its activities rather than the land are the genuine source of personal wealth.

Because the land values that elsewhere fuel rising housing costs have been stabilized, when they rise, they do so only gradually, without boom and bust. Nevertheless, Pittsburgh’s embrace of this modified LVT has been fitful; that’s probably because in this approach, an LVT is not a replacement for other taxes, and is therefore more vulnerable to sabotage from land speculators and their political allies, who are naturally inclined to oppose an LVT. This indicates a problem that follows from not using an LVT to replace at least some other taxes and also some problems that follow from attempting to apply an LVT at a local rather than regional level. In order to work most effectively, an LVT requires implementation at a certain minimum scale: small enough for local oversight, but big enough to curb local land banking and speculation. An LVT would thus seem not to be most effectively applied as a kind of spot-zoning or spot-taxing experiment. As a merely local LVT takes effect, its benefits simultaneously create value on the land immediately adjacent to the LVT zone, while bringing unearned income to the owners of that adjacent land.17 This suggests that an LVT jurisdiction must be extensive enough to discourage land speculation at its immediately adjacent borders, which in turn suggests that it might work well for an island nation (as it has in places like Singapore and Taiwan); or, as I will suggest below, at the scale of a metropolitan region with abundant natural or agricultural land at its perimeter. And this brings me to my final hypothetical way of implementing an LVT:

(4) A Revenue-Neutral Regional LVT across a Transect: Returning to the idea of a rural-to-urban transect, I conclude with this last example, not to suggest it as the best arrangement everywhere, but rather as a thought experiment to address current difficulties.18 The full benefits of an LVT seem to require its application at a certain scale, and an LVT will be inefficient if the scale is too small. Unlike transect-based zoning, an LVT can’t be introduced as a “pilot project” for a small area or even a city because the success of the LVT will raise the value of adjacent (non-LVT) land, and land banking will just move to properties located “across the street,” as it were. The minimal optimal scale at which to adopt an LVT is likely at the scale of a metropolitan region that also includes a natural or agricultural landscape at its perimeter. Even though the details of land use relating to local zoning and development should arguably be under municipal or even neighborhood jurisdiction, there are some issues best administered at a regional level due to their externalities: energy policy, big-picture land use policies (related to human settlements), agricultural production, landscape preserves, major regional roads, public transportation, equitably financed public education, water treatment, and so on.

The late nineteenth-century, pre-sprawl heyday of Henry George was hardly without flaw. Nevertheless, a relatively healthy culture of land use, building, and urban design could be presumed, and therefore (perhaps) a warranted bias against the land use restrictions inhering in the nascent zoning efforts of that era. But Henry George’s historical moment is not ours. Today’s sprawl suburbs are in part a product of modern zoning. Worse than that, sprawl suburbs now embody an institutionally entrenched and enabled cultural habit, making the overthrow and replacement of single-use, sprawl zoning a necessary though insufficient condition for a renewed culture of city making. It is thus important to distinguish the purpose of transect-based zoning from the purpose of use-based zoning. Transect-based zoning is simply a tool that legalizes the lost art of town planning and urban design—neither prohibiting nor impeding, and sometimes helping—the long recovery and development of that now lost art. In contrast (and in hindsight), use-based zoning appears at best a mistake, and at worst a monumental act of hubris: that more than two generations have imagined we could radically alter the way human beings have occupied and lived on the landscape for millennia without adverse consequence to ourselves and to others.19

Effects of the Land Value Tax

What would be some immediate and predictable effects of a new LVT regime?

(1) An LVT would very quickly stabilize land values and effectively end land banking, either definitively by capturing 95–100 percent of a land parcel’s ground rent as a tax paid to the community, or virtually through the incentives created by whatever tax is charged on either the use or the sale of underused urban land.

(2) An LVT often prompts a construction boom because it incentivizes development of underused land, by means of both stick (the tax on the rental value of the land) and carrot (the absence of tax on improvements to and productive activities on the land), rewarding both the construction of new buildings and the renovation of old ones. Vacant lots acquire new buildings; shabby buildings become renovated buildings; towns and city neighborhoods get tidied up, and become more vibrant and desirable. Although these new and renovated buildings are economic assets in themselves and, over time, raise the ground rental value of the land on which they sit, that value grows only gradually, mostly on the basis of the construction quality or the renovation of the land’s occupying buildings. This is because the rental value of the land, the rapid rise of which is so devastating on young people especially, has been taken out of the building and development equation by the LVT and is now going to the community.

(3) Under an LVT, after a construction boom ends, the price of housing remains stable. Boom-and-bust housing cycles are minimized because, again, boom-and-bust housing cycles are due to the land speculation that is necessarily absent under an LVT. Likewise, when there is a demand for new construction, ground rents will rise slowly in accordance with the value of everything being built. This is because the ground rent is being taxed, and thereby taken out of the development equation.

Winners and Losers

From a political standpoint, if an LVT causes total taxes to go up for the average renter and homeowner, the LVT is dead in the water. The revenue-neutral regional LVT across a transect proposal must be particularly conscious of this problem (because of the four scenarios considered it is the one most completely designed). We are not without actual examples to consider here, however. Pittsburgh’s most recent LVT, which began in 1978, required landowners to transition from paying a standard property tax to paying a split tax that assessed the value of land at six times the value of buildings. According to Dan Sullivan, “most homeowners paid far less [in taxes] under a Land Value Tax, absentee owners tended to pay more, the very richest neighborhoods paid more, the corporate property paid more. The skyscrapers paid less, but the [owners of the lots next to them] paid more.” Every tax regime produces winners and losers, so who wins and who loses under an LVT scenario?

(1) Renters win. Renters under most LVT regimes will pay few if any taxes beyond sin taxes. Moreover, the LVT is likely to spur construction of better, more affordable, and more stable rental housing because these are the features that will give landlords advantage in the rental housing market.

(2) Most homeowners win. The majority of land-titled homeowners whose home is their major asset should expect to see their total tax liability go down, though owners of homes on larger tracts of land might see a rise in their taxes (cf. Pittsburgh). Homeowners will not profit as much (or at all) from the sale of their home beyond the value they have added to it themselves, though the upside is that, should they wish to sell and move up or down, they will find housing prices more stable everywhere under an LVT regime. And under most LVT regimes, the LVT will replace some, if not all, other taxes.

(3) Land-titled entrepreneurs, especially small ones, win big. Contrary to the Pittsburgh model cited above, land-titled entrepreneurs in an LVT regime are likely to see their total taxes go down significantly: possibly on the land itself if there are height restrictions, and if they are already using their land well; this is almost certainly a result of having to pay taxes on neither business profits, nor productive activity of any kind, nor any improvements they make to their land.

(4) Land speculators lose. Under an LVT, the taxes of landowners who are land banking, waiting to sell or develop only after adjacent parcels have been developed by others, will go up significantly. An LVT will give them a strong incentive either to develop their property or sell it to someone who will. As with everyone else under an LVT, they can profit from their labor and their capital investments; and their other taxes will diminish or disappear, but not the taxes they will pay on their (underused) land.

(5) The community wins big. Finally, the community gains a stable and durable source of revenue. Land, moreover, when taken out of the speculative market, will appreciate more gradually over time, while landowners who now will have strong incentives to build more and better buildings will not be penalized for doing so.

Making the Leap

In most cities in the United States today, housing inflation and deflation is land value inflation and deflation. Today’s prohibitively expensive global city housing and economically stressed low-density automobile suburbs are two sides of the same coin. Land banking in cities creates artificial scarcity that drives development to less expensive rural land made affordable by federally subsidized but economically unsustainable sprawl infrastructure. When land is considered capital rather than a common resource to be used, the full development potential of land is neither paid for nor rewarded. The result is what we have now: a rise in unaffordable cities and a multiplication of failing automobile exurbs.

Is a land value tax too complex to implement? Compared to what? Our current opaque system of disincentives to work and invest? Of invitations to chicanery? Of distributing unearned wealth to the land-titled, while gutting the middle class and erecting nearly insurmountable obstacles to the economic advancement of the young and the poor?

The question is not whether beautiful, convenient, and affordable cities and towns, under a simple, clear, and fair LVT regime, are impossible dreams. The question is whether we have the cultural capital, political acumen, and artistic skills to once again make such places. To be sure, important LVT details remain: “grandfather clauses” temporarily exempting elderly homeowners on fixed incomes; how best to transition from a property tax to an LVT; and the role of LVT-exempt institutions in civil society. But such details are not unresolvable.

Given my biblical view of human nature, as fallen but with the possibility of—and a trajectory toward—redemption, my hopes for a land value tax and a revival of classical humanist urbanism are genuine and substantive, though modest. Neither Georgism nor good architecture and urbanism are salvific, nor do they warrant cultish devotion. But compared to our current tax system and the social and economic distortions it engenders, an LVT would be a simpler, more transparent, more easily administered, and above all more just tax. Walkable, mixed-use towns and city neighborhoods comprising durable and beautiful buildings would realize human flourishing much better than our ubiquitous sprawl suburbs.

Perhaps the rearrangement and recovery of fundamental things, such as fairer taxes, more beautiful and well-tended landscapes, and good urbanism can only occur in the aftermath of catastrophe. Many already regard both sprawl and our current economic arrangements as catastrophic. Nevertheless, it would be a welcome development even now for New Urbanists, both political parties, and all interested citizens to embrace land value taxation as an essential nonpartisan component of good urban economy, based upon the truth of what land is. The promotion of walkable, mixed-use human settlements across a rural-to-urban transect should also be a bipartisan effort. The problems these policies can solve concern many Americans, perhaps a majority, across political lines. The solutions await their political champions.

This article originally appeared in American Affairs Volume II, Number 1 (Spring 2018): 56–75

Reposted from the Daily Journal of Commerce.

Two cases decided in the past month illustrate the scope and importance of planning law in Oregon. While neither decision is final until all appeal opportunities have been exhausted, these cases are significant regardless of their outcome.

We commented recently on a Land Use Board of Appeals (LUBA) decision that raised many eyebrows. The city of Portland listened to the environmental community and enacted an ordinance to limit the expansion of existing fossil fuel terminals and limit the size of new such terminals within the city limits. A coalition, including business and labor groups and oil company representatives, lined up to oppose the ordinance, while environmental groups supported the city. To the surprise of many observers, LUBA invalidated the ordinance, finding it violated two statewide planning goals. Some shrugged, as it appeared these deficiencies could be cured.

The surprise was that LUBA also invalidated the ordinance because it violated the “dormant commerce clause” – i.e., a negative inference that, because the Constitution allows the federal government to regulate commerce, it also denies states the power unjustifiably to discriminate against or burden the interstate flow of articles of commerce. If a state or local government unjustifiably favors in-state commercial interests over out-of-state ones, as LUBA found in this case, there is a constitutional violation and the ordinance cannot stand.

Upon review, the Oregon Court of Appeals disagreed, finding no discrimination against out-of-state exporters as opposed to in-state ones. The end result of constricting terminal capacity, which might also affect in-state users, was a matter of policy, but it was not unconstitutional. Oregon has no in-state exporters or distributors of fossil fuels in any event and, as a result, could not discriminate against them. Moreover, the ordinance recognized and allowed existing fossil fuel terminals and those necessary for distribution of those products for retail gas stations, and terminals built for distributors and wholesalers that receive and deliver fuel solely by trucks to continue.

Finally, the court said that nondiscriminatory local laws regulating commerce in an evenhanded manner to effectuate a legitimate local interest that have only “incidental” effects on interstate commerce are valid unless “the burden imposed on such commerce is clearly excessive in relation to the putative local benefits.” The local interests included public safety concerns over a fossil fuel terminal in an earthquake subduction zone, as well as climate change concerns. Moreover, the court found burden on commerce to be comparatively minimal.

The second significant case came from LUBA and dealt with a buildable lands inventory adopted by the city of Eugene to ensure sufficient residential land availability over a 20-year period to construct “needed housing.” The Home Builders Association of Lane County (HBA) claimed the city did not designate sufficient buildable lands because some of the land included in the inventory would be problematic to develop. The HBA claimed that some of the land probably could not be developed under “clear and objective conditions,” which were required to allow development of “needed housing.”

LUBA found that the inventory step required the city to include land that was “suitable, available and necessary” for residential development, even if those lands could not be developed easily or under clear and objective conditions. The city also used a calculation of land historically developed outside the clear and objective category with its actual development figures.

The case is significant because LUBA interpreted the housing laws to inventory all housing lands, then allow for discounting those lands that are constrained by applicable development regulations that reduce the number of available units, then calculate the net housing units needed over a 20-year period, and finally to plan and zone sufficient lands to meet those needs.

The HBA’s attempt to increase the amount of land needed for housing by excluding constrained (but otherwise available) lands failed. The result of this decision is to make efforts to include land fully available for needed housing a bit more contentious, a bit longer, a bit easier for supporters of housing exclusion and somewhat more discouraging for housing advocates.

As we mentioned, both decisions are appealable at the time of this writing, but both decisions have impacts. Local governments may be able to ban or limit fossil fuel plants within their boundaries, and larger cities may be able to undertake their buildable land inventories by starting with all lands available for housing. Another court may change these results or the Legislature may weigh in with other priorities, but these cases represent the law – for the moment.

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

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

An error in a 2017 land use bill would allow more “accessory dwelling units” on Oregon farmland, but lawmakers are being urged to correct the mistake this year.


Mateusz Perkowski  Capital Press

Published on February 6, 2018 3:47PM

Last changed on February 6, 2018 4:17PM

SALEM — An unintentional omission from an Oregon land use bill in 2017 has re-opened the debate over “accessory dwelling units” in rural areas this year.

Legislation aimed at easing Oregon’s affordable housing crisis, Senate Bill 1051, was approved by lawmakers during the tail end of the previous legislative session.

Under one provision of that bill, ADUs — sometimes called “granny flats” — can be built in areas zoned for detached single-family dwellings in cities with more than 2,500 residents and counties with more than 15,000 residents.

That provision was only intended to apply within “urban growth boundaries,” but that language was inadvertently dropped from the bill’s text.

Unless the mistake is corrected, the bill would allow such dwellings in rural areas outside of cities.

Critics of ADUs in rural areas argue that increasing such housing would strain existing groundwater sources, septic tanks and rural roads.

Lawmakers are now being urged to pass House Bill 4034, which would correct the earlier “scrivener’s error,” by lobbyists from organizations that don’t often agree on development issues: 1,000 Friends of Oregon, a conservation group, and the Oregon Home Builders Association.

The possibility of legislation aimed specifically at ADUs in rural areas is being discussed as part of a separate work group, said Jon Chandler, CEO of the OHBA, which usually advocates for relaxing land use restrictions.

While the problem would seem easily fixed, the situation is awkward because two lawmakers on the House Agriculture Committee — Brad Witt, D-Clatskanie, and David Brock Smith, R-Port Orford — said they weren’t aware the “urban growth boundary” provision was omitted accidentally.

During a Feb. 6 hearing before the committee, Witt said he supported the earlier legislation because he wanted to allow more accessory dwellings in rural areas and would be disappointed to see the provision changed.

“If you strike a deal, you ought to let us all know a deal has been struck,” Witt said, referring to the urban growth boundary limitation.

Representatives of the Association of Oregon Counties and the Oregon Association of Realtors urged lawmakers not to restrict ADUs to cities.

Oregon is facing a housing crisis, so additional ADUs in rural areas would increase the housing supply without spending public money, said Mike Eliason, legislative director of AOR.

The law could be changed to allow counties to choose whether to allow ADUs in rural areas or to establish standards for their development, he said.

The committee’s chair, Brian Clem, D-Salem, chastised these lobbyists for “poor judgment,” noting they might someday be disadvantaged by an error in an otherwise “good faith” compromise.

Clem said that he disagrees with exploiting the error though he’s not opposed to negotiating over ADUs in rural areas.

“I think it’s absurd the tactic that you’re using,” he said.

Supporters and opponents of the proposal both say it could set a precedent for land use in rural counties.

The rezoning effort sets up a potentially major shift in how Oregon — known for its conservative land use laws — manages a growing population.

Some rural counties complain that Oregon’s laws that protect farms and forest lands are too restrictive. If this plan in Douglas County moves forward, it could set a precedent for counties that want to build on land currently set aside for farming.

“What we are trying to do is identify a way to provide a little more flexibility to more rural jurisdictions to allow land that is of low or no value to commercial farming or forestry to be used in an alternative method,” said Douglas County Planning Director Keith Cubic.

The county analyzed the acres in question and concluded that they’re not suitable for most types of farming.

“We looked at soils, viticultural (grazing) boundaries,” Cubic said. “All of those factors were put together before they were disqualifying features.”

That’s a claim disputed by Greg Holmes, food systems programs director for 1,000 Friends Of Oregon.

“This is the type of land where our cattle and hay production happens, where our wine grapes happen, and other high-value crops to the state of Oregon happen,” Holmes said. He pointed out there’s land with similar soil types and characteristics across the state.

“It may be relatively less productive than some other lands, but if we were to suddenly take this type of land and call it non-resource land anymore and then multiply that across all the counties across the state … we’re talking about hundreds of thousands of acres of agricultural lands,” Holmes said.

Supporters and opponents of the proposal both say it could set a precedent for land use in rural counties. And other counties are watching this process carefully.

County leaders from Deschutes and Jefferson counties in central Oregon submitted letters of support for the idea to Douglas County leaders.

“Deschutes County is interested in pursuing a similar program,” reads the letter signed by the county’s three commissioners. “We recognize that a subset of resource lands are not accurately designated in our region as well.”

The plan has also attracted the attention of Oregon’s Department of Land Conservation and Development. The agency flagged a number of concerns with the proposal in a letter to Douglas County.

Douglas County commissioners could approve the plan this week. But they may also delay the decision to allow for more public input.

If the initial plan is approved by the commissioners, the idea would still need to go through a legislative process or a quasi-judicial process before the land could actually be rezoned, Cubic said. While he expressed support for Oregon’s land-use system, he believes it could be more flexible.

“There’s land that’s neither farm nor forest that is not sufficiently addressed by the statewide planning program,” Cubic said.  “So our focus is first on those lands.”