Oregon Land Use Law – 40 Years Of Failed Planning

On May 29, 1973, popular and iconic Republican Governor Tom McCall, famous for his environmental advocacy and anti-development rhetoric (“I urge them to come and come many, many times to enjoy the beauty of Oregon. But I also ask them, for heaven’s sake, don’t move here to live.”), signed into law Oregon’s transformational land use legislation that made virtually every land use decision subject to review by state agencies.

Oregon Senate Bill 100 required that every Oregon city and county prepare a comprehensive plan in accordance with a set of general state goals, and created the Land Conservation and Development Commission (LCDC) to oversee these plans and approve land use decisions. The original purpose of this law was to control sprawling suburban growth and industrial development in an attempt to protect the farmland of the fertile Willamette Valley. But as is so often the case, the scheme has been ineffective and has had extensive unintended consequences. The planners have failed to have a substantive effect on growth. The only things that seem to have been controlled are economic development, personal liberty and property rights.

There have been several celebrations around the state to commemorate the passage of this law, and several articles have appeared that tell the history of its passage. It is generally accepted that the urbanites of Portland love this law, while most of the rest of the state resents it.

The history of the passage of SB100 is quite interesting. The rhetoric that surrounded the debate in the late 60s and early 70s centered around class warfare and fearmongering:

Metropolitan growth was explicitly associated with the painful example of southern California. Governor Tom McCall summarized the fears of many of his constituents in January 1973, when he spoke to the Oregon legislature about the “shameless threat to our environment and to the whole quality of life—unfettered despoiling of the land” and pointed his finger at suburbanization and second home development.

The main arena in which the Oregon system has addressed social issues has been housing. Reflecting the strong interest during the 1970s in “fair share” housing policies that tried to distribute low-income housing throughout entire metropolitan areas, Goal 10 requires that jurisdictions provide “appropriate types and amounts of land . . . necessary and suitable for housing that meets the housing needs of households of all income levels.” In an early assertion of its authority, LCDC forbade the small town of Durham in Washington County to shift its entire multifamily zone to single-family. The city of Milwaukie ran into trouble by trying to set more stringent review standards for apartments than for detached houses. In 1982, the small suburban Portland municipality of Happy Valley became a test case when LCDC ordered it to plan for a substantially greater residential density than its residents desired.

Randal O’Toole, a Senior Fellow at CATO and Portland native, has spent his career examining Oregon’s land use laws and finds that, despite the lofty goals, the law has led to higher home prices, more volatility in the market and little effect on sprawling development:

First, the law made housing in Oregon unaffordable. Before the law was passed, median home prices were consistently about two times median family incomes. As Oregon cities began drawing urban-growth boundaries, prices quickly shot up to three time incomes and today stand at four times incomes.

This compares poorly to other urban areas with less burdensome land use laws – such as Oregon’s signature Urban Growth Boundary that will not allow for residential or industrial development outside the tightly defined urban area. For instance, while median Portland home prices are approximately 3.8 times as large as median incomes, Tacoma’s ratio stands at 3.2; Chicago’s ratio is 3;  and Houston’s is 2.5. All three of these markets have significantly lower median home prices and equal or higher median incomes. (All figures available from CNN Money)

So rather than bring down median home prices, as intended, this law has had a dramatically opposite effect.

But it gets worse. O’Toole continues,

… the law contributed to Oregon’s hostile business environment. Except for a few select high-tech industries that were blessed with tax breaks, most industries in the state declined. Oregon leaders decided to “diversify,” meaning become less dependent on the timber industry, but instead they became dependent on the silicon chip industry, leading to a big decline in the state’s economy with the dot-com crash. Meanwhile, home-grown companies like Hollywood Video left in anger at Oregon’s ridiculous land-use rules. One result is that, during recessions, Oregon often has the first or second highest unemployment rates in the nation … far from reducing the cost of services, the law contributed to Oregon becoming a high-tax state. Oregon’s tax burden is one of the highest in the nation, exceeded by only 11 other states (most of which also have similar land-use regulation) … Last but not least, the law trampled on people’s property rights. The 80 percent of Oregonians living in urban areas more-or-less told the 20 percent of Oregonians who live on and own about 97 percent of the private land in the state, “We’ve decided your land will be our scenic viewsheds, so you can’t develop it.”

O’Toole notes that SB100 has not had a demonstrable effect on the rate of urbanization of Oregon’s land. And this isn’t a statistic created by a right-wing think-tank – this was a conclusion reached in 1990 in a study by 1,000 Friends Of Oregon, a staunch defender of the Oregon Land Use laws that was co-founded by Gov. McCall. The study showed that under current law, by 2050 approximately 6.64% of the Willamette Valley would be urbanized. If SB100 were to be repealed, that rate of urbanization would skyrocket … to 7.64%.

So here we have legislation with the original goals of reducing housing costs, containing sprawl, protecting farm and forest land, and diversifying Oregon’s industrial base. None of these goals have been achieved, and yet we remain just as dedicated today to this Rube Goldberg legal contraption as we were 40 years ago.

And our freedoms continue to slowly slip away, in favor of centralized government planning.

John Adams once said,

“Property is surely a right of mankind as real as liberty.…The moment that the idea is admitted into society that property is not as sacred as the laws of god, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence. Property must be sacred or liberty cannot exist.”

James Madison insisted that the proper role of government was to protect private property rights:

“Government is instituted to protect property of every sort; as well as that which lies in the various rights of individuals…. this being the end of government, that alone is a just government, which impartially secures, to every man, whatever is his own.”

And Thomas Jefferson, following the teachings of John Locke, originally wrote into the Declaration of Independece the right to “Life, Liberty and Property”.

Clearly the Founders knew the importance of property rights to the ability of each individual to maintain their own individual freedom.

We could use a little of that foundational wisdom in the Pacific Northwest.