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49 affects all Oregonians

MY VIEW • Measure hurts more than current claimants
by: JIM CLARK, Like Oregon rancher Glen Carmony (above), economist Randall Pozdena thinks Measure 49 further increases land restrictions, to the detriment of the state.

Measure 49 puts a stake back in the heart of property rights in Oregon. It reverses the principle that Oregon voters asserted in passing Measure 37 — namely, that the state should not diminish the property rights of owners without full and just compensation. Measure 49 tries to conceal its gutting of Measure 37 by throwing some of the 7,500 Measure 37 claimants a bone through slight reductions in the taking of property rights. But these claimants are not the only ones at risk from Measure 49. If you have children who you hope can own property in Oregon someday, or are looking for an affordable place to live or establish a business, you have skin in the game. Renters have an especially large stake in restoring property rights — they have the least control over future housing costs. The impact of Measure 49 is so pervasive because Oregon’s land use laws raise land costs every day as market conditions evolve and collide with the rigid land use restrictions. The system has so constrained the supply of buildable sites that, in effect, a growing tax in the form of elevated land prices is levied on every new homebuyer and business. For example, according to the Washington County Assessor’s data, modest home sites today cost eight times what they did in 1990. The resulting threat to affordability endangers the stability and viability of the economy itself. The land use laws in Oregon initially appeared benign because they were not binding at the time they were first passed in the early 1970s. But the rope tightened in the 1990s, and the effects of artificial site scarcity became apparent. According to a 2005 Thoreau Institute study, Portland, Salem and Eugene, by 2000, all were in the top 10 of U.S. metro areas whose housing costs were rising faster than income. According to National Association of Home Builders data, only 25 percent of Portland homes today are within reach of median income households. As recently as 1995, nearly half of all homes were within reach. According to RealFacts data, the rental market suffered the same fate, with Portland rent growth being the eighth fastest in the nation in 2007. Contrary to the oft-heard claim that it is the desirability of the Oregon land use environment that is driving housing values, the data indicates clearly that contrived shortages of buildable land raise prices in ugly as well as beautiful places. Indeed, a 2007 Demographia survey of housing in five countries found that the consistent factor driving the affordability crisis was land supply restrictions. In that international study, the Portland housing market was ranked at the top of the “seriously unaffordable” category. Oregon need not abandon its desire to preserve iconic, pristine places and habitat. But by allowing the state to unfairly impose property takings without compensation, there is no accounting of the costs that taking imposes. Oregonians know that this is unfair, and have long supported efforts to legally purchase and preserve open space. Measure 49 seeks to continue taking, rather than paying for, private property rights in the name of an unmeasured, hypothetical public value. Like the human peonage laws of the past, property takings impoverish some at the whim of a power elite. Oregonians need to abandon the snatch-and-grab politics that underlie Measure 49. We need to return to the practice of putting our money where our mouths are to preserve Oregon’s great places. If we do otherwise, Oregon increasingly will become an unstable society of housing haves and have-nots. Portland-based consultant Randall Pozdena is author of the textbook “The Modern Economics of Housing.” He is a former research vice president of the Federal Reserve Bank of San Francisco and a former professor of economics and finance.