In November 2004, the Oregon voters passed Ballot Measure 37 (now codified as ORS 197.352), which allows property owners to make claims for compensation if the value of the claimant's property has been reduced by land use regulations
enacted or first enforced after the claimant (or certain family members) came into ownership. The initiative, which passed by a substantial margin, was the culmination of years of work by property rights advocates and others dissatisfied with the system of statewide land use planning that had evolved in Oregon since the passage of
Senate Bill 100 in 1973. While observers of the electoral process will continue to debate the intentions and understanding of the voters who enacted Measure 37, the impact of land use restrictions on the density of development, particularly in suburban and rural areas, was clearly a central concern. Proponents of the measure were able to point to concrete examples where, as the result of regulations intervening since the acquisition of their property, individual owners were no longer able to subdivide their property to permit an additional dwelling for their children, or allow development to provide anticipated retirement income.
In 2002, the Oregon Supreme Court invalidated a prior voter initiative, Measure 7, as an impermissible amendment of more than one portion of the Oregon Constitution in a single ballot measure. While Measure 7 presented an amendment to the Oregon Constitution, Measure 37 created a purely statutory scheme under which the government was required to compensate the affected property owners unless it chose to "modify, remove, or not to apply" the regulation
within 180 days of the owner's written demand for compensation. Legal challenges to the validity of Measure 37 appear to have been resolved by the Oregon Supreme Court’s unanimous 2006 decision in MacPherson, et al. v. Dept. of Administrative Services, et al., which upheld the
constitutionality of the new law.
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