Putting an end to land use by lottery

This is a great article for getting your head around Measure 49 and what it all means.

By Eric Schuck, Professor of Economics at Linfield College

 

From The Oregonian: Wed. 10/17/07

Like most people, I like leaving my day job at work. But the moment most people find out that I'm an economics professor, I get asked a lot of financial questions ("What's the stock market going to do?"). Lately, though, I've been getting a tough question, a really tough question: What does Measure 49 mean?

At root, Measure 49 seeks to settle the question of whether or not the cost of preserving open space will be carried by private landowners or whether the costs of sprawl can be shifted to society as a whole by private landowners. From an economic standpoint, neither side has exactly staked out the moral high ground.

In this kind of decision-making environment, economists tend to focus on incentives and process. And by these criteria, passing Measure 49 is much less worse than leaving Measure 37 in place. To see this, we need to flash back to 1973.

Open space is what economists consider a public good, a good where the collective benefits to society outweigh the costs of providing it, but where the benefits to any single individual are sufficiently diffuse and the costs sufficiently concentrated that no single individual has an incentive to provide it. To overcome this problem and to get society to actually produce benefits like open space, economists generally favor either subsidies or direct public provision.

By constructing tax and land-use codes that provide differential -- indeed, deferential -- treatment for agricultural lands and forestlands, Oregon took the subsidy route. But it also took the least desirable route to direct provision: zoning certain areas into specific production of open space without paying for it.

That's where Measure 37 came in. To undo some of the less-desirable traits of Oregon's land-use laws, Measure 37 sought to put control back in the hands of landowners. But it went too far, devolving land-use and open-space decisions to their least-regulated environment. Under Measure 37, regional land-use decisions come from the private decisions of landowners with the longest tenure. Basically, an area's land-use patterns are now dictated by the oldest property owner with the least patience, regardless of what the general population might want.

Worse still, by making this decision-making privilege a one-time, non-transferable deal, Measure 37 gave landowners an incentive to make their choices sooner rather than later, and to do so faster than their neighbors lest they be boxed out of the most profitable paths. This is why we saw the flurry of maxed-out Measure 37 claims right before the submission deadlines. People didn't want to lose their spin at the roulette wheel.

Land-use decisions have taken on a chaotic, casino-like feel, where every landowner is trying to hit the development jackpot regardless of regional consequences. Turning our regional growth patterns into a slot machine outcome is a dumb way to run a state.

Which brings us back to Measure 49. For all of their flaws, the basics of Oregon's land-use laws were generated through a deliberative, legislative process, a process that allowed society's larger interests in land-use policy to be reflected. It set up a system that took long-run consequences into account and gave a certain amount of stability to the region's development path, stability that has made our future much easier to map.

Measure 49 would restore the positive incentives and stable process that Measure 37 stripped away, while recognizing that producing open space without compensation is unfair. So what does Measure 49 mean? An end to land use by lottery in Oregon.