03:41 PM PST on Tuesday, February 21, 2006

Associated Press and KING Staff Reports

SALEM, Ore. - Ruling against a lower court, the state Supreme Court on Tuesday upheld a voter-approved measure that could give thousands of Oregonians a chance to develop property they have held since the state passed a landmark land-use law in 1973.

Measure 37 was passed by voters in 2004. Under its provisions, landowners can seek compensation from local or state agencies if land-use regulations reduce the value of their properties. If local or state government can’t afford to pay the compensation, those regulations can be waived.

More than 2,000 claims have been filed since Measure 37 took effect in December 2004.

The law has been in a legal limbo since October when Marion County Circuit Judge Mary James said it violates the state and federal constitutions.

The state’s highest court ruled otherwise on Tuesday, saying that James’ arguments were not persuasive.

The ruling means that people whose claims were bottled up after James’ decision can go ahead and try to get local, county and state agencies to approve their development plans.

Among them are Duane and Janice Weeks of Canby, who want to subdivide their 20-acre farm into as many as half a dozen rural homesites.

“It’s amazing. I don’t even believe it. We were steeled that it wasn’t going to go that way,” Janice Weeks said in a phone interview.

While the court ruled that Measure 37 is constitutional, that is not the last word. There are still a raft of legal disputes involving such issues as whether a landowner can transfer the right to develop property through a sale or a bequest.

“Without some action by the legislature, it may be years before additional court cases begin to clarify all of the uncertainties about the law,” Gov. Ted Kulongoski said in his response to the Tuesday ruling. “In the process, those cases will entail substantial costs and frustrations for state and local governments and private property owners throughout Oregon.”

The group that sponsored Measure 37 hailed Tuesday’s ruling as a victory for property owners.

“We hope the lawsuits end, the delaying tactics stop and that the claims can proceed. These people have waited for years to get back the use of their property,” said Dave Hunnicutt, president of Oregonians in Action.

Opponents of Measure 37 were alarmed by the high court ruling, saying the character of Oregon’s rural areas could be damaged by turning farmlands into subdivisions with increases in traffic and pollution.

“It is not fair to put a gravel pit next to someone’s home, and that is what Measure 37 allows,” said Bob Stacey, executive director of 1000 Friends of Oregon. “The government needs to find a way to pay those people who experienced a loss without sacrificing our quality of life and hurting neighbors.”

Landowners began filing claims after Measure 37 took effect December 2004. Counties, local governments and the state began issuing waivers because compensation would have been too costly.

But the law was put on hold when James, the Marion County judge, ruled that Measure 37 strips the Legislature of its power, gives long-time landowners an unfair advantage and fails to give their neighbors a voice in the process.

In its ruling, the state Supreme Court disagreed: “The people, in exercising their initiative power, were free to enact Measure 37 in furtherance of policy objectives such as compensating landowners.”

Counties have taken different approaches since James ruled against the measure on Oct. 14. Some counties have continued to accept and process claims for compensation by landowners, while others put them on hold pending a final resolution to the legal case. Without money to compensate claimants, many counties and state agencies instead waived regulations.

Oregon in 1973 adopted land-use policies that are often regarded as a model for protecting America’s farmland and other open space. The combination of local, county and state regulations has confined most new housing to already built-up areas.

Those laws sparked a property rights revolt that led voter passage of Measure 37 after proponents argued that it was only fair to compensate property owners for losses caused by land use regulations.

Advocates on both sides of the issue were hoping that Tuesday’s decision would give Oregon’s new land-use task force clear guidance on where to take Oregon’s 30-year-old land use planning system, regarded as the strictest in the nation.

Kulongoski and legislative leaders recently appointed what’s been called the “big look” panel to propose reforms.

Residents in Washington's King County has been watching the Oregon dispute because of opposition to King County's critical areas ordinance. Some rural property owners argue those land use regulations impinge on their property rights.