Ballot Issues Report

• Summary
• Arguments For
• Arguments Against
• Recommendation
• Analysis

Summary

Referendum 48 asks voters to approve or reject a law passed by the Washington State Legislature this past session that restricts land-use regulations and expands governments' liability to pay for the reduction in property values that is caused by certain regulations for public benefit. This property-regulation measure was originally presented to the Legislature as Initiative 164. After legislators approved it in mid-April, opponents petitioned successfully for a statewide vote to be held on November 7.

Ref. 48 is a bill intended to supplement rather than restrict or replace existing protections in the state and federal Constitutions against unreasonable takings of private property. A taking is defined as regulation or restraint of property uses.

Ref. 48 would require that all government agencies--state, city, county, and other political subdivisions--must prepare at government expense "a full analysis of the total economic impact of a taking before regulating private property. A taking would require the regulating agency to pay the owner full compensation for loss of the value or the use of the property. County assessors would also have to make prompt adjustments in property valuations to reflect the loss of value for tax purposes.

Proponents and opponents of Ref. 48 do not agree on the potential costs of administration and litigation that might flow from requiring economic impact analyses and enforcing other provisions of the new law. Similarly, there is dispute over whether the measure could become far-reaching enough to affect routine local government powers, such as zoning, as well as whether it might be retroactive. (Supporters of the referendum concede the major ambiguity in the measure's language regarding whether it would affect past takings.)

More than 200,000 voters signed Initiative 164, which passed the Legislature with bipartisan support. Property-rights advocates say Washington state must restore balance in the regulation of private property. Although proponents view the work done earlier this year to integrate state laws affecting growth management, shorelines, and environmental protection, as well as local government efforts to simplify permit processes as steps in the right direction, they don't think this activity is sufficient to protect private citizens. Ref. 48 thus is an attempt to establish additional protection of property owners by requiring economic accountability from those who would infringe on private citizens' property rights.

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Arguments For

The case for Ref. 48 rests primarily on what its supporters see as a need to change attitudes within state and local government agencies holding the power to encroach on the property rights of private citizens. Proponents claim that with the stroke of a pen, a bureaucrat can declare privately owned farm property to be a wetland or a wildlife habitat and impose 100-, 300-, or 500-foot buffers around these areas, precluding their use for farming or other uses. In the meantime, the farmer or property owner continues to pay taxes and the mortgage on the property and assessors will not adjust property values unless owners apply for development permits, perform costly studies, and then obtain denials of the applications.

Some say that heavy-handed land-use bureaucrats have become the fourth branch of government. Although not elected and therefore not accountable to the people, their rules and regulations have the same impact as law. Sponsors claim that legislation is needed to avoid future "horror stories' in which landowners have suffered economic hardship at the hands of heedless government agencies.

Proponents of the referendum say the opposition has grossly exaggerated its potential impacts should it become a permanent fixture in state law. They note that a much-mentioned University of Washington study critical of the prospective costs of Ref. 48 assumed that government agencies would continue to impose the same regulations that this legislation was intended to address. In addition, the study was financed by a foundation friendly to environmentalists, thus its objectivity must be questioned.

Proponents note that when environmental laws like the state's Environmental Protection Act (SEPA) were passed in the 1970s, predictions that taxpayers would underwrite huge enforcement costs were soon proven groundless. Today, there is no hard evidence to indicate Ref. 48 will be any more expensive than SEPA or the Shorelines Management Act. State or local jurisdictions will not require new taxes to implement Ref. 48 unless a government entity has extensive plans to "take" private land by enacting new regulations for public benefits, such as additional wetlands, fish and wildlife habitat, and buffer zones.

Should legal flaws exist within Ref. 48, as some critics claim, supporters in the Legislature are on record that any mistakes can be corrected as early as the 1996 legislative session.

Proponents are called upon frequently to explain what Ref. 48 will The case for Ref. 48 rests primarily on what its supporters see as a need to change attitudes within state and local government agencies holding the power to encroach on the property rights of private citizens. Proponents claim that with the stroke of a pen, a bureaucrat can declare privately owned farm property to be a wetland or a wildlife habitat and impose 100-, 300-, or 500-foot buffers around these areas, precluding their use for farming or other uses. In the meantime, the farmer or property owner continues to pay taxes and the mortgage on the property and assessors will not adjust property values unless owners apply for development permits, perform costly studies, and then obtain denials of the applications.

In recent years, at least 18 states have enacted property-rights laws of various kinds. Supporters of Ref. 48 say that the objective of Washington's new law is very simple: it is about requiring government to compensate private property owners when land-use restrictions reduce the value of their property.

They argue that it will not affect routine land-use actions by local jurisdictions, such as rezoning or actions to abate nuisances. And proponents claim it is clear that citizen sponsors and legislators intended that Ref. 48 not be retroactive.

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Arguments Against

While no one defends the status quo in Washington state's handling of land-management issues, opponents believe that Ref. 48 does not offer coherent remedies. Opponents contend the property-rights measure is a recipe for regulatory chaos and budget pressures on the state's governments that could drive property taxes through the roof.

A recent study of the initiative conducted by the University of Washington Institute for Public Policy and Management estimates that Ref. 48 could cost local governments alone between $305 million and $986 million annually for the required economic analyses and studies of prospective land-use regulations or restraints. The same jurisdictions could be liable for an additional $3.8 billion to $11 billion over a period of years in compensation payments to landowners suffering losses in value or usage of their property.

In addition to its budget-busting potential for local governments, strong differences on the exact meaning of Ref. 48 portend years of costly litigation in the courts and almost endless debate in legislative circles.

Early this year, while the Legislature was contemplating Initiative 164, the executive committee for the Environmental and Land Use Law Section of the Washington State Bar Association took a position on pending legislation for the first time in its history. It acted, a spokesman said, "because of extraordinary concern over the effect of the initiative.

The bar group, comprised of attorneys with clients who are developers, government agencies, or environmentalists, said this legislation is too poorly written and too poorly integrated with existing law to be enacted, noting conflicts with such bedrock state laws as the Shoreline Management and Growth Management Acts. Citing huge prospective costs of litigating the law's meaning and of paying compensation to landowners, the bar organization said government entities could wind up caught between state laws that require them to regulate and an initiative [now Ref. 48] that imposes incalculable economic liability for doing so.

Opponents predict that Ref. 48 would have negative influences on housing affordability, housing availability, and property taxes. In response to proponents claim that the Legislature can correct any legal flaws that exist in Ref. 48 as early as the 1996 legislative session, opponents note that it will take a 2/3rds majority to approve such changes. Gathering that many votes will be very difficult, opponents believe.

Opponents contend that Ref. 48 is more sweeping than any property-rights legislation in the country, citing the U.W. study, which found that Ref. 48 proposes a degree of change that is sweeping and even radical compared to precedent and to actions in other states.

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The Municipal League Recommends: NO

Analysis

Municipal League rules advise scrutiny of statewide propositions when there is a potential for significant impact on local and county government. While the League agrees with proponents of Referendum 48 that there are significant weaknesses in Washington state's land-regulation procedures, the Municipal League nonetheless recommends rejection of the measure on Nov. 7.

Supporters of this measure argue persuasively that government regulation of privately owned land has gone too far and that Ref. 48 would send a clear message in favor of reform. Unfortunately, this legislation is not the answer to the state's current problems.

On its face, Ref. 48 is full of ironies. It proposes, for instance, to make payments to landowners when a government jurisdiction enacts certain kinds of land-use regulations, even when there are no plans for the land's further development. It would likely create a huge new bureaucracy, with enormous costs and a lengthy process that would leave developers even more vulnerable to crippling delays, about which developers have complained for decades. In fact, one of the strongest arguments against Ref. 48 is its potential for inhibiting government decision-makers so that the issuance of permits could become even more difficult than it currently is.

The anticipated high cost obligations to county or local subdivisions could portend either significant increases in taxes, or a sharp cutback in essential land-use management decisions, or both.

The sponsors contend Ref. 48 would not interfere with routine regulation such as local zoning, height limits, or abatement of nuisances. Opponents respond that Ref. 48's language is so sweeping, its meaning could be interpreted in the courts as affecting any land-use issue. And there is no hard data to support the proponents' view that the costs of Ref. 48 might be recaptured through taxes on higher property values that would come with less intensive land-use controls.

The normally neutral Environmental and Land Use Law Section of the Washington State Bar Association has voiced its extraordinary concern that this measure, would make the regulatory situation worse for everyone--regulated landowners, regulators, and citizens alike.

None of this lessens legitimate concerns over past abuses in which excessive regulation and unresponsive government have caused hardships, especially for owners of smaller properties. Fortunately, proposals are now circulating in legislative and public affairs circles designed to correct such problems without pursuing the wholesale, meat-ax approach proposed in Ref. 48.

The League urges the Legislature and local governments to be responsive to significant concerns of property owners and developers, and to engage a broad range of citizens in crafting workable solutions.

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