Monday, January 29, 2007

Bailing Out the Speculators

Not long ago there was talk about convening the Oregon Legislature every year, instead of every other year. This, of course, requires a change to the Oregon Constitution. As one might expect, most of the people weighing in on the subject objected to the proposal, ostensibly because more-frequent legislative sessions would give legislators more opportunities to commit legislative mayhem by giving more bad ideas the force of law.

Now that I’ve had ample opportunity to grok the idea (as Heinlein’s Martians were wont to do when a vexing problem asserted itself), I’d like to weigh in on the subject, too. I think it’s a helluva good idea—with one stipulation. Instead of meeting every year to enact new legislation, why not use the newfound time to review legislation passed in prior years? Why not use that time to rectify past mistakes?

Not all laws are good laws, and most laws are subject to the law of unintended consequences. When laws prove burdensome to the people, there should be a relatively quick and easy process to strike those laws from the books. Laws that benefit a few at the expense of many must not be allowed to stand. Measure 37 is such a law.

Voters passed Measure 37 by a substantial margin, giving some property owners a way to get around zoning restrictions that were imposed after they bought the property. Property owners would either be allowed to develop the property in ways that were legal at the time of purchase or receive compensation for the loss of value if the waiver was denied, at the government’s discretion. Oh, what a great idea that turned out to be.

With some 6,000 Measure 37 claims now on the books, various government entities find themselves on the hook for millions of dollars, or at risk of making policy decisions that make a mockery of zoning laws. Oops! The taxpayers just shot themselves in the foot—again.

Buying property is about more than just making an investment; it’s also about speculation. When you buy real property, you hope that its value goes up. That doesn’t mean that taxpayers should bail you out if it doesn’t, or that you should be compensated whenever property zoning laws change. You gamble. You win, or you lose. Place your next bet, or cut your losses.

If we treated other investors/speculators the same way that Measure 37 treats a certain class of property owners, we’d quickly find that there’s not enough money in the entire world to cover all the claims for compensation or dispensation. Anyone and everyone could speculate without fear of loss.

While measure 37 is a testament to the power of democracy, it also attests to the reason why democracy can’t endure. Most people aren’t smart enough to live in one.