Should government have to pay for land-use decisions that affect property value?

Thursday, Sept. 13, 2018 10:50 PM
La Plata County commissioners will take an official stance on Amendment 74 on Oct. 9, though all three board members voiced opposition to the proposed measure on Wednesday.

A proposed initiative on the November ballot that would allow Colorado residents to make financial claims on property that is devalued because of government actions could create a mess for La Plata County, officials said Wednesday.

Amendment 74 would allow property owners to claim a government decision (through such measures like land-use codes or zoning laws) decreased the value of their property and sue local and state governments for compensation.

The unintended consequences of Amendment 74 concern county officials.

“I think it’s just going to be a morass of litigation,” county attorney Sheryl Rogers said Wednesday. “It’s a hot mess if you ask me.”

Under current law, Colorado residents can be compensated for government actions, such as eminent domain, if it deprives them of nearly all their property or leaves the land with no economic use.

Amendment 74 would open up claims if a government law or regulation reduces their land’s “fair market value.”

Amendment 74, however, has been called out in recent weeks for its possible unpredictable consequences.

Denver city councilor Debbie Ortega wrote in an op-ed to Colorado Politics the measure would handcuff local governments and the state from making common sense land-use decisions, paving the way for irresponsible development.

“Think of all the ways local leaders help shape how our communities look – and how Amendment 74 could upend all that,” she wrote.

Ortega warned Amendment 74 would “open the floodgates to frivolous lawsuits at the taxpayer’s expense.”

“Everyday Coloradans – individuals and small businesses – would have to pay more in taxes in order to fight in court, or they’d experience decreased safety and livability of our communities,” Ortega wrote.

Amendment 74 is of particular concern to La Plata County, which is attempting to overhaul its much outdated land-use code and possibly implement zoning laws for the first time in the county’s history.

“The reality is you’ll do nothing,” Rogers said.

Indeed, Sam Mamet, executive director of the Colorado Municipal League, said in a previous interview to Colorado Politics, “My advice to counties and municipalities is if this passes, don’t do anything ... no zoning, no ordinances.”

All of the county commissioners on Wednesday voiced opposition to Amendment 74. It is likely the board will take an official stance at its Oct. 9 meeting, which will be open for public comment.

“It could really hurt the very people that think it could help, and that’s what concerns me a lot,” said commissioner Brad Blake.

If a property owner wants to put a new business on his or her land, for instance, and a government entity approves it, a neighbor may be able to file a claim alleging that action has devalued his or her land.

“There could be huge implications to it,” Blake said.

Commissioner Julie Westendorff fears that if the ballot measure passes, the county will be unable to prevent businesses like liquor stores or marijuana dispensaries from being located next to schools.

“Areas we consider protected from vice wouldn’t be able to be protected anymore,” she said.

Westendorff said she could also anticipate Amendment 74 being used as a “windfall for people who want to make frivolous claims.”

“This could be the most costly thing on the ballot for La Plata County,” she said.

Commissioner Gwen Lachelt said if the amendment is passed and implemented, “local and state governments will not be able to protect public health, safety and welfare.”

It is unclear in the ballot language where compensation funds would be drawn from, Rogers said.

Mae Morley, a rancher in western La Plata County, said Wednesday she supports Amendment 74, though admitted she didn’t know all the possible “repercussions” or where the funds for compensation would come from.

“I am no expert on this,” she said. “I just read enough and I know farmers and ranchers, rural people like us, are very much for this because we feel like we’re losing value on our property.”

After a similar measure passed in 2004 in Oregon, residents there filed 7,000 claims totaling nearly $20 billion. Three years later, voters rescinded the measure in a special election.

Amendment 74 has also received criticism from those who say the ballot item is a kickback from another proposed measure, Initiative 97, which proposes a 2,500-foot setback between oil and gas wells and the nearest home.

Amendment 74 is funded heavily by the Colorado Farm Bureau and Protect Colorado, a political group funded by the oil and gas industry.

Opponents of Initiative 97 say the ballot item is an attempt to put a moratorium on new oil and gas development. If both measures passed, property owners could file claims for losses to mineral rights.

Just last week, Gov. John Hickenlooper tried unsuccessfully to reach a compromise between the two opposing measures poised for the November election, Colorado Public Radio reported.

jromeo@durangoherald.comA previous version of this story included a comment in which La Plata County Commissioner Gwen Lachelt said she wanted both Amendment 74 and Initiative 97 removed from the ballot and for Gov. John Hickenlooper to form a task force to resolve issues between the two sides. Lachelt clarified Thursday that the comment made at a county work session Wednesday was made in jest. In 2014, there were also two opposing ballot measures related to oil and gas development. Both measures were taken off the ballot and Hickenlooper formed a task force, of which Lachelt was co-chair. Lachelt said the task force was unsuccessful and did not resolve any issues, and that many of these lingering tensions have led to the two opposing ballot measures this year.

Amendment 74

The ballot question is:
“Shall there be an amendment to the Colorado Constitution requiring the government to award just compensation to owners of private property when a government law or regulation reduces the fair market value of the property?”
This is the amendment to the state Constitution if the ballot measure is approved by a majority of votes:
“Private property shall not be taken, of damaged, OR REDUCED IN FAIR MARKET VALUE BY GOVERNMENT LAW OR REGULATION for public or private use, without just compensation. Such compensation shall be ascertained by a board of commissioners, of not less than three freeholders, or by a jury, when required by the owner of the property, in such manner as may be prescribed by law, and until the same shall be paid to the owner, or into court for the owner, the property shall not be needlessly disturbed, or the proprietary rights of the owner therein divested; and whenever an attempt is made to take private property for a use alleged to be public, the question whether the contemplated use be really public shall be a judicial question, and determined as such without regard to any legislative assertion that the use is public.”