Cato Institute
1000 Massachusetts Ave, NW
Washington DC 20001-5403
 Phone (202) 842-0200
Fax (202) 842-3490
Contact Us

Mugged by the State Mugged by the State, by Randall Fitzgerald

The Oregon Retirees

(The following is an excerpt from Randall Fitzgerald's book, Mugged by the State, (Regnery, 2003). This book is available from the Cato bookstore.)

Tom and Doris Dodd walked into the Hood River County, Oregon planning department barely able to contain their excitement. For five years they had been working and saving to build their retirement dream house on forty acres they owned twelve miles outside the town of Hood River. The site offered a spectacular view of Oregon's tallest peak, Mt. Hood. All they needed was a building permit.

But after looking up their land records an assistant county planner confronted them with stunning news. "You can't build here. The area has been rezoned."

The Dodds, both fifty-seven years old, were thunderstruck. No one had ever informed them of any zoning change. Tom had quit a lucrative job with an oil services company in Houston so they could move to Hood River and start construction on the house.

"There must be a mistake," said Tom, "The county told us repeatedly by mail we could build here."

"Sorry," the county employee shrugged, "That's the law."

The Dodds had received a series of communications from Hood River county offices affirming their right to build. In a January 24, 1984, notice, for example, the Hood River County Planning Commission informed the couple that their proposed dwelling conformed to statewide land-use regulations.

The Dodds had been blindsided. On February 21, 1984, the county changed the zoning for their property to a Forest Zone, and on December 17 the count enacted an ordinance banning houses on tracts of forty acres or more located in such zones. The stated purpose of this "no-growth" measure was to preserve forestland for timber production. As required by Oregon law, the county planning commission published six notices in the local Hood River News announcing the zoning change. But the Dodds lived in Houston, never saw the notices, and received nothing in the mail from the county describing the changes.

After the Dodds finally learned of the zoning change in 1988, a newspaper reporter asked Hood River County's planning director why the county had never bothered to inform the Dodds. "We are a small budget operation," replied Michael Nagler, "We can't afford to spend time to update lists of property owners."

Under the zoning code, harvesting timber was the only economic use the Dodds could make of their property. To determine if even that was feasible they commissioned a forest inventory and land appraisal by a highly regarded appraiser. After calculating the expected costs of timber harvesting, as well as the reforestation required by state law, the appraiser concluded that the value of all the timber on the Dodds' land was less than $700. Even if the entire forty acres was clear-cut-every tree cut down-the study warned that "harvesting the timber on this property does not make economic sense."

Now Tom and Doris were truly devastated. They had invested $33,000 of their savings in a property that zoning had devalued to less than $700. "We've squandered our nest egg on a beautiful place to have a picnic," Tom observed with bitter humor.

The Dodds would have been happy to give the state of Oregon thirty-nine of their acres if they could have built on the remaining one acre. But since their land was now zoned as a forty-acre lot, they could only sell it all at once as a single plot, which was a ludicrous option since no one would buy land useable for nothing more than a picnic. Equally infuriating was the manner in which the rezoning had unfairly singled them out. Between 1984 and 1991 the county allowed thirty-four other homes to be built in the forest zone near the Dodd property because each of these parcels was less than forty acres. Under the regulations a family that owned thirty-nine acres next door to the Dodds could build their own home while the Dodds were prevented from doing so.

On December 20, 1990, the county planning director denied the Dodds' application for land-use permits, variances, and zone changes. When the county planning commission later affirmed that decision, the Dodds appealed to the Oregon Land Use Board of Appeals, and lost again. They appealed that decision to the Oregon Court of Appeals, and then to the Oregon Supreme Court, losing each time. Meanwhile, with help from the Pacific Legal Foundation based in Sacramento, California, they filed suit in federal court charging that under the Fifth and Fourteenth Amendments to the U.S. Constitution their land's value had been taken by Hood River County illegally and without compensation.

On June 29, 1995, the U.S. Court of Appeals for the Ninth Circuit ruled that the Dodds should be given a trial in federal court on their claim of damages. Before the trial could occur, the Hood River County Planning Commission reversed itself, voting on June 16, 1996, to approve the Dodds' plan to build their home. That still left them with several years of bureaucratic struggle just to acquire the local building permits that were required.

The Dodds' claim for damages went nowhere. A federal district court judge in Portland, Oregon, ruled that no taking had occurred because there was still some value, even if just $700 worth, remaining for the Dodds if they harvested the trees on their land. The Court of Appeals for the Ninth Circuit later affirmed this decision, and the Pacific Legal Foundation's 1998 application for U.S. Supreme Court review of the case was denied.

"The little guy stands virtually no chance against the land-use bureaucracy," Dodd observed in an interview with me, "we may have won the right to build, but my wife and I still had over a decade of our retirement years stolen from us."