Benson v. City of Portland , 119 Or. App. 406 ( 1993 )

De MUNIZ, J.

Petitioner is the owner of several unoccupied residential buildings that the City of Portland has declared derelict and required to be registered pursuant to Chapter 24.80 of the Portland City Code (PCC). He brought this writ of review proceeding, seeking reversal of the city’s orders on the grounds that the derelict building legislation violates the Due Process and Equal Protection Clauses¹ of the federal constitution and the takings clauses of the state and federal constitutions. The trial court upheld the orders. Petitioner appeals, and we affirm.

PCC 24.15.065 defines a “derelict building” as

“any building, structure or portion thereof which is unoccupied and meets any of the following criteria:

“(a) Has been ordered vacated by the Director pursuant to 29.10.090(c) or (d);

“(h) Has been issued a correction notice by the Director pursuant to 29.10.090(a);

“(c) Has been posted for violation of Section 18.03.050, more than once in any two year period;

“(d) Is unsecured;

“(e) Is boarded.”

Upon a determination by the responsible city officials that a building is derelict, the owner must (1) register the building in accordance with PCC 24.80.020; (2) submit to quarterly inspections of the building, PCC 24.80.020F; (3) pay a yearly fee of $400 for each building that remains derelict, PCC 24.80.030; and (4) submit, as part of the registration documents,

“information relating to the location and ownership of the building, the expected period of its vacancy (such period to be mutually agreed upon by the owner and the Director), a plan for regular maintenance during the period of vacancy, and a plan for its reoccupancy and use, or its demolition, which plans shall be reviewed by and are subject to the approval of the Director.” PCC 24.80.020C.

The fee may be waived if certain conditions are met.

Section 24.80.020G is the principal object of petitioner’s discontent. It provides:

“When all code violations have been corrected and a derelict building has been legally reoccupied, or when the building has been demolished, and the lot cleared in accordance with the provisions of this Title, it shall cease to be a derelict building.”

The determinations of derelict status are subject to two levels of city review under sections 24.80.020E and 24.80.040 of the code and are then judicially reviewable by writ of review.

In his first assignment, petitioner contends that section 24.80.020G offends the prohibitions on uncompensated takings in Article I, section 18, of the Oregon Constitution and in the Fifth Amendment. He does not attempt to differentiate between the applicable law under the two provisions. The theme of his argument, however, is that his buildings are residential; that, if not demolished, a “vacant building must be reoccupied (i.e., rented) in order to cease to be a derelict building;” and that “[r]e-renting is thus compulsory.” (Emphasis petitioner’s.) He concludes that it is a per se taking under both constitutions for an owner to be required to allow tenants or other third parties to live in or to occupy his property.

The city responds, first, that petitioner has not been subjected to any reoccupancy or demolition requirement under section 24.80.020G, because there is none; petitioner may choose, instead, to submit indefinitely to the mandatory provisions of the legislation, such as the annual fee requirement. The city also contends that, even assuming petitioner’s premises and legal conclusions, the legislation is an exercise of the “police power”² that gives rise to no taking under either constitution.

In the balance of this opinion, we will assume, without deciding, the correctness of petitioner’s premise that a taking would havé occurred if he were required to lease space in his buildings to tenants. Compare Loretto v. Teleprompter Manhattan CATV Corp., 458 US 419, 102 S Ct 3164, 73 L Ed 2d 868 (1982). However, he does not show how or why the city’s legislation does require that. Petitioner has not yet performed in accordance with the “reoccupancy” provision, let alone been compelled to do so. Consequently, his challenge is a facial one, and his burden is to show that the provision, first, necessarily refers to rentals or other undesired occupation by third parties and, second, compels him either to rent the buildings or demolish them. He does not succeed on either prong.

In equating “reoccupied” with rentals, petitioner simply posits that meaning, and assumes all others away. His assumption presupposes that the only use that can qualify as a reoccupancy is around-the-clock residential use. In the absence of any suggestion by petitioner that only that use would meet applicable zoning-requirements, see Schoonover v. Klamath County, 105 Or App 611, 616, 806 P2d 156, rev den 311 Or 432, cert den_US_(116 L Ed 2d 327) (1991), we cannot accept his argument. Neither petitioner’s assumption nor the dissent’s reading of insurance case law and the other inapposite authorities on which it relies shows that “reoccupied” can have only the one meaning they choose to give it; moreover, neither is consistent with this court’s obligation to construe the legislation consistently with its constitutionality, if possible. As far as the language of the facially challenged legislation reveals, it is as compatible with ongoing commercial and myriad other uses of the buildings, by petitioner or his agents, as it is with residential tenancies or other third-party occupancies.

The dissent suggests that we have not given sufficient consideration to the meaning of “occupancy,” “reoccu-pancy” and like terms. To the contrary, for purposes of this facial constitutional challenge, the preceding paragraph supplies all the definition that is necessary or permissible: It demonstrates that the language of the legislation can be constitutionally applied.

Equally fundamental, neither reoccupancy specifically nor section 24.80.020G generally are stated as mandatory requirements. They simply define what relieves a building from its previously declared derelict status. They do not state that a property owner must pursue that relief and, for purposes of a facial challenge, we are not at liberty to add any requirement to those the legislation provides, let alone one that could, arguably, create a constitutional problem.

Petitioner relies on Seawall Assocs. v. City of NY, 74 NY2d 92, 544 NYS2d 542, 542 NE2d 1059 (1989), as his principal authority. That case, of course, does not bind us. More significantly, however, it seems to demonstrate the error in petitioner’s argument rather than lending support to him. The regulation in Seawall that the New York court held to violate the Fifth Amendment expressly imposed requirements on the owners of certain properties that they lease them to tenants and that they restore them for and retain them as rental space. Violations were punishable by fines of up to $150,000. Stated another way, the Seawall legislation expressly required what petitioner reads into the Portland legislation, although it contains no such requirements. The regulations in Seawall were so different from the legislation here that the case is completely useless to our analysis.

A far more analogous case is Nelson v. Benton County, 115 Or App 453, 839 P2d 233 (1992). The property owner there appealed to LUBA and, in turn, to us, from the county’s determination that his 1.37-acre parcel did not qualify for a nonfarm dwelling. The statutory and ordinance standard allowed such dwellings only on property that is generally unsuitable for agricultural use. See ORS 215.283(3)(d). The county concluded that, although the property in question was sub-sized, it was not “generally unsuitable,” because it could be used for farming in conjunction with nearby, separately owned, farming operations. The owner argued that that determination constituted a taking, because it “effectively force[d] the sale or lease of the land.” We rejected that argument, explaining:

“The county’s decision does not compel or even suggest that he sell, lease or do anything else with his land. Rather, it holds that, along with other reasons, the property is not generally unsuitable for productive farm use because it can be operated for that purpose in combination with adjacent or nearby properties; therefore it does not qualify for a nonfarm dwelling.” 115 Or App at 457.

Similarly, here, petitioner mistakenly identifies an uncompelled potential consequence of a regulation as being part of the regulation. The city simply does not require petitioner to lease his property to others, and he advances no other basis for concluding that his property has been taken within the meaning of either constitution. Petitioner and the dissent rely on hypotheses about how the city’s legislation might cause owners of derelict buildings to act, rather than focusing on the relevant issue, i.e., what the language of the legislation actually requires the owners to do.

Nelson v. Benton County, supra, illustrates another problem with petitioner’s argument: He does not differentiate among the types of governmental actions on which takings claims can be predicated and, therefore, he does not identify the legal standards that apply to this claim. Here, as in Nelson, “[t]he only constitutional tests that have any application are those pertaining to regulatory takings,” and, as in Nelson, petitioner’s claim cannot survive those tests, because he does not demonstrate that the legislation deprives him of all “economically viable and substantial beneficial use of his property.” 115 Or App at 458.

A property owner has a high threshold to surmount in order to obtain compensation from the government for losses occasioned by a regulation of property that serves a legitimate governmental objective. As the court said in Eckles v. State of Oregon, 306 Or 380, 398, 760 P2d 846 (1988), “[e]xercise of the ‘police power,’ unlike exercise of the ‘eminent domain power,’ does not require compensation.” See also Nollan v. California Coastal Comm’n, 483 US 825, 107 S Ct 3141, 97 L Ed 2d 677 (1987); Gruner v. Lane County, 96 Or App 694, 773 P2d 815 (1989)³ Petitioner comes nowhere close to approaching that threshold.

Many of the points that the dissent makes go well beyond petitioner’s arguments. Nevertheless, the dissent comes no closer to the threshold, and many of its propositions rest on misreadings of the authority on which it relies. For example, it quotes very selectively from Fifth Avenue Corp. v. Washington Co., 282 Or 591, 613, 581 P2d 50 (1978), in support of its conclusion that the city is acting in an “enterprise capacity.” When the language from Fifth Avenue that surrounds but is omitted from the dissent’s quotation is read, however, the opposite conclusion follows, i.e., the city is acting in a purely regulatory capacity.

We reject petitioner’s taking argument. His due process⁴ and equal protection arguments come to nothing more than assertions that the city’s regulations do not treat all of the possible permutations of the regulated conditions in precisely the same way. That shows no constitutional infirmity.

Affirmed.

1 The relevant assignment of error refers only to the Equal Protection Clause. Petitioner’s supporting argument also refers to Article I, section 20, of the Oregon Constitution. The substance of the argument makes no distinction between the two provisions.

2 We use the term “police power” guardedly, as a short-hand description of the governmental authority to regulate private property without involving governmental or public acquisition of private property. We recognize that the fashion and the usefulness of the term are questionable.

3 We do not imply that regulations of use and exercises of the police power would not constitute takings if they compelled a property owner to allow permanent physical occupation of land by the government or third parties. However, as we have held, the Portland legislation does not do that.

4 The assignment that petitioner labels as a due process challenge seems instead to be a takings argument, drawing on Nollan v. California Coastal Comm ’n, supra. The argument is equally unmeritorious under either designation.