Oregon could lose private forests at the rapid clip of other states, now that the state Supreme Court effectively ruled that Oregon's 30-year-old land use laws are - at least partially - invalid, the Oregon State University's Forestry Department dean said Thursday.
North Carolina, for instance, lost 1 million acres to urbanization during the 1990s, Dean Hal Salwasser said during a kick-off address for the annual Oregon Logging Conference in Eugene.
Washington state lost 400,000 acres during the same period, and there's only one difference between Oregon and its neighbor to the north: Oregon's one-of-a-kind land use system.
"Until yesterday," Salwasser said, referring to the Feb. 21 ruling that upheld the voter-passed Measure 37.
"If the Legislature leaves the Supreme Court ruling in effect, we certainly will lose some forests to residential development," he said.
The law requires governments to pay property owners if their land values have been reduced by zoning and other land use rules. Instead of paying, governments can waive the rules. Waivers are the most likely outcome, Salwasser said, because Oregon's cities and counties don't have the money to compensate the owners to keep land use laws in force.
The incentives are just right for a sell-off of forest land, he said. With 30-year mortgage rates seemingly stuck in the 6 percent range, high housing demand continues and developers are still hungry for virgin acreage.
Private owners of forest land who can sell under the Measure 37 rules are likely to be tempted, Salwasser said.
An acre of cut-over forest land is worth $500 to $1,000 if it must be kept in forest production, but if it can be converted to residential land, the sky is almost the limit. "If it's sitting near a city, you can only imagine what that acre is going to sell for," Salwasser said.
In recent years, forest land acreage has migrated from the hands of lumber mill companies to the hands of investment groups called either "timber investment management organizations" or "real estate investment trusts."
The change was advantageous to mill owners, because they could avoid paying harvest taxes - reducing their tax rate from 38 to 15 percent.
But the imperative of the investment companies is different than the old saw mill owners. The investment groups' job is to maximize returns rather than supply logs to saw mills, so the change in land use laws may tip the balance to land sales and development, Salwasser said.
"They look at their land and say: `What pieces have the highest value as real estate and what has the highest value as forest?' "
Expect the Portland metropolitan area, Washington County and Bend to sprawl, if the Legislature does nothing to alter Measure 37, he said.The Register-Guard
