VAN HOOMISSEN, J.
Hood River County (the county) denied Thomas and Doris Dodd’s (petitioners) application for a conditional use permit to build a single-family dwelling in a forestry zone.
The Land Use Board of Appeals (LUBA) affirmed.
Dodd v. Hood River County,
22 Or LUBA 711 (1992). The Court of Appeals also affirmed.
Dodd v. Hood River County,
115 Or App 139, 836 P2d 1373 (1992).
The issues before this court are (1) whether LUBA’s findings are supported by substantial evidence in the record; (2) whether petitioners’ property has been “taken” by the county under Article I, section 18, of the Oregon Constitution;
and (3) whether the county has taken a “conservation easement”
in petitioners’ property. On review, pursuant to ORS 197.850(9),
we affirm.
In 1983, petitioners purchased 40 acres of land in Hood River County’s F-l (forest) zone for $33,000, intending eventually to build a dwelling there for use after their retirement. At that time, the zoning of the land permitted construction of a dwelling.
However, the county was then in the process of revising its comprehensive plan to bring the plan into compliance with the Land Conservation and Development Commission’s (LCDC) Statewide Planning Goals. In December 1984, the county’s ordinance was amended to conform to LCDC Goal 4. As amended, the ordinance prohibited construction of dwellings on F-l (forest) zone land of 40 acres and larger, unless such dwellings were “necessary and accessory to a forest use.”
In 1990, petitioners filed with the county a consolidated application for a land use permit, conditional use permit, and a zone and comprehensive plan change to erect a dwelling on their land. Finding that petitioners’ proposed
dwelling was not “necessary and accessory to a forest use,” the county denied petitioners’ application. Petitioners appealed to LUBA.
Before LUBA, petitioners argued (1) that the county’s findings were not supported by substantial evidence in the record, (2) that the county’s action was a “taking” of their land in violation of Article I, section 18, and (3) that the county had taken a “conservation easement” in their land in violation of ORS 271.725. The evidence before LUBA included a report prepared by petitioners’ expert, concluding that petitioners’ land was worth only $691 if it was unbuildable.
The Oregon Department of Forestry reviewed petitioners’ expert’s report and concluded that its forest capability predictions were inconsistent with the department’s data and that the projected figures were not based on the productive potential of petitioners’ land. The county’s forester surveyed petitioners’ land and estimated that 24 acres could be used for timber production and that the amount of timber on petitioners’ land was almost three times as much as had been estimated by petitioners’ expert. The forester concluded that, even after deducting reforestation costs, petitioners could get at least $10,000 from the sale of the timber on their land alone.
LUBA found:
“It appears that the property has some limitations for forest use, but can produce a net profit if properly managed for timber production. The limited value of the existing timber as well as the lesser value ascribed to the future timber production potential of the property by petitioners’ expert appears to have as much to do with past deficiencies in forest management and limited forest management projected in
the future, as with the inherent limitations of the property.”
Dodd v. Hood River County, supra,
22 Or LUBA at 732.
LUBA affirmed the county’s decision, concluding that the denial did not constitute a “taking” under Article I, section 18.
Id.
at 711. Petitioners sought judicial review in the Court of Appeals.
The Court of Appeals affirmed LUBA’s decision, stating that petitioners had lost nothing except the ability to build a dwelling, and nothing was obtained by anyone else. The court stated that the only question petitioners could present was “whether the denial amounted to a regulatory taking under the standard articulated in
Fifth Avenue Corp. [v. Washington County,
282 Or 591, 609, 581 P2d 50 (1978) (property is not taken where zoning regulation allows landowner some ‘substantial beneficial use’ of property)].” 115 Or App at 142-43. The court held that LUBA’s conclusion from the record — that the forest use petitioners may conduct on their property had a potential value of at least $10,000 — was enough for “a substantial beneficial use ofthe property to exist.”
Id.
at 143. The court rejected petitioners’ argument that, because dwellings are permitted on other parcels in the same zone, the county’s regulation does not advance a legitimate governmental interest:
“The law of non-conforming uses is well-established in Oregon, and it promotes the value of allowing owners to continue uses of property that were lawful when they were established but that later legislation would restrict or preclude. Petitioners’] * * * argument seems to posit that the government cannot have more than one legitimate interest that has some bearing on the same object. There is nothing inconsistent in the simultaneous protection of pre-existing property rights and of resources that are the subject of new regulation.” 115 Or App at 143-44.
In sum, the Court of Appeals rejected all of petitioners’ assignments that challenged LUBA’s ruling on the Article I, section 18, issues.
Id.
at 144. We allowed review.
On review, petitioners argue (1) that LUBA’s findings of fact are not supported by substantial evidence in the record, (2) that LUBA erred in concluding that their land was not “taken” by the county in violation of Article I, section 18,
and (3) that LUBA erred in concluding that the county had not taken a “conservation easement” in their land.
Petitioners first argue that substantial evidence does not support a finding that their property is worth more than $691, the current net value of the property established by petitioners’ expert. Substantial evidence exists to support a finding of fact when the record, viewed as a whole, would permit a reasonable person to make that finding. ORS
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VAN HOOMISSEN, J.
Hood River County (the county) denied Thomas and Doris Dodd’s (petitioners) application for a conditional use permit to build a single-family dwelling in a forestry zone.
The Land Use Board of Appeals (LUBA) affirmed.
Dodd v. Hood River County,
22 Or LUBA 711 (1992). The Court of Appeals also affirmed.
Dodd v. Hood River County,
115 Or App 139, 836 P2d 1373 (1992).
The issues before this court are (1) whether LUBA’s findings are supported by substantial evidence in the record; (2) whether petitioners’ property has been “taken” by the county under Article I, section 18, of the Oregon Constitution;
and (3) whether the county has taken a “conservation easement”
in petitioners’ property. On review, pursuant to ORS 197.850(9),
we affirm.
In 1983, petitioners purchased 40 acres of land in Hood River County’s F-l (forest) zone for $33,000, intending eventually to build a dwelling there for use after their retirement. At that time, the zoning of the land permitted construction of a dwelling.
However, the county was then in the process of revising its comprehensive plan to bring the plan into compliance with the Land Conservation and Development Commission’s (LCDC) Statewide Planning Goals. In December 1984, the county’s ordinance was amended to conform to LCDC Goal 4. As amended, the ordinance prohibited construction of dwellings on F-l (forest) zone land of 40 acres and larger, unless such dwellings were “necessary and accessory to a forest use.”
In 1990, petitioners filed with the county a consolidated application for a land use permit, conditional use permit, and a zone and comprehensive plan change to erect a dwelling on their land. Finding that petitioners’ proposed
dwelling was not “necessary and accessory to a forest use,” the county denied petitioners’ application. Petitioners appealed to LUBA.
Before LUBA, petitioners argued (1) that the county’s findings were not supported by substantial evidence in the record, (2) that the county’s action was a “taking” of their land in violation of Article I, section 18, and (3) that the county had taken a “conservation easement” in their land in violation of ORS 271.725. The evidence before LUBA included a report prepared by petitioners’ expert, concluding that petitioners’ land was worth only $691 if it was unbuildable.
The Oregon Department of Forestry reviewed petitioners’ expert’s report and concluded that its forest capability predictions were inconsistent with the department’s data and that the projected figures were not based on the productive potential of petitioners’ land. The county’s forester surveyed petitioners’ land and estimated that 24 acres could be used for timber production and that the amount of timber on petitioners’ land was almost three times as much as had been estimated by petitioners’ expert. The forester concluded that, even after deducting reforestation costs, petitioners could get at least $10,000 from the sale of the timber on their land alone.
LUBA found:
“It appears that the property has some limitations for forest use, but can produce a net profit if properly managed for timber production. The limited value of the existing timber as well as the lesser value ascribed to the future timber production potential of the property by petitioners’ expert appears to have as much to do with past deficiencies in forest management and limited forest management projected in
the future, as with the inherent limitations of the property.”
Dodd v. Hood River County, supra,
22 Or LUBA at 732.
LUBA affirmed the county’s decision, concluding that the denial did not constitute a “taking” under Article I, section 18.
Id.
at 711. Petitioners sought judicial review in the Court of Appeals.
The Court of Appeals affirmed LUBA’s decision, stating that petitioners had lost nothing except the ability to build a dwelling, and nothing was obtained by anyone else. The court stated that the only question petitioners could present was “whether the denial amounted to a regulatory taking under the standard articulated in
Fifth Avenue Corp. [v. Washington County,
282 Or 591, 609, 581 P2d 50 (1978) (property is not taken where zoning regulation allows landowner some ‘substantial beneficial use’ of property)].” 115 Or App at 142-43. The court held that LUBA’s conclusion from the record — that the forest use petitioners may conduct on their property had a potential value of at least $10,000 — was enough for “a substantial beneficial use ofthe property to exist.”
Id.
at 143. The court rejected petitioners’ argument that, because dwellings are permitted on other parcels in the same zone, the county’s regulation does not advance a legitimate governmental interest:
“The law of non-conforming uses is well-established in Oregon, and it promotes the value of allowing owners to continue uses of property that were lawful when they were established but that later legislation would restrict or preclude. Petitioners’] * * * argument seems to posit that the government cannot have more than one legitimate interest that has some bearing on the same object. There is nothing inconsistent in the simultaneous protection of pre-existing property rights and of resources that are the subject of new regulation.” 115 Or App at 143-44.
In sum, the Court of Appeals rejected all of petitioners’ assignments that challenged LUBA’s ruling on the Article I, section 18, issues.
Id.
at 144. We allowed review.
On review, petitioners argue (1) that LUBA’s findings of fact are not supported by substantial evidence in the record, (2) that LUBA erred in concluding that their land was not “taken” by the county in violation of Article I, section 18,
and (3) that LUBA erred in concluding that the county had not taken a “conservation easement” in their land.
Petitioners first argue that substantial evidence does not support a finding that their property is worth more than $691, the current net value of the property established by petitioners’ expert. Substantial evidence exists to support a finding of fact when the record, viewed as a whole, would permit a reasonable person to make that finding. ORS 183.482(8)(c);
Younger v. City of Portland,
305 Or 346, 351-52, 752 P2d 262 (1988). The “substantial evidence” inquiry necessarily is case specific.
Reguero v. Teacher Standards and Practices,
312 Or 402, 417-18, 822 P2d 1171 (1991).
LUBA apparently concluded, based on the record, that there existed substantial evidence for finding that
petitioners’ property (or the timber on that property) had a potential value of at least $10,000. Petitioners argue that the evidence of the state Department of Forestry and the county’s forester is merely “junk science,” and they assert that acceptance of that evidence is contrary to this court’s admonition in
1000 Friends of Oregon v. LCDC (Lane Co.),
305 Or 384, 405, 752 P2d 271 (1988), that a “county cannot expect that any unsupported assertion that is entered in the record can be used to justify a planning decision.”
1000 Friends,
however, involved mere assertions in a letter from a representative of a land owners association, and “nothing in the letter [indicated] that the author or the association had background or evidence to support the assertions.”
Id.
at 404. The evidence in this case was far more substantial.
According to the Department of Forestry, citing a USDA Soil Conservation Service study of Hood River County from 1981, petitioners’ expert’s estimate was incorrect. The county’s forester based his estimate on a review of the area from the ground and from aerial photographs. He made detailed findings about the timber on petitioners’ land, as well as conclusions as to its value. His estimate of value was based on recent timber sales in Hood River County, and he provided specific information about those sales. He estimated that there are 24 acres that could be used for forest production.
LUBA’s evaluation of the “substantiality of evidence supporting a decision must consider all the evidence in the record.”
Younger v. City of Portland, supra,
305 Or at 358. LUBA considered the information presented by petitioners’ expert, as well as that provided by the county. LUBA used all that information in concluding that petitioners’ land “has some limitations for forest use, but can produce a net profit.”
Dodd v. Hood River County, supra,
22 Or LUBA at 732. We conclude that the record, viewed as a whole, would permit a reasonable person to make that finding and, therefore, that substantial evidence supported LUBA’s factual findings.
Petitioners next argue that the county has “taken” their land under Article I, section 18, because it no longer has any substantial beneficial use. Relying on language in
Suess Builders Co. v. City of Beaverton,
294 Or 254, 656 P2d 306 (1982), and
Fifth Avenue Corp. v. Washington County, supra,
petitioners assert that this court has interpreted Article I,
section 18, to provide less protection of private property than currently is provided by the Fifth Amendment.
They urge this court to “recast” its Article I, section 18, “takings” analysis in order to provide greater protection under the state constitution. As noted,
supra,
note 2, petitioners make no federal constitutional claims in this case. In
Suess Builders,
this court stated:
“Although the basic thrust of the fifth amendment and art I, § 18, is generally the same, * * *, the criteria of compensable ‘taking for public use’ under art I, § 18, are not necessarily identical to those pronounced from time to time by the United States Supreme Court under the fifth amendment.” 294 Or at 259 n 5 (citations omitted).
Petitioners and the county have relied on the following test found in
Fifth Avenue
to determine whether there has been a taking in this case under Article I, section 18:
‘ ‘ [E] ven if planning or zoning designates land for a public use and thereby effects some diminution in value of his land, the owner is not entitled to compensation for inverse condemnation unless: (1) he is precluded from
all economically feasible private uses
pending eventual taking for public use; or (2) the designation results in such governmental intrusion as to inflict virtually irreversible damage.” 282 Or at 614 (emphasis added).
That test, however, is to be applied only in cases where the zoning decision is made in contemplation of the eventual taking of private property for public use. Unlike both
Suess Builders
and
Fifth Avenue,
this case does not involve an eventual taking of property for public use. Rather, this case involves zoning regulations that expressly limit the uses that may be made of petitioners’ property. In such a case,
Fifth Avenue
recognized a different test:
“[T]he trial court’s ruling, based on the fact that the complaint showed on its face that the ‘down zoning’ involved did not deprive plaintiff of all substantial beneficial use of its property, was correct. Where a zoning designation allows a landowner
some substantial beneficial use
of his property, the landowner is not deprived of his property nor is his property ‘taken.’ Such a loss, if any, is ‘damnum absque injuria.’ ” 282 Or at 609 (emphasis added).
Because this case does not involve a taking for public use, we decline to review the federal “taking for public use” cases relied on by petitioners to determine whether the state or the federal constitution offers a property owner greater protection.
We conclude that the county and LUBA applied the proper test in this case,
i.e.,
whether the county’s zoning ordinances allowed petitioners “some substantial beneficial use” of their property.
We next consider petitioners’ argument that the extent to which a regulation has interfered with ‘ ‘investment-backed expectations” is relevant to any takings analysis. Petitioners rely on
Lucas v. South Carolina Coastal Council,
505 US_, 112 S Ct 2886, 120 L Ed 2d 798 (1992) as support for that proposition.
In
Lucas,
the plaintiff purchased land for residential development, but the state’s later enactment of a Beachfront Management Act rendered the plaintiffs land valueless
by
prohibiting all development.
120 L Ed 2d at 807.
The Supreme Court held that, where “the State seeks to sustain regulation that deprives land of all economically beneficial use, we think it may resist compensation only if the logically antecedent inquiry into the nature of the owner’s estate shows that the proscribed use interests were not part of his title to begin with.” 120 L Ed 2d at 820. In
dictum, Lucas
speculated in several footnotes about what a takings analysis might be in other circumstances:
“When, for example, a regulation requires a developer to leave 90% of a rural tract in its natural state, it is unclear whether we would analyze the situation as one in which the owner has been deprived of all economically beneficial use of the burdened portion of the tract, or as one in which the owner has suffered a mere diminution in value of the tract as a whole. * * * In any event, we avoid this difficulty in the present case, since * * * [the statute at issue] left each of Lucas’s beachfront lots without economic value.” 120 L Ed 2d at 813-14 n 7.
“Justice Stevens [in his dissent] criticizes the ‘deprivation of all economically beneficial use’ rule as ‘wholly arbitrary’, in that ‘[the] landowner whose property is diminished in value 95% recovers nothing,’ while the landowner who suffers a complete elimination of value ‘recovers the land’s full value.’ This analysis errs in its assumption that the landowner whose deprivation is one step short of complete is not entitled to compensation. Such an owner might not be able to claim the benefit of our categorical formulation, but as we have acknowledged time and again, ‘[t]he economic impact of the regulation on the claimant and * * * the extent to which the regulation has interfered with distinct investment-backed expectations’ are keenly relevant to takings analysis generally. It is true that in at least
some cases
the landowner with 95% loss will get nothing, while the landowner with total loss will recover in full. * * * Takings law is full of these ‘all or nothing’ situations.” 120 L Ed 2d at 815 n 8 (emphasis in original; citations omitted).
Petitioners here take that
dictum
as an invitation to challenge zoning where
less than all
beneficial use is taken.
The Supreme Court’s speculation in
dictum
about what it might do in different circumstances falls far short of indicating that the Fifth Amendment provides greater protection to property owners than does Article I, section 18, where less than all beneficial use of property is taken. In
Lucas,
the state chose not to contest the land owner’s allegation that his land had been stripped of
all economically beneficial use.
The test set forth in
Fifth Avenue
provides that there is no taking if the land owner retains “some substantial beneficial use” of the property. If all economically beneficial use had been taken,
a fortiori,
no substantial beneficial use remains.
Petitioners argue that, in view of the purchase price of $33,000, their land’s potential to produce $10,000 from timber sales does not leave them with a substantial beneficial use. Petitioners claim that exclusion of the purchase price from the analysis excludes the “investment-backed expectations” factor that is a part of federal taking analysis.
See Lucas v. South Carolina Coastal Council, supra,
120 L Ed 2d at 815 n 8
(dictum)
(extent to which regulation interferes with investment-backed expectations is relevant to taking analysis under Fifth Amendment). It is true that LUBA attached “no particular significance to the purchase price of the property in this case. ’ ’
Dodd v. Hood River County, supra,
22 Or LUBA at 732. However, LUBA’s reason for doing so was not because LUBA concluded that investment-backed expectations are necessarily irrelevant, but because LUBA found that petitioners “at the very least had constructive notice at the time the property was purchased that approval of a dwelling on the property might be denied under the necessary and accessoiy to [forest use] standard.”
Id.
This court has never held that investment-backed expectations are part of any Article I, section 18, taking analysis.
See Suess Builders v. City of Beaverton, supra,
294 Or at 259 n 5. Moreover, this court has questioned “whether
such [investment-backed] expectations [, even if considered,] should take account of governmental power to change the laws.”
Id. Even
¿/reasonable investment-backed expectations are a legitimate factor to be considered in takings analyses under Article I, section 18, an issue that we specifically do not decide here, we believe that the result in this case would be the same, because, under these circumstances, any investment-backed expectations petitioners may have had were not reasonable.
To be reasonable, investment-backed expectations must take into account the current state of the law, as well as the government’s power to change the law. This court has noted,
“Business invests with knowledge of such governmental power to make laws for its conduct, and the balancing of regulatory goals against their economic consequences is the daily stuff of politics rather than of litigation for ‘just compensation.’ ”
Id.
at 259.
When petitioners in this case bought their land, it already was zoned for forest use and LCDC Goal
4
was in place and had been interpreted as limiting uses of such property to those necessary and accessory to a forest use.
Lamb v. Lane County,
7 Or LUBA 137, 143 (1983). Throughout the state, counties were working to bring their ordinances into compliance with LCDC’s goals. Meanwhile, where local unacknowledged land use regulations, such as the county’s earlier zoning ordinance here, conflicted with the goals, land use decisions were to be made in compliance with LCDC goals.
Former
ORS 197.175(2);
see Alexanderson v. Polk County Commissioners,
289 Or 427, 616 P2d 459 (1980) (illustrating process). We agree with LUBA that, when petitioners bought their land in 1983, they at the very least, had constructive notice as to the pending zoning limitations. It follows that any expectations that petitioners may have had that they had an absolute right to build a dwelling on their land in the future were not reasonable.
We reject in any event petitioners’ argument that a formula for determining whether some substantial beneficial use exists should be a simple comparison of purchase price to potential profits to be made from the allowed use at the time of acquisition of property. On these facts, a use that is capable
of producing $10,000 net profit from timber sales on land purchased for $33,000 certainly constitutes some substantial beneficial use. The evidence before LUBA, therefore, was sufficient for LUBA to find that petitioners retained some substantial beneficial use of their property.
We proceed to consider petitioners’ argument that, because the purpose of the county’s zoning ordinance is to secure public benefits, the restriction on the use of. then-property constitutes the taking of a “conservation easement” in their land. They posit that, because ORS 271.725 provides that a conservation easement may not be taken by eminent domain, the county’s action violated ORS 271.725,
as well as Article I, section 18.
Petitioners assume that zoning for forest use must be carried out under the statutory scheme for acquisition of conservation easements provided by ORS 271.725. We disagree. There is nothing in the legislative history of that statute that indicates the legislature intended to affect zoning laws in the manner suggested by petitioners.
Were such a result intended, we believe it certainly would be discernible from legislative history, if not from the statute itself. We therefore reject petitioners’ argument that the county’s zoning created a conservation easement, over their land or that ORS 271.725 places implicit limitations on the county’s ability to enforce its zoning ordinances.
For purposes of establishing that a conservation easement has been taken, petitioners rely on a passage in
Lucas v. South Carolina Coastal Council, supra,
120 L Ed 2d at 814:
“[A]ffirmatively supporting a compensation requirement, is the fact that regulations that leave the owner of land without economically beneficial or productive options for its use * * * carry with them a heightened risk that private property is being pressed into some form of public service under the guise of mitigating serious public harm.”
Petitioners’ reliance on that passage is misplaced. Whereas the regulation at issue in
Lucas
required that the land be left in its natural state, the county’s zoning ordinance here does not require that petitioners’ land be left substantially in its natural state; numerous forest and agricultural uses are allowed within the F-l zone. Because of the difference between the facts in
Lucas
and those found here, we agree with the Court of Appeals that petitioners’ attempt to recharacterize the county’s action as the taking of a conservation easement should be rejected.
See Dodd v. Hood River County, supra,
115 Or App at 142.
In summary, we conclude that LUBA’s findings of fact are supported by substantial evidence in the record as a whole. We agree with LUBA’s conclusions that petitioners’ land has not been “taken” within the meaning of Article I, section 18, and that the county’s action did not create a “conservation easement” in petitioners’ land. Moreover, we have considered all of petitioners’ assignments of error and every argument thereunder examining the relevant provisions of state law as they existed on the date that petitioners acquired their land, and we conclude that LUBA’s order and the Court of Appeals decision were correct.
The decision of the Court of Appeals is affirmed.