Oregon 30-Hour Real Estate Law Practice Test

What can homeowners do if downzoning in one area reduces property values in adjacent areas?

1. Nothing; they must accept the decrease.

2. File a claim for inverse condemnation.

3. Request a rezoning opportunity.

4. Sell their property immediately.

The correct answer is: File a claim for inverse condemnation.

Filing a claim for inverse condemnation is a viable option for homeowners affected by downzoning that results in decreased property values in adjacent areas. Inverse condemnation occurs when a government action, such as zoning changes, indirectly deprives property owners of their rights or diminishes the value of their properties without formal condemnation proceedings. This legal concept allows affected homeowners to seek compensation for loss of value incurred as a result of governmental actions that could be seen as a taking. Homeowners can argue that the downzoning effectively restricts their property's potential uses and therefore constitutes an unauthorized taking under the Fifth Amendment, which provides that private property cannot be taken for public use without just compensation. By filing a claim, homeowners aim to be compensated for the financial impact caused by the downzoning decision. Other options may not effectively address the situation. For instance, accepting the decrease does not provide any recourse for compensation or correction. Requesting a rezoning opportunity is also not guaranteed to result in a favorable outcome and involves a process that may take significant time without assurance of change. Selling the property immediately could lock in losses without considering the potential for future recovery or appreciation once zoning issues are addressed. Thus, pursuing a claim for inverse condemnation is the most relevant and effective course of