Where We Live: Takings

One reason why we may not be getting the zoning we need.

I try to cover all aspects of sustainability in some way, from work parties to urban design issues to whatever else I can find. I’ve already dropped Arcologies on you, so let’s do “takings”. Why not? I haven’t had enough slings and arrows lately, and besides, I’m feeling wonky and I have something to say. “Takings” is found in the US Constitution’s Fifth Amendment, and is also known as “eminent domain” or “condemnation”. It reads:

“No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.”

That last bit is called the “Takings Clause”. “Private property” is pretty obvious- if a citizen owns it it’s private property. It’s the other parts, “taken”, “public use”, and “compensation”, that are the challenge. The Supreme Court in Kelo v. City of New London even ruled that eminent domain- the official declaration that a piece of property would be condemned for public use and that compensation would be forthcoming- could be used to transfer property to a private developer if the jurisdiction sees significant public gain in the transaction.

Great. No problem. The county decides we need a new sewage treatment plant, decides the best place for it, condemns the private property it needs and compensates the owners so we all gain the benefit of cleaner water and disease prevention. Fine. But that’s not how it usually comes up. Generally we hear about it when somebody’s all upset because they can’t fill a swamp to build a driveway or something.

Now, some people think Property Rights (It always seems capitalized when they say it) are absolute, but it isn’t true and never has been. As explained by Christopher J. Duerksen and Richard J. Roddewig (my emphasis), “…the courts have laid out a number of general principles that should be kept in mind by those wishing to understand the law of takings:

*No one has an absolute right to use his land in a way that may harm the public health or welfare, or that damages the quality of life of neighboring
landowners, or of the community as a whole.

*Historical precedent and recent case law make clear that reasonable land use and environmental regulations will have little trouble withstanding constitutional scrutiny in the vast majority of cases. Only in rare instances will such regulations be deemed so onerous as to effect a "taking" under the Fifth Amendment to the U.S. Constitution, which holds that private property shall not be taken for public use without just compensation.

*Property owners have a right to a reasonable return or use
of their land, but the U.S. Constitution does not guarantee the most profitable

*Courts have upheld a wide variety
of purposes as valid reasons for enacting environmental and land use
regulations--including pollution prevention, resource protection, historic
preservation, design controls, and scenic view protection.

*Communities can legitimately insist that development pay its own way. Land dedications or mandatory exactions are valid, assuming that they are adopted to respond to the demands created by the project.

*The focus of the takings inquiry continues to be on the entire property interest. A severe adverse impact of a regulation on one portion of the property or ownership interest will not amount to a taking if the property as a whole continues to have a reasonable economic use.

Before the 1920s true takings and regulatory takings were pretty clearly defined, but after several big cases it was, ironically, muddier. The upshot was that jurisdictions had a clear right to zone and regulate for many good, public reasons, but that regulation could occasionally go too far. What we’ve seen is a broad redefinition by some people, especially in the western states. They think any regulation at all is a ‘taking’. They’re dead wrong and it's highly damaging. The authors continue (their emphasis)- “Most courts in recent years have assessed the economic impact of a land-use regulation by determining whether the owner is left with a reasonable economic use of the property. Simply denying the so-called "highest and best use" of a property does not give rise to a taking. For example, if a historic building can be rented out profitably, denying the landowner the ability to demolish it to make way for a high-rise office, thereby reducing the parcel's speculative value, does not give rise to a taking.”

That, to me, is a big deal. The government is not in the habit of covering gambling losses. If you go to Las Vegas and lose your bundle, too bad. Yet if you speculate in real estate? Just claim the city put an onerous regulation on your property and voila, you get permitted. No, it’s not quite that easy, but that’s how it often looks. Even the best upzones, codes and regs are challenged, and most jurisdictions just don’t have the budget to continue fighting, so they roll over, settle, and sprawl wins. They either withdraw good restrictions or never propose them at all, knowing they’ll get a fight.

As far as I can see this sets up zero-sum game. If the state’s regulation takes value from your land it owes you the balance, right? But by the same logic and ethics if the state’s action adds value to your land you should be paying! When we build a freeway lots of landowners must be compensated, but what of those whose land is adjacent to the ramps? They’re set to make millions by good luck or speculation, and what provided that benefit should share in the bounty, right? That could level the playing field and free the city up to do the right thing. Now let’s see if any court will go with it.

Karla Fay February 26, 2012 at 07:53 PM
This opinion piece makes absolutely no sense at all since an apples and oranges comparison has been made. Eminent Domain "takings" have absolutely nothing to do with getting the zoning you need. Shoreline, according to the city manager and the leadership team, has too much underdeveloped land already zoned appropriately.
Wendy DiPeso February 28, 2012 at 04:33 AM
I do see the connection: "Simply deny-ing the so-called 'highest and best use' of a property does not give rise to a taking." In Planning Commission meetings I have heard this debated more than once when land owners wanted to put in development unsuitable to the site either because of topography or existing zoning. I thought it was a very interesting and informative article.
Larry Lewis February 28, 2012 at 09:46 PM
Specifically, the ever-present threat of lawsuits sabotages many good efforts at proper zoning because if someone wins one the city/county/state might have to pay bigtime to many owners- which must be paid for out of taxes. I remember being at a land-use hearing years ago on, I think, King County's Critical Areas ordinance, and a woman testified that any change to the land-use code would eliminate the resale value of her property and undermine her retirement. She might have been right, too. The thing is, as sad as her story appeared, it was all speculation! If she'd built her nest-egg in stocks and the market crashed she would have no recourse at all, because the government doesn't cover gambling losses. Perhaps a solution is to have speculators who win out of a regulatory change pay those who lose, though how that would be determined and administered I have no idea.


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