Land Use Prof Blog

Mulvaney's Hectic Week in Takings

In the past week there have been two major state court takings decisions--both involving beachfront property--and a U.S. Supreme Court cert grant in a takings case from the Federal Circuit.  Our erstwhile guest blogger Prof. Tim Mulvaney has a terrific analysis over on the Environmental Prof Blog: A Hectic Week on the Takings Front.  From the post:

For Takings Clause enthusiasts, the past week has proven a busy one.  Two state court decisions out of Texas and New Jersey, coupled with a grant of certiorari at the U.S. Supreme Court, threaten to constrain governmental decision-making at the complex intersection of land and water.

Tim's post discusses the Texas Supreme Court's final decision in Severance v. Patterson; the New Jersey case of Harvey Cedars v. Karan; and the SCOTUS cert grant in Arkansas Game & Fish Comm'n v. U.S.  Exciting times in the takings world.  Read Tim's whole post for a good analysis. 

Matt Festa

Fennell Helps us Picture Takings

One of my (few) disappointments this semester was that I was out of town the day Lee Fennell (Chicago) came to ND Law to present a really interesting paper broadening legal theory's view of resource-allocation-relevant costs beyond the conventional focus on "transaction costs."  I did have the consolation of hearing many terrific papers at the ALPS Conference at Georgetown on the day she presented here in South Bend. Hopefully, that paper, Resource Access Costs, will be finding its way to SSRN and this blog soon.  

In the meantime, she has posted Picturing Takings, 88 Notre Dame L. Rev ___ (forthcoming 2012), an article that makes visual sense of a doctrine that has so successfully defied textual explanatory efforts. Here's the abstract:

Takings doctrine, we are constantly reminded, is unclear to the point of incoherence. The task of finding our way through it has become more difficult, and yet more interesting, with the Supreme Court’s recent, inconclusive foray into the arena of judicial takings in Stop the Beach Renourishment. Following guideposts in Kelo, Lingle, and earlier cases, this essay uses a series of simple diagrams to examine how elements of takings jurisprudence fit together with each other and with other limits on governmental action. Visualizing takings in this manner yields surprising lessons for judicial takings and for takings law more generally. [Note: a PowerPoint version of the diagrams is available on the author's faculty webpage or can be obtained by emailing the author]. 

 I am very hopeful that this article will be helpful not only to my understanding of takings but also to my (first-time) teaching of Land Use Planning next spring. Here is a link to the PowerPoint presentation referred to at the end of the abstract.

Jim K.

Saxer on Managing Water Rights Using Fishing Rights

Shelley Ross Saxer (Pepperdine) has posted Managing Water Rights Using Fishing Rights as a Model, forthcoming in Marquette Law Review Vol. 95 (2011).  The abstract:

This Article addresses the need to view water rights as licenses subject to government revocation, without just compensation, in the same way that fishing rights are viewed as licenses subject to government management. It focuses specifically on the methods used to address water resource allocation in the Sacramento-San Joaquin River Delta in California, and on fish allocation issues in the Pacific Northwest. It explores property rights in water and fish, particularly in regard to Fifth Amendment takings challenges when government regulations diminish water rights and fishing rights. The Article concludes by recognizing that both water and fish resources should be managed as ecosystems and governed by the public trust doctrine, and rejecting private property rights in either fish or water as a violation of the public trust doctrine, in which public resources are given away to private interests.

Matt Festa

Harris on a Railway, a City, and Public Regulation of Private Property

Douglas C. Harris (UBC Faculty of Law) has posted A Railway, a City, and the Public Regulation of Private Property: CPR v. City of Vancouver, published in CANADIAN PROPERTY LAW STORIES, James Muir, Eric Tucker, and Bruce Ziff, eds., Osgoode Society and Irwin Law, 2012.  The abstract:

The doctrine of regulatory or constructive taking establishes limits on the public regulation of private property in much of the common law world. When public regulation becomes unduly onerous — so as, in effect, to take a property interest from a private owner — the public will be required to compensate the owner for its loss. In 2000, the City of Vancouver passed a by-law that limited the use of a century-old rail line to a public thoroughfare. The Canadian Pacific Railway, which owned the line, claimed the regulation amounted to a taking of its property for which the city should pay compensation. The case, which rose to the Supreme Court of Canada in 2006, marked that court’s first engagement with the doctrine of regulatory taking (also known in Canada as de facto expropriation) in nearly twenty years. This chapter explores the intertwined histories of a railway company and a city that gave rise to CPR v. City of Vancouver. It then analyzes the court decisions and considers the role of courts in mediating the appropriate boundary between private property and public regulation in a jurisdiction where there is no constitutional protection for private property.

Matt Festa

Rule on Airspace and the Takings Clause

Troy A. Rule has a very interesting article up: Airspace and the Takings Clause, forthcoming in the Washington University Law Review.  The abstract:

This Article argues that the U.S. Supreme Court’s takings jurisprudence fails to account for instances when public entities restrict private airspace solely to keep it open for their own use. Many landowners rely on open space above adjacent land to preserve scenic views for their properties, to provide sunlight access for their rooftop solar panels, or to serve other uses that require no physical invasion of the neighboring space. Private citizens typically must purchase easements or covenants to prevent their neighbors from erecting trees or buildings that would interfere with these non-physical airspace uses. In contrast, public entities can often secure their non-physical uses of neighboring airspace without having to compensate neighbors by simply imposing height restrictions or other regulations on the space. The Supreme Court’s existing regulatory takings rules, which focus heavily on whether a challenged government action involves physical invasion of the claimant’s property or destroys all economically beneficial use of the property, fail to protect private landowners against these uncompensated takings of negative airspace easements. In recent years, regulations aimed at keeping private airspace open for specific government uses have threatened wind energy developments throughout the country and have even halted major construction projects near the Las Vegas Strip. This Article highlights several situations in which governments can impose height restrictions or other regulations as a way to effectively take negative airspace easements for their own benefit. The Article describes why current regulatory takings rules fail to adequately protect citizens against these situations and advocates a new rule capable of filling this gap in takings law. The new rule would clarify the Supreme Court’s takings jurisprudence as it relates to airspace and would promote more fair and efficient allocations of airspace rights between governments and private citizens.

Troy, our excellent guest blogger, has written before about sun, wind, and air, so this article is coming from one of the emerging experts in property rights above the dirt. 

Matt Festa

Somin on What if Kelo had Gone the Other Way?

Ilya Somin (George Mason) has posted What if Kelo v. City of New London had Gone the Other Way?, published at Indiana Law Review, Vol. 45, No. 1, pp. 21-39, 2011 (What If Counterfactuals in Constitutional History Symposium) .  The abstract:

Kelo v. City of New London is one of the most controversial decisions in U.S. Supreme Court history. The Kelo Court held that the Public Use Clause of the Fifth Amendment allows government to condemn private property and transfer it to other private parties for purposes of “economic development.” This Article considers the question of what might have happened if the Supreme Court decided Kelo v. City of New London in favor of the property owners. Such counterfactual analysis may seem frivolous. But it is, in fact, useful in understanding constitutional history. Any assessment of the impact of a legal decision depends on at least an implicit judgment as to the likely consequences of a ruling the other way. Analysis can be improved by making these implicit counterfactual assumptions clear and systematically considering their implications.

Part I briefly describes the Kelo case and its aftermath, focusing especially on the massive political backlash. That backlash led to numerous new reform laws. However, many of them turned out to be largely symbolic. Part II discusses the potential value of a counterfactual analysis of Kelo. It could help shed light on a longstanding debate over the effects of Supreme Court decisions on society. Some have argued that court decisions have little impact, mostly protecting only those rights that the political branches of government would protect of their own accord. Others contend that this pessimistic view underrates the potential effect of Supreme Court decisions.

Part III considers the possible legal effect of a ruling in favor of the property owners. Such a decision could have taken several potential forms. One possibility is that the Court could have adopted the view advocated by the four Kelo dissenters: that economic development condemnations are categorically forbidden by the Public Use Clause. This would have provided strong protection to property owners and significantly altered the legal landscape. On the other hand, the Court could easily have decided in favor of the property owners on one of two narrower grounds. Such a ruling would have led to much weaker protections for property owners.

Part IV weighs the potential political impact of a decision favoring the property owners. Such an outcome might have forestalled the massive political backlash that Kelo caused. Ironically, a narrow ruling in favor of the owners that did not significantly constrain future takings might have left the cause of property rights worse off than defeat did. On the other hand, a strong ruling categorically banning economic development takings would likely have done more for property rights than the backlash did, especially considering the uneven nature of the latter. Furthermore, political movements sometimes build on legal victories, as well as defeats, as happened in the case of the Civil Rights movement in the wake of Brown v. Board of Education. It is possible that property rights advocates could have similarly exploited a victory in Kelo.

Matt Festa

Salkin on Callies on Regulation in Hawai'i

Patricia Salkin (Albany) has posted a review essay called David L. Callies, Regulating Paradise: Land Use Controls in Hawai’i (2d Ed. 2010) (Book Review), published in The Urban Lawyer, Vol. 43, No. 4, p. 1107, 2011. The abstract:

In 1984, Professor David Callies wrote Regulating Paradise to describe the regulatory scheme in Hawai’i. In 2010, he followed up that book with Regulating Paradise: Land Use Controls in Hawai’i to reexamine the issues as they have developed over the last 25-plus years: housing affordability, the subjects of development agreements, condemnation, defining open space and agricultural lands, takings, cultural sensitivity, environmental assessment, the prevalence of covenanted communities, and redevelopment.

This essay is a review of Professor Callies work which is a must read for anyone involved in land use in Hawaii. What emerges from his work are lingering questions about whether the regulatory scheme has over protected paradise.

Matt Festa

Stein on the Modest Impact of Palazzolo

Gregory M. Stein (Tennessee) has posted The Modest Impact of Palazzolo v. Rhode Island, forthcoming in the Vermont Law Review.  The abstract:

Before 2001, state and federal courts did not agree on the extent to which a property owner’s regulatory takings claim should be weakened by the existence of legal restrictions on her use of the property at the time she acquired it. The Palazzolo Court addressed this doctrinal confusion but did not completely resolve it, offering six opinions that partially contradict each other. Some of this discord has persisted, with Palazzolo already cited in nearly five hundred judicial opinions, and not always consistently.

This Article examines the impact Palazzolo has had on state and lower federal courts. After reviewing the law before Palazzolo and the Supreme Court’s decision in that case, the Article offers suggestions as to how courts ought to interpret the contradictory opinions in Palazzolo. More specifically, cases arising at different points in the ripening process should be treated differently, and only a small subset of takings claims should benefit from Palazzolo’s relaxation of the notice rule.

Next the Article assesses the evidence, in an effort to determine whether courts interpreting Palazzolo have actually been following these suggestions. First, it examines the small number of claims in which an owner that probably would have lost before 2001 prevailed. It then compares these results with the far more numerous cases in which an owner that probably would have lost before 2001 still lost even after that decision.

The Article closes by offering a more generalized assessment of the effects of Palazzolo. It concludes that nearly all of the courts to cite Palazzolo have heeded its requirements, but only a few cases have turned out differently than they would have before 2001. The Court’s ripeness rules dictate that few landowners should benefit from the holding in Palazzolo, and only a small number actually do benefit. Lower courts understand Palazzolo, they have been applying it correctly, and they should continue to do what they have been doing.

Matt Festa

Mulvaney's take on PPL Montana

Prof. Tim Mulvaney has a thoughtful and original analysis of this week's Supreme Court decision in PPL Montana v. Montana, over at the Environmental Law Prof Blog.  From Tim's Post:

Taking a cue from the Stop the Beach plurality, PPL Montana had suggested that the Montana Supreme Court was the “operative force” behind a “land grab” of privately-owned riverbeds, such that the decision itself could be violative of the Takings Clause. Yet the U.S. Supreme Court ultimately did not address this assertion. Still, Justice Kennedy’s opinion in PPL Montana could be viewed as the continuation of a disturbing trend promoted by the Court in Stop the Beach: it represents an implicit, wide-ranging distrust of state courts and a disregard for the principle that property rights are generally determined with reference to state law.

So the Court neglected to use the opportunity to expand on the judicial takings theory espoused in Stop the Beach, and seems to potentially add confusion to the question of federal judicial deference to state-law interpretations of property rights.  I'll add one other preliminary observation about the opinion: by framing the case around the fact question of whether certain riverbeds were navigable or required portage at the time of statehood, the decision highlights the importance of history and historical interpretation to issues of property law.

Matt Festa

NYC Rent Control Laws at Supreme Court?

The case of Harmon v. Markus, currently before the Supreme Court on a petition for cert, is starting to draw some attention.  Among others, George Will devoted his latest column to urging the Court to hear the case in Supreme Court should take on New York City's Rent Control Laws:

James and Jeanne Harmon reside in and supposedly own a five-story brownstone on Manhattan’s Upper West Side, a building that has been in their family since 1949. But they have, so to speak, houseguests who have overstayed their welcome by, in cumulative years, more than a century. They are the tenants — the same tenants — who have been living in the three of the Harmons’ six apartments that are rent controlled.

The Harmons want the Supreme Court to rule that their home has been effectively, and unconstitutionally, taken from them by notably foolish laws that advance no legitimate state interest. The court should.

This “taking” has been accomplished by rent-control laws that cover almost 1 million — approximately half — of the city’s rental apartments. Such laws have existed, with several intervals of sanity, since the “emergency” declared because returning soldiers faced housing shortages caused by a building slowdown during World War I.

This is a tough issue on the equities; rent-control laws (most prominently in New York) are of incredible help to some people and have a very negative effect on others, not only developers, but also (perhaps most especially) would-be entrants-- which is why the politics on this issue are more difficult to track.  Rent control favoring current (and often, inherited) tenants is getting increasingly hard to justify on policy grounds, but as a matter of property law, is it unconstitutional?  Harder to prove on legal doctrine.

Richard Epstein has a podcast on the case for the Federalist Society.  I've been looking for commentaries on the other side but haven't found quite as much; let me know.

Matt Festa

Federal Eminent Domain Reform?

Ilya Somin (George Mason) has a post on the Volokh Conspiracy called Another Chance at Federal Eminent Domain Reform:

In the aftermath of the Supreme Court’s controversial Kelo decision, which allowed the condemnation of private property for economic development, some 44 states have passed eminent domain reform laws. Although many of those laws are likely to be ineffective, overall a good deal of progress has been made at the state level in curbing abusive condemnations, including by state courts enforcing the property rights provisions of their state constitutions.

Unfortunately, very little has been achieved at the federal level during that time. On the third anniversary of Kelo in 2008, I summed up federal reform efforts as follows:

…

…

[Insert sound of crickets chirping, grass growing, and paint drying].

Somin cites an op-ed by Christina Walsh of the Institute of Justice:

A bipartisan bill, H.R. 1433, making its way through the House would strip a city of federal economic development funding for two years if the city takes private property to give to someone else for their private use. Cities that want to keep their funding will have to be more circumspect in using eminent domain.

This bill undoubtedly will pass the House as it did in 2005, and likely will get stalled in the Senate Judiciary Committee, headed by Sen. Patrick J. Leahy, Vermont Democrat, where it has gone to die in years past.

It'll be interesting to see if this goes anywhere, but I suspect there's probably too much political noise this year.

Matt Festa

The Value of Habitat

If the government condemns land that is a habitat for an endangered or threatened species, should the land be valued differently than a developable piece of property in an active real estate market?

  According to the Supreme Court, the default rule is that “just compensation” for condemned is the “fair market value” of the property. United States v. 50 Acres of Land, 469 U.S. 24, 25 (1984).  With regard to habitat land, however, “fair market value” may be very difficult, if not impossible, to ascertain as habitat land, by definition, has been essentially taken off the market.  Despite this diffuculty, there are valuation techniques available that can be used to value habitat land based on market principles.  For example, as suggested by the Uniform Appraisal Standards for Federal Land Acquisitions, one could (1) determine the theoretical best economic use of the habitat land; and (2) then determine how much land used for that purpose would go on the open market.

But it is hard to see how compensation based on a hypothetical use of the land truly constitutes “just compensation.’’  The purpose of using land for habitat conservation is not to make money, but to protect endangered or threatened species.  If this purpose is taken into account, then it could be argued that the only “just compensation” is to replace the habitat.  Under this replacement theory, if the government takes habitat land, the government would have to provide enough money to purchase replacement habitat property.  This is similar to the statutory remedy provided by CERCLA or Superfund, which allows the government to recover natural resource damages including the cost of replacement.  42 U.S.C. § 9607(f)(1) (2006).

 One can certainly imagine scenarios where replacement costs of habitat land could get very expensive.  For example, the government condemns habitat land located in a desolate area Mohave Desert, market value $100,000, and the only available replacement habitat land is a commercially developable parcel land located adjacent to the Las Vegas Strip that is worth $5,000,000.  Would paying for the replacement land in this instance be “just compensation” or merely a windfall for the property owner?  And what if there is no other adequate replacement habitat land?  Would the government be prohibited from taking the property at all?

In the end, how to best value condemned habitat land will vary dependingon the facts of the situation.  One would hope, however, that the government and the courts do not overlook the unique qualities of habitat land when deciding what comprises “just compensation.”

Susan Kraham

Michelman on the Property Clause Question

Frank Michelman (Harvard) has posted "The Property Clause Question."  In this essay, the preeminent property theorist of our time offers an engaging look at the constitutional protection of private property rights that a society seeking to establish a liberal social democracy should consider.  Here's the abstract:

A “property clause” is a dedicated text in the written basic law of a constitutional-democratic state, addressing the question of the security of asset-holdings (and of their values to their owners) against impairment by action or allowance of the state. The clause provides a defensive guarantee against such impairments, in the form of a trumping right of every person to be protected – perhaps not absolutely and unconditionally, but not negligibly, either – against state-engineered losses in lawfully established asset-holdings or asset-values.

How should someone writing a constitution for an expectantly “social liberal” state regime think about the question of a property clause? Without suggesting that there can be any one-size-fits-all sort of answer to the question of including such a clause or not, this paper confines itself to doubting sharply one sort of a reason our constitution-writers might consider for including one – namely, that a liberal constitutional bill of rights ought to contain clauses covering all classes of interests of persons that qualify in liberalism as basic rights and freedoms and the interest distinctively protected by a property clause does so qualify – and suggesting some pros and cons regarding a quite different sort of reason for inclusion that the writers will also undoubtedly ponder – namely, that the clause will serve to keep lawmakers and constitutional adjudicators properly attuned to a national foundational commitment to a system of political economy in which markets play a key role.

This essay, prepared as an after-dinner talk for the Conference on Constitutional Revolutions and Counter-Revolutions held at the New School for Social Research, May 5-7, 2011, is a companion to my “Liberal Constitutionalism, Property Rights, and the Assault on Poverty,” Stellenbosch Law Review (2012) (forthcoming), which treats more expansively some points made summarily here. A version of this essay will appear in Constellations 12 (2012).

Jim K.

Wolf on the Supreme Court and the Environment

Michael Allan Wolf (Florida) has a new book out called The Supreme Court and the Environment: The Reluctant Protector (CQ Press, 2012).  Here's the Amazon blurb:

Silent Spring (1962) can arguable be cited as one of the most influential books of the modern era. This book, along with 1960's rampant activism reacting to high-profile ecological calamities, helped create the modern environmental movement. The Supreme Court and the Environment, written by Michael Wolf, discusses one of this movement's most important legacies, namely the body of federal statutory law amassed to fight pollution and conserve natural resources that began with the enactment of the National Environmental Policy Act of 1969. Instead of taking the more traditional route of listing court decisions, The Supreme Court and the Environment puts the actual cases in a subsidiary position, as part of a larger set of documents paired with incisive introductions that illustrate the fascinating and sometimes surprising give-and-take with Congress, federal administrative agencies, state and local governments, environmental organizations and private companies and industry trade groups that have helped define modern environmental policy.

And for a preview, Prof. Wolf has posted the introduction on SSRN.  The abstract:

This document contains the Introduction and Contents for The Supreme Court and the Environment: The Reluctant Protector (CQ Press/Sage 2012). When one views the body of modern environmental law — the decisions and the other key documents — the picture that emerges is not one of Supreme Court dominance. In this legal drama, the justices have most often played supporting roles. While we can find the occasional, memorable soliloquy in a Supreme Court majority, concurring, or dissenting opinion, the leading men and women are more likely found in Congress, administrative agencies, state and local legislatures, nongovernmental organizations, private industry, and state and lower federal courts.

What one learns from studying the Supreme Court’s environmental law output is that the justices for the most part seem more concerned about more general issues of deference to administrative agencies, the rules of statutory interpretation, the role of legislative history, the requisites for standing, and the nature of the Takings Clause than the narrow issues of entitlement to a clean environment, the notion of an environmental ethic that underlies written statutes and regulations, and concerns about ecological diversity and other environmental values. When we widen the lens, however, and focus on the other documents that make up essential parts of the story of the Supreme Court and the environment — complaints by litigants, briefs by parties and by friends of the court, oral argument transcripts, the occasional stirring dissent, lower court decisions, presidential signing statements and press conference transcripts, media reports and editorials, and legislative responses to high court decisions — we discover what is often missing in the body of Supreme Court decisions.

 Looks fascinating, and is a very original take that situates the cases themselves within a broader context of Supreme Court jurisprudence and goes beyond to the larger networks of actors that shape law.

Matt Festa

Upcoming Oral Argument in PPL Montana, Inc. v. Montana

On Wednesday, the U.S. Supreme Court will hear one of the only cases that touches on property rights scheduled for this Term, PPL Montana, Inc., v. Montana.  Professor Thomas Merrill has posted an excellent preview of the case on SCOTUS blog:

On December 7, the Court will hear argument in PPL Montana, LLC v. Montana. The case is one for history buffs. The question is whether the state of Montana holds title to portions of three riverbeds in the state. The parties agree that the relevant legal test is historical: were the river segments in question part of a waterway that was “navigable in fact” when Montana became a state in 1889? Prominent among the many bits of historical evidence cited are the journals of Meriwether Lewis and William Clark, who explored the rivers in 1805 on their famous expedition.

That's enough to get me excited (seriously).  Go read the rest of Prof. Merrill's informative analysis.  (h/t to our friends at Property Prof Blog for the link).

And don't forget that we had our own pre-preview here at the Land Use Prof Blog, back on the day after the Court granted cert. From guest-blogger Tim Mulvaney's take on SCOTUS cert grant for PPL Montana v. Montana:

In finding that all three rivers at issue met this “navigability for title” test when Montana entered statehood in 1889, the Montana Supreme Court cited to a litany of historical evidence, including the centuries-old journals of Lewis and Clark.  As today’s brief AP story notes, PPL Montana disagreed, pointing “to accounts of the [Lewis and Clark] expedition’s arduous portages of canoes and supplies around waterfalls to argue that the contested stretches of water were not navigable.”  The Montana Supreme Court’s opinion also drew PPL Montana’s ire by considering what the company alleges are flawed contemporary studies, as well as recent recreational uses of certain stretches of the rivers, to support the finding that the rivers are held in total by the state in trust for present and future generations.

One of the foremost experts in natural resources and water law, Professor Rick Frank, notes on Legal Planet that the U.S. Supreme Court has not addressed navigability in the context of state public trust claims for several decades.  How the Supreme Court interprets its time-honored test and identifies what evidence is relevant in its application could have major ramifications for thousands of miles of inland lakes and waterways nationwide.

Should be very interesting.  Stay tuned.

Matt Festa

Somin on Eminent Domain and Mississippi Measure 31

Ilya Somin (George Mason) has an op-ed in Daily Caller about the passage of Mississippi Measure 31, a post-Kelo eminent domain reform measure: Referendum Initiatives Prevent Eminent Domain Abuse.  The intro:

The Supreme Court’s 2005 decision in Kelo v. City of New London generated a record political backlash. Kelo upheld the condemnation of private property for transfer to other private owners in order to promote “economic development.” The case inspired widespread outrage. Polls show that over 80% of the public opposes economic development takings. As a result, 44 states have enacted eminent domain reform laws that restrict the condemnation of property for the benefit of private interests.

The most recent state to react to Kelo is Mississippi. On Tuesday, Mississippi voters adopted Measure 31 by a decisive 73% to 27% margin. The new law will make taking property for economic development unprofitable by forbidding most transfers of condemned land to a private party for 10 years after condemnation. The measure is a major victory for both property owners and the state’s economy.

Somin has also blogged on the measure at the Volokh Conspiracy here and here.  And from the former post, here's a nugget that's relevant to the discussion Ken and I have been having on direct democracy in land use:

As I explain in this article, referendum initiatives like Measure 31 tend to be stronger than reforms adopted by state legislatures because many of them are drafted by activists rather than by politicians. Measure 31 was submitted drafted by the Mississippi Farm Bureau Federation (small farmers are often victims of eminent domain in the state). The vast majority of post–Kelo referenda adopted by voters impose tough restrictions on takings.

More on that to come soon!

Matt Festa

Ballot Box Zoning -- A Response to Festa

OK, I'll bite.  Matt has laid down the gauntlet with his criticism of the initiative process.  This subject is of great importance to land use profs because, at least in many sunbelt states, a good deal of land use policy is made through direct democracy -- so-called "ballot box zoning."  In this post, I want to respond to some of Matt's criticisms and offer a very tentative defense of ballot box zoning.  For those who are interested, I have defended ballot box zoning at greater length (although I ultimately call for its abolition anyway) in this paper.

I must first concede to Matt that the initiative process has serious deficiencies.  He mentions transparency and voter ignorance.  The social science literature confirms that these are major problems.  I would also add a few more: the initiative process is often captured by special interest groups, as money and organizational resources are often decisive in initiative contests; the initiative tends to favor the affluent and well educated, which is not surprising since the affluent and well educated are more likely to vote on initiatives; voters are easily confused by deceptive wording on initiatives, and initiative advocates often deliberately use deceptive terms to confuse voters; the initiative process reduces complex issues to a simplistic yes/no dichotomy in which hyperbolic sound bytes replace rational discourse.  I suppose I could go on, but you get the point.

So what virtues could the initiative process possibly have?  I want to focus specifically on the land use initiative, although some of my comments may be generalizable.  Although it is often asserted that local politics are controlled by homeowners who seek to limit or manage growth, that is generally true only in smaller municipalities.  Sunbelt states like Texas and California, however, have a disproportionate number of medium to large-size municipalities, dubbed "boomburbs" by sociologists Robert Lang and Jennifer LeFurgy.  The larger size of these municipalities gives homeowners less political power.  At the same time, sunbelt boomburbs have often pursued headlong development as a means of economic growth and to overcome fiscal constraints imposed by constitutional or political limitations on raising tax revenue.  Lang and LeFurgy accordingly assert that these municipalities tend to be in thrall to the "growth machine," a matrix of developers and related cohorts who facilitate urban growth.  As I further argue in my paper, the fact that many of these boomburbs use at-large voting structures rather than ward voting systems further enhances the power of developers and dilutes the ability of neighborhood groups to fight development.

Obviously, this system is less than ideal for homeowners.  And let's face it: while we might hate those NIMBYs, they have some pretty good reasons for opposing new growth.  For years it has been national policy to induce Americans to purchase property through a combination of incentives, including low-interest mortgages and municipal zoning ordinances that provide some assurances to homeowners that their property values, and hence their ability to pay off their mortgages, will be protected against unpredictable declines.  New growth and the externalities that accompany it are very likely to diminish property values, and hence prejudice the ability of homeowners to finance what is likely to be by far their most significant asset.  Existing homeowners are in effect subsidizing new growth through diminished property values, and although city officials claim that everyone benefits from new growth, it is often a concentrated group of homeowners alone who must bear a disproportionate degree of the cost.  As I questioned in a previous post, it can even be argued that homeowners have a regulatory takings claim -- but courts have never recognized such a cause of action.

As envisioned by its Progressive-era architects, the initiative is supposed to correct the defects in the ordinary legislative process, particularly the dominance of special interests.  And that is exactly what ballot-box zoning appears to do in the sunbelt states -- the very states where boomburbs, at-large voting and the growth machine dominate the political landscape are also the states where ballot-box zoning is most robust.  Ballot box zoning has proven to be a powerful weapon with which homeowners can fight back against the growth machine, because prevailing on a local initiative requires only a one-time infusion of cash and a constituency that is easily organized and highly motivated -- ie, a group of neighboring homeowners who are all extremely ticked off about land use changes around their neighborhood.  This can counteract the repeat player and other advantages that the developer has in the legislative process.  Granted, the initiative process itself invites special interest abuses and all sorts of other problems, but it seems no less messy or dysfunctional than the system of government it is designed to counterbalance. 

Ken Stahl

Bell on Property in the Third Amendment and the Constitution

Back when I was in law school a few of us would joke around about writing a paper on the Third Amendment, since it hardly ever comes up. But now Tom W. Bell (Chapman) has made it relevant, with 'Property' in the Constitution: The View from the Third Amendment, forthcoming in the William & Mary Bill of Rights Journal, vol. 20 (2012). The abstract:

During World War II, after Japan attacked the Aleutian Islands off Alaska’s coast, the United States forcibly evacuated the islands’ natives and quartered soldiers in private homes. That hitherto unremarked violation of the Third Amendment gives us a fresh perspective on what “Property” means in the U.S. Constitution. As a general legal matter, property includes not just real estate - land, fixtures attached thereto, and related rights - but also various kinds of personal property, ranging from tangibles such as books to intangibles such as causes of action. That knowledge would, if we interpreted the Constitution as we do other legal documents, tell us just about everything we need to know about the scope of constitutional property. Case law and commentary do not speak as plainly, however, raising troubling questions about what “Property” means each of the four times it appears in the Constitution. In particular, some authority suggests that the Takings Clause protects personal property less completely than it does real property. The unjust treatment of Aleutian natives during World War II shows the risk of giving constitutional property so peculiar and narrow a definition. This paper describes the troubling inconsistencies that afflict the law of constitutional property and invokes the Third Amendment, that oft-forgotten relic of the American Revolution, to argue for giving “Property” a plain, generous, and consistent meaning throughout Constitution.

Matt Festa

Takings Jurisprudence, NIMBYS, and Scalia's Hypothetical Highway

After slogging through the Mahon and Penn Central cases (booorrring), it's always a relief to start talking about Lucas v. South Carolina Coastal Council.  The reason is simple: Justice Scalia knows how to keep us entertained.  In particular, Scalia loves to get sassy in his footnotes.  I'm sure readers have their favorites, but one of mine is footnote 8 of the Lucas opinion, which in addition to being enjoyable, is also very illuminating.  I spend about 20 minutes of class time discussing this footnote and its implications for both takings law specifically and land use law more generally, including the intractable NIMBY problem. 

The basic holding of Lucas is that a state regulation that deprives property of all economic value (i.e., a "total wipeout") is a per se taking, subject to a few caveats and exceptions that I'm not going to get into here.  Footnote 8 takes on Justice Stevens's argument, in dissent, that the "total wipeout" rule is arbitrary because the landowner who suffers a 95% wipeout gets no compensation while the landowner who suffers a 100% wipeout gets 100% compensation.  Scalia's response: that result "is no more strange than the landowner whose premises are taken for a highway (who recovers in full) and the landowner whose property is reduced to 5% of its former value  by the highway (who recovers nothing).  Takings law is full of these 'all-or-nothing' situations."  To illustrate this hypothetical, I draw the following picture on the board:

 I then ask my students the question left unanswered by this hypo: why does Owner "A," whose land is taken for the highway, get full compensation, whereas Owner "B", whose land is substantially devalued by the siting of a highway adjacent to his home, get nothing? 

The doctrinal answer is reasonably clear: A has suffered a physical occupation, which is a per se taking under Loretto, whereas B has not, and thus can only bring a takings claim under the Penn Central balancing test.  B is not likely to win under that test, as the government can articulate a substantial public interest in building a new highway and B has only a weak claim that the new highway interferes with any "distinct investment-backed expectations" since he, like the owners of Grand Central, can continue using his property in exactly the manner it has been used before: in my version of the hypo, as a single-family home.

But this then begs another question: why treat the physical occupation so differently from a siting decision with such severe impacts on adjacent landowners?  To answer this, note that my initial drawing is, of course, highly misleading. Externalities rarely involve two isolated landowners.  The following is a more accurate depiction:

The conceivable adverse impacts of the highway (noise, congestion, decreased property values) thus extend far beyond the immediately adjacent owners, even to households outside the frame of the picture depicted here.  If a court were to hold that the diminution in property value suffered by an adjacent landowner were sufficient standing alone to state a compensable takings claim, then any other landowner who could likewise establish that the highway resulted in some decrease in his or her property values would seemingly be entitled to compensation, even if the land in question were located at a considerable remove from the highway and suffered only a de minimis decrease in value.  The potential claimants could number in the dozens or even hundreds.  Courts would be flooded with litigation and be stuck with the unenviable task of determining whose injuries are sufficiently severe to warrant compensation, while legislatures would have to worry that every regulatory intervention would subject them to massive liability for damages. 

Limiting recovery to those who endured a physical occupation seemingly solves these problems.  The class is relatively smaller and more discrete, and there is a fair presumption that a physical occupation has caused some pretty serious injury to the landowner.  So courts are relieved of having to make fine distinctions and legislatures only have to worry about condeming land in the path of the proposed highway.  In other words, the distinction between the owner whose land is taken for a highway and the owner whose land is devalued by the highway has nothing to do with the divergent expectations or quantum of injury necessarily suffered by the two landowners, and everything to do with easing the administrative burden on the legislature and the courts.

This short hypothetical thus brings out a number of important points.  For one thing, it further emphasizes the point, made by the Court in the text of the Lucas opinion, that a "total wipeout" is essentially analogous to a physical occupation because of the presumed extent of the deprivation and the likelihood that a small class of discrete individuals is being singled out to bear a burden that benefits the public generally.  More broadly, the hypo signals the way in which Lucas is self-consciously undertaking a philosophical shift away from Penn Central.  Where Penn Central was comfortable with the indeterminacy of a balancing test for purposes of ensuring equitable treatment in individual cases, Lucas is more concerned with establishing a bright-line rule that provides certainty and eases administration, even if that rule is somewhat arbitrary and sacrifices fairness in some circumstances (the landowner whose land is taken for a highway is compensated in full, whereas his neighbor gets nothing for a 95% diminution in property value). 

This hypo also illustrates the extent to which takings law -- and land use law generally -- favors developers and users of land as opposed to those with an interest in the non-use of land.  The Court's analogy between a total wipeout and a physical occupation elides something important -- in the latter, the landowner has suffered a loss of the right to exclude, that most essential stick in the bundle of rights we call property, whereas in the former, the landowner still has the right to exclude, but has lost the right to develop.  Scalia seems to be suggesting, therefore, that the right to develop is itself also an essential stick in the property rights bundle.  This is consistent with Scalia's approach in other takings cases, such as Nollan, which expresses a concern about legislatures extorting developers in exchange for the right to exercise their right to develop.  At the same time, the highway hypothetical makes clear that landowners with an interest in the non-use of neighboring land (i.e., NIMBYS) are not protected by takings law for all the reasons stated above.

NIMBYs could conceivably be protected against unwanted land use sitings, zoning changes, etc, by the Penn Central test.  In principle, NIMBYs could make a strong case that they have "distinct investment backed expectations" in maintaining the status quo: 1) homeowners purchase property priced at a certain value, and take out a mortgage to finance such purchase, in reliance upon existing zoning regulations and land use patterns, which are capitalized into home prices; 2) zoning regulations are specifically designed to induce such reliance in order to attract homeowners who will contribute to the tax base; 3) a change in zoning or other authorized land use change depresses home values, while the principal on the mortgage remains unchanged, thus seriously prejudicing homeowners. 

In reality, this argument has had little force.  In takings and other contexts, courts insist that homeowners have no "vested rights" in existing zoning.  Only developers, it seems, can have "distinct investment backed expectations."  (In the takings context, I recognize, this may be because the initial zoning regulation upon which homeowners relied has actually increased home values, so it can hardly be called a "taking" to simply take back part of what has been given.  But even if so, it would seem as though homeowners should have some state law cause of action for their expectations based on vested rights, NCU, or zoning estoppel).  There are, I think, three reasons why the law so favors developers.  First, as mentioned above, there is that problem of the administrative burden of dealing with innumerable NIMBY claims.  Second, there is the traditional Lockean preference for the productive use of land, which is of course a very scarce resource, as opposed to its non-use.  Finally, there may also be a public choice rationale at work here.  As William Fischel and others claim, NIMBY homeowners tend to be the dominant faction in most municipalities, while developers are reduced to the status of supplicants.  If that claim is true, then it is perfectly sensible that courts would favor the interests of politically disadvantaged developers while leaving NIMBYs to the political process where they are typically very successful. 

This public choice rationale, however, raises some questions.  The assumption that NIMBYs are all-powerful and developers powerless has been forcefully challenged, and the empirical evidence appears to show that, at least in larger municipalities, developers are quite powerful.  Another question, with which I close this long post, is of the "chicken-or-the-egg" variety.  Do courts favor developers because homeowners are disproportionately powerful in local politics, or are homeowners disproportionately powerful because the absence of a legal remedy for their grievances gives them a strong incentive to be politically active?  As I mentioned above, the "expectations" inquiry is circular because courts do not only respond to expectations, but also shape them.  Is it possible that the reason angry mobs of NIMBYs pack planning board meetings to oppose zoning changes, and the reason they perceive the deck to be stacked against them despite their power in the political process, is because the courts have traditionally favored the claims of developers and told NIMBYs to seek relief elsewhere?

 

Ken Stahl 

Epstein on Judicial Takings in a Federalist System

Richard Epstein (NYU) has written Littoral Rights under the Takings Doctrine: the Clash between the Ius Naturale and Stop the Beach Renourishment, 6 Duke J. Const. L & Pub. Policy 37 (2011). He begins with the point that, due to the self-contradictory nature of judicial takings in a unitary court system, "the doctrine of judicial takings can, in practice, only arise in a federalist system." He goes on to argue for an appropriate deployment of centralized, federal oversight of state courts in defense of age-old, decentralized ius naturale. He sees Stop the Beach as a missed opportunity to invalidate years of Florida precedent as well as the Preservation Act that occasioned the controversy. He concludes that application of the judicial takings doctrine "should be limited to those circumstances in which the decided cases make a radical break from well-established common law patterns that systematically work for the advantage of the state or some identifiable private faction."

This article was published as part of a symposium on judicial takings that also included papers by Ilya Somin and Nestor Davidson.

Jim K.