How CRC Promotes Smart Growth And Livable Communities

Remarks before the Loudoun Planning Commission
September 28, 2000
Takings and Property Rights  

Thank you.  I am delighted to be here tonight.  I am Tim Dowling, Chief Counsel of Community Rights Counsel.  We are a public interest law firm that helps cities and counties defend land use controls and other community protections, with a special focus on challenges brought under the Takings Clause of the Fifth Amendment.

My message to you tonight is a simple one:  The U.S. Constitution, and in particular Takings Clause, does not stand in the way of reasonable smart-growth initiatives and other reasonable land use controls. 

Let me begin by emphasizing that most of my remarks tonight will focus on the Takings Clause of the federal Constitution.  Virginia law might raise other issues, and the Planning Commission and County Board need to work closely with the County attorneys and other experts in that area. 

But I think it's helpful to focus on the Takings Clause.  It often looms like the 800-pound gorilla in the debate over smart growth and property rights.  As far as the Takings Clause is concerned, the news is good news for the County.

You may be hearing a different message from developers.  More and more, developers and other landowners are attempting to use takings litigation -- or the mere threat of takings litigation -- to persuade government officials to relax or abandon land use controls and other community protections.  Developer voices are amplified by the so-called "property rights" movement, which argues for an aggressive application of the Takings Clause to curtail government regulation.  Some recent rulings in favor of takings claimants by the U.S. Supreme Court add to the perception that local governments risk takings liability when they act to protect our neighborhoods and natural environment.  As a result, the fear of large compensation awards sometimes has a chilling effect on those charged with protecting our communities from harmful land use. 

The perceived risk of takings liability is more myth than reality.  In a 1973 treatise published by the Council on Environmental Quality called The Taking Issue, the authors wrote: "Since the 'myth' of the taking clause assumes that less can be regulated than the court decisions actually permit, many local governments fail to exercise their powers -- or if they do, they back down easily when challenged."

Unfortunately, the myth is still with us today.  With a proper understanding of takings law, however, community officials may strike a reasonable balance between private property rights and community interests without risking a debilitating compensation award under the Takings Clause. 

Consider the text of the Takings Clause.  Its wording is quite narrow.  By its terms, the Clause applies only when property is "taken" by the government.  Although the Constitution does not define the term "taken," it most naturally refers to a physical appropriation (or expropriation) of property.  In other words, the text of the Takings Clause does not readily suggest application to mere restrictions on the use of property.  If you tell a child not to play with a ball in the house, you have regulated the use of the ball, but you have not taken the ball away.

The Framers' original understanding of the Takings Clause was consistent with its narrow plain meaning.   For example, Benjamin Franklin wrote:  "Private property therefore is a creature of society, and is subject to the calls of that society, whenever its necessities shall require it, even to its last farthing; its contributions therefore to the public exigencies are not to be considered as conferring a benefit on the public, entitling the contributors to the distinctions of honour and power, but as the return of an obligation previously received, or the payment of a just debt."

Colonial America included land use controls remarkably similar to modern smart growth initiatives.  The Massachusetts Bay colony prohibited dwellings more than one-half mile from town meeting houses.  Connecticut has laws designed to prevent the depopulation of towns.  Other colonial land use laws that controlled the sequence of new development, much as modern smart growth initiatives seek to avoid leapfrog development. 

A century later, President Theodore Roosevelt echoed this sentiment, stating:  quote "[E]very man holds his property subject to the general right of the community to regulate its use to whatever degree the public welfare may require it."

Supreme Court interpretations of the Takings Clause for the first 130 years bear this out.  For example, in 1870 the Supreme Court stated:

[The Takings Clause] has always been understood as referring only to a direct appropriation, and not to consequential injuries resulting from the exercise of lawful power.  It has never been supposed to have any bearing upon, or to inhibit laws that indirectly work harm and loss to individuals.

[Legal Tender Cases, 79 U.S. (12 Wall.) 457, 551-52 (1870).]

Now, don't get me wrong, it has been crystal clear since the landmark 1922 ruling in Pennsylvania Coal vs Mahon that land use regulation may result in a compensable taking under the Constitution.  But we must remember that the Takings Clause is limited to takings, and that the physical appropriation of property remains an important point of reference in deciding whether a land use restriction constitutes a taking.  Indeed, in the landmark Mahon ruling, the Court held that the law at issue was unconstitutional because it had "very nearly the same effect for constitutional purposes as appropriating" private property. 

This theme is a mainstay of takings jurisprudence in the courts.  For example, in the 1992  Lucas ruling, the Supreme Court held that a taking might occur where regulation denies all economically viable use of land because such regulation is, "from the landowner's point of view, the equivalent of a physical appropriation."  The Court also has held that physical occupations are takings where they "'constitute an actual, permanent invasion of the land, amounting to an appropriation of, and not merely an injury to, the property."   Indeed, in a 1985 case called Williamson County v. Hamilton Bank, the Court stated that in regulatory takings cases, its task is "to distinguish the point at which regulation becomes so onerous that it has the same effect as an appropriation of the property through eminent domain or physical possession."

Not surprisingly, it takes "extreme circumstances" for land use regulation to rise to this level.  In 1993, in a case called Concrete Pipe, the Supreme Court emphasized that "mere diminution in the value of property, however, serious, is insufficient to demonstrate a taking," and it refused to find a taking despite an alleged 46% loss in value of the claimants' property value."  In a landmark zoning case back in the 1920 called Village of Euclid v. Ambler Reality Co., the Court upheld zoning restrictions even though they resulted in a 75% loss in property value.  And in a 1915 case, the Court rejected a takings challenge to mining restrictions even though they resulted in a 92% loss in property value. 

The Virginia Supreme Court reached a similar conclusion in the 1997 Omni Homes case out of Prince William County, ruling that "the loss of the ability to develop or use land as originally intended is not a categorical taking if another economic use for the land is available, even if the value of the use is less than the value attached to the owner's desired use.  The Omni Homes Court also concluded that in the absence of a vested right, a landowner is not entitled to rely on the continuation of its existing zoning, which is subject to the government's power to protect the public interest.  Although the challenged government action reduced property values by almost a third, the Virginia Supreme Court found no taking.

In the only U.S. Supreme Court case to use the phrase "urban sprawl," the Court gave smart growth a ringing endorsement, stating that it has "long been recognized as legitimate for local governments to discourage the premature and unnecessary conversion of open-space land to urban uses.   The Court made clear that cities and counties may use reasonable land use controls to protect against air, noise, and water pollution, traffic congestion, destruction of scenic beauty, disturbance of the ecology and the environment, and other demonstrated consequences of urban sprawl.  Lower courts also have been receptive to local government efforts to fight sprawl.  Smart Growth efforts rarely, if ever, result in the kind of severe economic wipe-out required to constitute a compensable taking under the Fifth Amendment.   Local governments across the nation have implemented urban growth boundaries, cluster zoning, transferable development rights programs, and many other creative, cutting-edge smart growth initiatives without incurring takings liability.  If you build a proper record, work closely with the County Attorney and other land use experts, avoid unduly severe economic hardships, and proceed in a fair and equitable manner, you should prevail in court.

Developers often argue that they have a constitutional right to develop, in other words, an absolute, constitutional right to build on property. Developers often argue that they have a constitutional right to develop, in other words, an absolute, constitutional right to build on property. But there is no such constitutional right.  In the 1994 Dolan case, the Court referred to a development permit as "a discretionary benefit," in other words, something left to the discretion of the municipality, not compelled by the Constitution.  For example, counties may and do adopt agricultural zoning ordinances with no right to build houses or commercial buildings.  So long as the agricultural zoning does not approach a denial of all economically viable use of the land, there is no taking under the Fifth Amendment.

What about the recent landowner victories in the United States Supreme Court in takings cases? Well, if you look closely at those cases, you'll see that the landowner victories were extremely narrow and based on facts that rarely arise.  In the 1992 Lucas case, which involved beachfront property in South Carolina, the Court found a taking because the challenged regulation completely extinguished the value of Mr. Lucas's property.  The paper that Mr. Minchew circulated in preparation for tonight's meeting accurately concludes that such total deprivations are incredibly rare in land use regulation.  The 1994 Dolan case out of Oregon, and the related Nollan case out of California , involved government-compelled dedications of property to the public.  They hold only that such dedications must be logically related to a legitimate public purpose and roughly proportional to the harm threatened by the proposed land use.  Other cases, including last year's ruling in the Del Monte Dunes case, involved procedural issues and do not expand the standards for government liability under the Takings Clause.

The development community often ignores the specific rulings in these cases, preferring instead to quote isolated portions to mount a rhetorical campaign against land use controls. One favorite developer quote -- you may hear it here tonight -- is a passage from the Dolan case in which the Court says that the Takings Clause is as much a part of the Bill of Rights as other important amendments and should not be treated like a quote "poor relation." 

Well, of course it shouldn't. No one disputes that the Fifth Amendment is a part of the Bill of Rights and worthy of profound respect.  But the Court has made clear that the Takings Clause is different from most constitutional provisions. It does not prohibit government conduct like the First and Fourth Amendments, but merely conditions certain government action on the payment of just compensation. The Court has never deemed every property right to be a fundamental right on a par with free speech rights or other fundamental constitutional rights.  On the contrary, the Dolan Court itself emphasized that land use planning is a "necessary" and "commendable task," and that the Takings Clause serves only as an "outer limit" on the government's ability to protect the public interest. Every constitutional provision should be applied within its appropriate scope.  The Takings Clause is no poor relation, but neither is it a rich uncle entitled to expansion beyond its proper limits.

Smart growth initiatives raise a number of thorny issues that require careful consideration. Loudoun County should ensure that it is doing its fair share to provide for affordable housing.  County officials should make clear that smart growth plans will not be co-opted by those who wish to exclude immigrants, and I was very glad to see the comments from local officials condemning efforts to association smart growth with attacks on immigration. As you know better than I do, smart growth also raises general issues of fairness and how to balance individual hardships against the public good.  But generally these fairness issues should be considered and resolved in the political arena, not in the courts.  The fundamental question is "who decides," and my basic message is that, as far as the U.S. Constitution is concerned, these decisions generally fall squarely on your shoulders, not on the courts.

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