Fact Sheet: Takings and Property Rights

Fact sheet: Takings and Property Rights

"My property rights have been taken!"

Almost every time a city or county adopts a new plan protecting natural resources from suburban or rural sprawl, this claim is made. What is the truth about our property rights? This fact sheet is a summary of an important new report that provides balance in what is often a heated debate.

What’s the "Takings" Issue All About?

For Greenbelt defenders, sound information about property rights and "takings" claims is vitally important to have and to share with elected officials, planners and others. The principles and guidelines outlined below can help clarify what is often a very contentious situation.

Takings occur when land use regulations remove all viable use of a person’s property—a very rare situation. The Fifth Amendment to the U.S. Constitution provides protection against just such an event, by safeguarding the right of an individual to own property and not have it be taken without "just compensation."

The key to the debate is determining when a taking occurs. This issue has become increasingly important because of a national effort by a variety of corporate, landowner and political interests to claim that almost any land use regulation requires government to pay damages to a property owner. This "takings movement" (which grows out of the old "Sagebrush Rebellion" of the 1980s) is opposed to communities’ rights to determine what serves the overall public interest.

Here are commonsense guidelines that can guide people of any viewpoint through the takings thicket:

Basic Principles

No one has an absolute right to use his or her land in a way that may harm the public health or welfare, or that damages the quality of life of neighborhoring landowners, or of the community as a whole.
Historic precedent and recent case law make clear that reasonable land use and environmental regulations will have little trouble withstanding constitutional scrutiny. Only in rare instances will such regulations be so onerous as to effect a "taking."
Courts generally consider all these factors in evaluating individual cases claiming a taking: the economic impact on a landowner; the public purpose of the regulation; and the character of the governmental action. Regulations that serve valid public purposes and leave a property owner with some viable economic use of property will almost always be upheld.
Property owners have a right to reasonable use of the land, but the U.S. Constitution does not guarantee the most profitable use.
Regulations upheld by courts include pollution prevention, protection of wetlands and other resources, historic preservation, design controls and scenic view protection—plus many other purposes.
Communities can legitimately insist that development pay its own way. Land dedications and other exactions are valid, assuming they are adopted to meet demands created by the project.
Before a landowner can assert a legal taking claim, a development plan must be submitted and all administrative avenues of relief must be exhausted.
Takings claims are evaluated on the basis of the entire property interest. Severe adverse impact on one part of a property is not a taking if the whole property has a reasonable economic use.
On the rare occasion that a taking is found by courts to have occurred, the community usually does not have to buy the entire property. Damages are payable only for the time the regulation was in effect.
When writing ordinances and legislation, provision should be made for an administrative process that allows consideration of the effect of the law on an individual landowner and affords the possibility of administrative relief for undue economic hardship.

Putting Principles into Practice

Communities concerned about fairness and balance for all citizens in addressing the takings issue can use these guidelines to protect themselves against potential takings claims:

ESTABLISH A SOUND BASIS FOR LAND-USE AND ENVIRONMENTAL REGULATIONS THROUGH THOROUGH COMPREHENSIVE PLANNING AND BACKGROUND STUDIES. A thoughtful comprehensive plan or program that sets forth overall community goals and objectives and which establishes a rational basis for land-use regulations helps lay the foundation for a strong defense against any takings claim. Likewise, background studies of development and pollution impacts can build a strong foundation for environmental protection measures.
INSTITUTE AN ADMINISTRATIVE PROCESS THAT GIVES DECISION MAKERS ADEQUATE INFORMATION TO APPLY THE TAKINGS BALANCING TEST BY REQUIRING PROPERTY OWNERS TO PRODUCE EVIDENCE OF UNDUE ECONOMIC IMPACT ON THE SUBJECT PROPERTY PRIOR TO FILING A LEGAL ACTION. Much of the guesswork and risk for both the public official and the private landowner can be eliminated from the takings arena, by establishing administrative procedures for handling takings claims and other landowner concerns before they go to court. These administrative procedures should require property owners to support claims by producing relevant information, including an explanation of the property owner’s interest in the property, price paid or option price, terms of purchase or sale, all appraisals of the property, assessed value, tax on the property, offers to purchase, rent, income and expense statements for income-producing property, etc.
ESTABLISH AN ECONOMIC HARDSHIP VARIANCE AND SIMILAR ADMINISTRATIVE RELIEF PROVISIONS THAT ALLOW THE POSSIBILITY OF SOME LEGITIMATE ECONOMICALLY BENEFICIAL USE OF THE PROPERTY IN SITUATIONS WHERE REGULATIONS MAY HAVE AN EXTREME RESULT. These procedures help to avoid conflicts in the first place by allowing for early consideration of alternatives that may be satisfactory to all concerned. However, relief should be granted only upon a positive showing by the owner or applicant that there is no reasonable economic use of the property as witnessed by evidence produced as outlined above. Remember that the landowner has the burden of proof on hardship and takings issues.
TAKE STEPS TO PREVENT THE SUBDIVISION OF LAND IN A WAY THAT MAY CREATE ECONOMICALLY UNUSABLE SUBSTANDARD OR UNBUILDABLE PARCELS. Subdivision controls and zoning ordinances should be carefully reviewed and revised if they permit division of land into small parcels or districts that make development very difficult or impossible -- for example by severing sensitive environmental areas or partial property rights (such as mineral rights) from an otherwise usable parcel. Such self-created hardships should not be permitted to develop into a takings claim.
MAKE DEVELOPMENT PAY ITS FAIR SHARE, BUT ESTABLISH A RATIONAL, EQUITABLE BASIS FOR CALCULATING THE TYPE OF ANY EXACTION, OR THE AMOUNT OF ANY IMPACT FEE. The U.S. Supreme Court has expressly approved the use of development conditions, exactions, and fees, so long as they are tied to specific needs created by a proposed development. The use of nationally accepted standards or studies of actual local government costs attributable to a project may help to establish the need for and appropriateness of such exactions.
AVOID ANY GOVERNMENT INCENTIVES, SUBSIDIES, OR INSURANCE PROGRAMS THAT ENCOURAGE DEVELOPMENT IN SENSITIVE AREAS SUCH AS STEEP SLOPES, FLOODPLAINS, AND OTHER HIGH-HAZARD AREAS. Nothing in the Fifth Amendment requires a government entity to promote the maximum development of a site at the expense of the public purse or to the detriment of the public interest. Taxpayers need not subsidize unwise development. At the same time, consider complements to regulation such as incentive programs that encourage good development, when regulatory approaches cannot alone achieve necessary objectives without severe economic deprivation. While not a legal requirement, such programs can help take the sting out of tough, but necessary, environmental and land use controls.

FOR MORE INFORMATION

Greenbelt Alliance works with the American Resources Information Network (ARIN), a cooperative project of more than 100 organizations interested in ensuring that the public is provided accurate and balanced information on the relationship between private property rights and the public interest. For more information on the takings issue, or to order free copies of the "Plain Talk About Takings" booklet, call ARIN at 1-800-846-2746, or write to POB 33048, Washington DC 20033. ARIN covers current legislation in Congress on takings issues.

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