The U.S. Supreme Court does not issue opinions on land use very often. But a 2002 case dealt with land development around Lake Tahoe. The decision was 6-3, and the issue in the case depends on whether you read the majority opinion, or the dissenting opinion. Both opinions are persuasive given the issue each frames, which proves the old adage “if you let me state the issue I’ll win every time.”
In any event, this case discusses the Fifth Amendment to the U.S. Constitution, which prevents government from “taking” private land without compensation. There are two types of takings:
(1) physical, i.e. the actual, physical occupation and possession by the government, and
(2) regulatory, where the landowner is denied the right to realize the value of a tract of land because of governmental regulation.
Cases about physical takings date back to the origination of the Constitution; regulatory takings didn’t exist until a US Supreme Court case in 1922.
Here, the governmental entity in charge of the development of about 500 square miles around Lake Tahoe, known as the Tahoe Regional Planning Agency, imposed a moratorium on all development for about 3 years while it tried to come up with a global land use plan that met all the requirements of its charter (agreed upon by California and Nevada).
Immediately upon completion of the global plan, the district court slapped an injunction on all development because it decided the agency failed to meet the requirements of its charter, which injunction extended the moratorium for about 3 more years. This is where the majority and dissent parted ways. The majority didn’t think this additional three years was important. The dissent looked at the same situation and found a total of about 6 years where a landowner could do nothing on their land. Imagine having a nice tract of land where the government forbid you to build on it for 6 years. Would that feel like a “taking” to you if you owned that land?
Before landing in the U.S. Supreme Court, this case had been to the District Court at least 4 times, and the Court of Appeals 4 times. That the parties in this case were “contentious” is an understatement.
But the Supreme Court did not use this case to break new ground. It simply restated its rule that cases where a plaintiff alleges the government has taken their property via regulations are decided on a case-by-case basis, considering these factors:
(1) the character of the action; and
(2) the nature and extent of the interference with rights in the parcel as a whole.
Anything less than a total taking of an entire parcel must go through this test. In these situations, the courts are to weigh and balance the effect on the land.
The most interesting quote in the majority opinion is the following: “Land use regulations are ubiquitous and most of them impact property values in some tangential way-often in completely unanticipated ways. Treating them all as per se takings would transform government regulation into a luxury few governments could afford.” Ah yes, but wouldn’t it be nice if governments would at least act like it was a luxury to be appreciated and dealt with carefully?
Honorable mention is this quote: “Mere fluctuations in value during the process of governmental decisionmaking, absent extraordinary delay, are ‘incidents of ownership. They cannot be considered as a “taking” in the constitutional sense.’” Just another one of the many benefits of being a landowner.
The dissent, by the way, had no trouble finding that 6 years was a taking, and concluding that the landowners were entitled to compensation.
Tahoe-Sierra Preservation Council v. Tahoe Regional Planning Agency, Case No. 00-1167, US Supreme Court, Decided April 23, 2002