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by Ann Alexander, Fred Clark, Fred Krueger, and Stan LeQuire


The term "takings" has its origins in the "Takings Clause" of the Fifth Amendment to the United States Constitution, which states, "private property shall not be taken for public use without just compensation." This element of the Constitution's Bill of Rights prohibits the government from seizing private property without paying its owner for it at a fair market price. For example, if a state needs to acquire a piece of privately-owned property to connect two sections of highway or railway, it must pay for that property.

The Takings Clause did not become a centerpiece of controversy until very recently. For most of our nation's history, the Clause was largely understood to apply to situations where the government physically appropriated property, and was generally not interpreted to mean that government regulation of private property could be the same as the actual "taking" of it requiring compensation. State and local governments have always regulated the use of land to ensure that communities are livable -- for example, through zoning regulations that prevent someone from building a foul-smelling factory next to someone's home -- and the Fifth Amendment was not viewed as requiring that owners of the regulated property be compensated for denial of permission to build the factory. For instance, when the City of Los Angeles in the early part of this century banned brick making in residential areas because of the resulting "fumes, gases, smoke, soot, steam and dust" the United States Supreme Court rejected an argument by the owner of a brick making factory that the reduction in the value of his property was a "taking." The Court held that the city had the responsibility to protect its citizens, and pointed out that the property still had value for other uses.

The Supreme Court has recently revisited this traditionally narrow interpretation of the Takings Clause in view of the growing body of environmental laws that have been enacted since the 1970s. In response to public concern over unchecked threats to public health and the environment, federal, state, and local governments have in the past three decades put in place a broad range of protective laws and regulations, such as the Endangered Species Act and the wetlands provisions in the Clean Water Act. These laws, which protect threatened environments by limiting activities that would destroy them, by definition limit the ability of property owners to maximize the profit-making potential of their property by restricting development, logging, or other economic uses of land. Arguments have been made to the Supreme Court that when property values are diminished in this manner by governmental regulation, the owners should be compensated for their economic loss just as they would be if the government took their land outright.

Having considered these arguments, the Supreme Court determined in a recent series of decisions that the Takings Clause does, in fact, require compensation in certain cases where environmental laws have diminished property values. It held that the government must pay landowners for their lost value in essentially three situations: when the government physically takes land (for instance, to build a highway); when a governmental regulation causes land to lose virtually all of its value (for instance, where a wetlands regulation prohibits any development whatsoever); and when the government demands that landowners use their land in certain ways as a condition of receiving a permit (for instance, to build something in a flood plain), where the demands are unrelated to the permit itself.

Property rights movement advocates take the position that even this expanded interpretation of the Takings Clause is insufficiently protective of land owners. They have, in addition to battling in court for a more expansive reading of the Takings Clause, proposed federal and state legislation that would go substantially beyond the Supreme Court's interpretation in requiring compensation. These proposals have generally stated that whenever an environmental or land use regulation diminishes the value of a parcel of property by a specified, usually modest amount -- in many cases 33 percent -- that reduction constitutes a taking requiring compensation from the government. While the most recent takings legislation proposed in Congress was defeated, the property rights advocates have called for its re-introduction, and have introduced many comparable proposals in state legislatures.

Environmental groups have fought these proposals on the ground that they would, as a practical matter, make many environmental laws so expensive as to be unenforceable. They point out that compensation of every private landowner every time a regulation decreased the land's value would cost an astronomical amount of money, potentially in the hundreds of billions of dollars. They estimate that the bureaucratic cost alone of evaluating the changing value of land to determine the appropriate level of compensation would be in the tens of millions of dollars in every state per year. Since these immense expenditures are entirely unaffordable, they state, enforcement of many environmental laws would have to be drastically curtailed or outright eliminated.

LandWatch's mission is to protect Monterey County's future by addressing climate change, community health, and social inequities in housing and infrastructure. By encouraging greater public participation in planning, we connect people to government, address human needs and inspire conservation of natural resources.



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