Regulatory takings – and givings

One of the favorite targets of those who are concerned with protecting private property rights is so-call regulatory takings. In Lucas v. South Carolina Costal Council, 505 U.S. 1003 (1992), the U.S. Supreme Court held that a land use regulation which eliminates all economically beneficial uses of a parcel constitutes a taking and just compensation must be paid to the landowner by the jurisdiction that enacted the regulation.

Lots that were the subject of the Lucas case

For property rights advocates the Court did not go far enough; so they have resorted to legislative efforts in numerous states. Some of the more noteworthy measures include those in Oregon, Florida, Arizona, and Texas have enacted measures either legislatively or by referendum that require compensation be paid when a regulation reduces the value of a parcel of property by a state amount (e.g., 25% diminution in Texas). There is a wealth of literature about the effectiveness of these measures, their impact on land use regulation and the lawsuits they have spawned.

Most recently this issues has been raised in Maine where the legislature is wrestling with a proposed regulatory takings bill that would required compensation when 50% or more of a parcel’s value is lost due to regulation.

Delving into all of that is not the purpose of this post. I simply want to ask if landowners should be compensated when a land use regulation diminishes the value of their property, should the state or local jurisdiction be compensated by landowners when they increase zoning densities or construct infrastructure at public cost that increases the value of a private party’s property?

The truth of the matter is that in its natural state the value of most land is attributable to one’s ability to raise crops, harvest timber, harness water power, and extract minerals. In order to make use of land for anything other than extremely low density residential development requires a combination of infrastructure that is usually publicly funded (e.g., roads, sewer, storm water, water, electricity, telecommunications, schools) and regulations that bestow the right to make use of this infrastructure for various land uses and at various densities. All of this focus on how land use regulation may reduce the value (though not render it without economic value) of individual parcels of land loses sight of the forest for the trees as it ignores the fact that much of the value that remains is in fact the result of public investment and public regulation.

Is Agenda 21 really evil?

For those of you who wonder what happened as a result of the U.N.’s Earth Summit in Rio in 1992, Tea Parties will tell you that it launched a global conspiracy against property rights in the form of Agenda 21, a set of policy and program recommendations for national and regional governments to implement to protect the environmental and promote sustainable development. Like all too many well meaning U.N. documents, this one has been largely ignored in the ensuing years though sustainable development remains a favorite approach of planners and environmental advocates around the world.

Michael Shaw is one of those credited with first raising the alarm about Agenda 21 back in the 1990s. More recently the Tea Party has latched on to this issue and has been making appearances at zoning and land use hearings around the country (see examples in TennesseeVirginia and Florida) and to warn of the insidious affect of Agenda 21. Specifically, Tea Party members see a link between Agenda 21 and local actions regarding bike paths, public transit, zoning, conservation easements and smart growth as steps towards undermining private property rights.

The Arizona Legislature, which can always be counted on to be in the forefront on matters like this, has introduced a billthat would prohibit state and local governments from implementing “the creed, doctrine, principles or any tenet” of Agenda 21. One wonders what would be left of land use and environmental planning and regulation in Arizona if this bill were to pass.

This might seem like a tempest in a teapot if you will but recently the Republican National Committee at its 2012 winter meeting adopted a resolution condemning Agenda 21. This resolution will be offered as part of the Republican Party’s platform at its upcoming convention. You ought to take a moment to read it in its entirety but the following passage will give you an idea of the underlying sentiment:

“WHEREAS, this United Nations Agenda 21 plan of radical so-called “sustainable development” views the American way of life of private property ownership, single family homes, private car ownership and individual travel choices, and privately owned farms; all as destructive to the environment . . .”

It’s difficult to know where to begin commenting on something like this. I think it is fair to say this is another reflection of the deep divide there is in this country on a broad spectrum of fundamental issues. As is the case with many of these issues, those in the Tea Party and an increasingly large portion of the GOP would like to return to an earlier, simpler era such as the 1950s. In the case of land use regulation this means ignoring all we have learned about the nature of ecosystems and their relationship to human health and well being. Yet there is a clear track record throughout U.S. history that property rights have been a malleable concept that have adapted to new scientific and technical knowledge in areas such as hydrology, oil and gas geology, air travel, and telecommunications. If it had not, airlines would have been required to purchase air rights easements from each landowner over whose property a plane flew.

The nature of property was at the heart of this country’s founding (though not necessarily in the way popularly imagined) and has been at the foundation of our two greatest failings as a nation – the unwillingness to recognize the very different property regimes of Native Americans and the institution of slavery. It should be no surprise that we continue to struggle as a society with the property balance to strike between individual and collective property rights.