In a week filled with rulings that received more attention, the Supreme Court also handed down a decision in Koontz vs.St Johns River Water Management District, a multi-decade legal saga over property rights and construction permitting that has implications for environmentalists and sustainable development programs across the country.
Bottom line: property owners won this one.
As reported here at The Source last December, Koontz pitted a Florida owner of wetlands against the local environmental protection district. The blow-by-blow took over twenty years to resolve: developer applies for construction permit, includes offer to place 11 acres of land in a conservation easement, permit withheld unless developer agrees to improve wetlands (culverts, ditches, etc) located some miles away, developer cries foul, claims process constitutes takings under the fifth amendment, heads to local court, state court, Florida Supreme Court, and finally, SCOTUS.
The decision favoring the land owner, as spelled out at JDSupra:
What was the Supreme Court’s decision?
The Court ruled that the Fifth Amendment’s Takings Clause can be violated even when there is not an actual taking of property. The Court stated that “extortionate” demands for property (including demands for monetary exactions) in the land-use permitting context run afoul of the Takings Clause because “they impermissibly burden the right not to have property taken without just compensation.”
The decision seeks to remedy scenarios in which the government may use its substantial discretion in land-use permitting to pursue governmental ends that lack an “essential nexus” and “rough proportionality” to the effects of a land-development project, noting that such uncontrolled discretion can result in diminishing the value of the property without justification. The decision makes it clear that conditions sought to be imposed in land-development permits can violate the Takings Clause if they lack an essential nexus and rough proportionality to the effects of the proposed use of the property. This is true even when the government denies a permit application on grounds that an application does not acquiesce to the conditions, and even when the condition only requires the payment of money.
What is the impact of the decision?
The decision protects land owners from permit conditions sought to be imposed by government agencies that do not have an essential nexus to a proposed land development project. To be clear, the decision does not prevent the government from mitigating the impacts of a proposed development. It simply states that if the government requires mitigation or monetary exaction, such mitigation or exaction must have an essential nexus and rough proportionality to the impact of the proposed development. This opens the door for challenges on a federal level where state statutes or case law would not have required the application of an essential nexus and rough proportionality test. The decision can be expected to spur challenges to conditions imposed in land-development projects on grounds that the conditions lack an essential nexus to the development project.
Location, Location, Location
While Koontz has in no way called off the endless tug of war between advocates of property ownership and advocates of environmental stewardship, it has upheld a reasonable conception of fair requirements of developers. The real estate industry’s fixation upon, well, fixation — upon location — is what made the core of this case and the argument on the side of property rights easy to understand. If a developer wants to use their property and knows they must conform to use rules and regulations upon that property, then it’s fair to expect that those rules should apply to that property — not to somewhere else.