Property Ruling Unlikely to Bring Surge in Development Density
Builders in Orange County apparently will not be able to increase density in developing their properties or avoid paying special fees as a result of the U.S. Supreme Court decision making government agencies financially responsible for losses when they take away property development rights.
Lawyers who advise builders and city councils in Orange County on land-use issues generally contended Wednesday that the court’s decision--handed down Tuesday--means only that landowners must be compensated for government actions that deny them all economically viable use of their land.
The decision, these attorneys said, does not appear to require governments to compensate landowners for reducing the number of homes allowed on a piece of property, or for slowing down the rate of development, or for charging fees for building roads, schools and parks.
But some builders are counting on what what Jeffrey M. Oderman, city attorney for San Clemente, calls “the intimidation factor”: He hopes government restrictions will be loosened by threats to sue over the issue of what constitutes the “taking of property” by government--the specific act to which the justices referred.
“I don’t think a court will find a taking has occurred unless all use of a property has been denied,” said Philip D. Kohn, an attorney who works under contract as Laguna Beach’s city attorney and who also represents private clients. He noted that, by contrast, most of the disputes and lawsuits over government actions involve reduced development densities.
Spate of Calls
Kohn nonetheless said he received a spate of calls from elated builder clients who had heard about the decision: “They want to go ahead with applications (for building projects) right away, with the idea if they get denied or substantially whittled down, they would use the court decision as a way to seek monetary damages. They think this has added another weapon to their arsenal.”
He added that builders probably “have nothing to lose by suing.”
Gideon Kanner, a professor of property law at Loyola Marymount School of Law in Los Angeles and a condemnation lawyer who filed a friend-of-the-court brief in the case, said that “a lot of the reaction (to the decision) is overstated,” because of the limits of its application.
The case dealt with a Los Angeles County decision to prohibit reconstruction of a church camp destroyed in a flood. The county rezoned the land as a flood zone in which any construction was prohibited, and the church sued.
An example of a “taking” of property by government zoning action, he said, would be rezoning a property for agricultural uses although the soil was too poor to grow anything, or, as in the Supreme Court case, the redesignation of a parcel into a zoning category that bars building.
Kanner described Orange County as “kind of mainstream and sensible and business oriented.”
He said he doubted whether the decision will have much impact on government zoning actions, which he said have been generally reasonable.
Increased Concern Predicted
But Ray Watson, vice chairman of the Irvine Co., said he believes that the court decision will encourage California’s local governments--which he said have increasingly required developers to make property concessions “for the good of the whole community”--to give more thought to the plight of landowners.
“It will force a publicly elected official to give consideration to the private interests or suffer the consequences,” he said.
And whatever the final interpretation, the decision may influence the outcome of at least a few land-use fights in the county.
Richard G. Duncan Jr., an attorney for the Lusk Co., said the ruling should help a suit that Lusk and other large landowners in San Clemente have filed to stop the city’s slow-growth law.
The developers have contended that the city’s development limit of 500 houses per year is invalid and tantamount to condemnation. Under the new ruling, Duncan said, the developers now may seek an award of damages from the state if they can prove their case.
Similarly, Robert London Moore, president and general counsel for Mills Land and Water Co. in Huntington Beach, said he “may ask for compensation going back to 1965” because of actions taken by the state Department of Transportation, Huntington Beach and the state Coastal Commission, which have prohibited development of more than 20 acres of coastal property near the Pacific Coast Highway and Beach Boulevard.
Mills’ plans to build a tourist-commercial project on the property, Moore said, initially were stopped by the state’s decision to build a coastal freeway, then were further complicated when the freeway plan was dropped and the parcel was isolated by the vacant state-owned right of way. Then, he said, the Coastal Commission and the city designated the property as a wetlands preserve.
“We’ve been hoping the Supreme Court would do this for the last 10 to 15 years,” said Roger M. Sullivan, another attorney for Mills.
