Rulings Strengthen Landowner Rights

Two recent Supreme Court decisions involving California land use strengthen the rights of property owners. How much? That’s being mulled by attorneys, builders and planners in the nation’s capital.

One ruling already has been described by the National Assn. of Home Builders as “the most important land use decision in the United States since 1926, when the U. S. Supreme Court first declared zoning constitutional.”

The Supreme Court, for the first time, recently decided that property owners must be compensated when a government regulation “goes too far” and overly restricts an owner’s use, even if the deprivation is only temporary.

Before this 6 to 3 decision in First English Evangelical Lutheran Church of Glendale vs. Los Angeles County, the rule in most states was that invalidation of the regulation was the only remedy available to a landowner. A government agency could either revise or rescind the regulation without paying compensation for the period it was in effect.

In the second case, the Supreme Court, for the first time in 65 years, ruled that a government regulation amounted to a “taking” under the Fifth and 14th Amendments. In Nollan vs. California Coastal Commission, the 5 to 4 decision overturned the commission’s condition requiring owners of a beach-front lot to dedicate an easement providing for public access across their property in exchange for permission to convert a dilapidated bungalow into a two-story house.

What is the significance of these two decisions?

One analysis sees the First Lutheran Church ruling written by Chief Justice William Rehnquist as a victory for property owners who have been denied temporary use of their land by local government action. The case involved a campground property of the church in a canyon along the banks of a creek that is the natural drainage channel for a watershed area.

In 1978, a flood took 10 lives and destroyed property, including the buildings of the campground. Los Angeles County thereupon adopted an interim temporary ordinance prohibiting the construction or reconstruction of any building in the region.

The church filed suit, alleging that the ordinance kept it from being able to use its property and seeking to recover damages. The trial court dismissed the suit on grounds that a landowner may not seek damages unless the regulation being challenged is found to be excessive and unnecessary.

However, Rehnquist said temporary takings of land are “not different in kind from permanent takings for which the Constitution clearly requires compensation. . . . The Fifth Amendment’s just-compensation provision is designed to bar governments from forcing some people along to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.”

Robert Linowes, a prominent Washington zoning attorney, cautioned that these cases are not “revolutionary.” Neither are they “occasions for developers to be euphoric nor for government officials to be crying that the sky is falling.”

As he sees it, these decisions merely reflect the court’s overarching policy and evolving philosophy concerning the constitutional right of landowners and the court’s attempt to swing the property rights pendulum to a more conservative beat.

However, Gus Bauman, litigation counsel for NAHB, holds a somewhat more emphatic view: “The psychological impact of the two decisions is considerable. The court is saying to localities that you’ve got to regulate fairly. If you are going to be harsh, you risk running afoul of the takings clause. And if you run afoul of that, you will pay for it.”

In still another analysis, William D. North, executive vice president of the National Assn. of Realtors, said these rulings “must have the effect of prompting communities across the country to reconsider the policies under which they prohibit, restrict or delay the use of real estate without compensation to the owners.”

In the Nollan case, the California Coastal Commission sought to carry out its mandate to preserve “public access to the coast for recreational purposes.” The commission argued that the deed restriction, which gave the public lateral access across the beach, advanced the public interest of protecting “the public’s ability to see the beach, assisting the public in overcoming the ‘psychological barrier’ to using the beach created by the developed shore front, and preventing congestion on the public beaches.”

The court found the argument implausible. Justice Antonin Scalia wrote, “In short, unless the permit condition serves the same governmental purpose as the development ban, the building restriction is not a valid regulation of land use but ‘an out-and-out plan of extortion.’ ”