Reviving the Takings Clause

Date: October 23, 2017

The Takings Clause of the Fifth Amendment prohibits government from taking private property without paying just compensation. It’s a straightforward rule, but in reality takings claims are remarkably difficult to prosecute. While government typically acknowledges its duty to pay compensation when physically commandeering private property, the government almost always seeks to avoid this obligation when taking property through excessive regulation.

The Supreme Court’s 1992 decision in Lucas v. South Carolina Coastal Council serves as a cautionary tale. Lucas was hailed as a victory for the property rights movement because the Court said that the government must pay compensation when imposed land use restrictions deny all economically beneficial uses. That should have guaranteed compensation for restrictions going so far as to completely deny all development opportunities. But instead courts in various jurisdictions have sided with governmental defendants in requiring landowners to demonstrate not only denial of economically beneficial uses, but also a showing that the property has lost all residuary value.

In other words, these courts hold that there is no takings liability under Lucas for draconian restrictions diminishing real estate values by 99 percent because the property retains some nominal value. But this supposed rule is gravely unfair and totally arbitrary. Accordingly, we argue, in a recently filed amicus brief, that the time has come for the Supreme Court to intervene because courts continue to deny landowners compensation for restrictions denying development rights.

Specifically, we think the Supreme Court should grant certiorari in Ganson v. City of Marathon, Florida. Here the landowner has been forced to maintain his land as an effective nature preserve for the public’s benefit, without opportunity for compensation. Instead, the government awarded the owner non-monetary credits that may (theoretically) have future value. But we argue that this scheme falls short of the constitutional imperative to pay fair market value for a taking of private property.

We hope the Court agrees to hear arguments in this case. But, in the interim, we’ll continue asking courts to revive the Takings Clause. And relatedly, our Senior Staff Attorney, Luke Wake, recently spoke at the National Association of Home Builder’s annual LAND’s conference, about Ganson and other important regulatory takings cases. Wake recently authored an article discussing the Lucas case in depth and its implications for takings law over the past twenty-five years.

Related Content: Legal - Blog | Legal | Property Rights

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