WWW.PLANNINGMI.ORG
On November 28, 2005, the MAP Board of
Directors adopted a policy statement on due
process and regulatory takings. The adoption
of this policy is particularly important in light
of House Joint Resolution (HJR) Q, which
was introduced on October 18, 2005, and
which proposes an amendment to the State
Constitution to create a right of compensation
for land use regulation. MAP staff and law
committee members will testify at the House
Government Operations Committee meeting
when HJR Q is considered by the committee,
and the policy frames the MAP position on this
issue. We will seek other opportunities to present
our policy in the State Legislature as well, and
disseminate it to Michigan’s legislators.
The MAP Board adds the substantive due
process and regulatory takings policy statements
to its eminent domain policy, which was adopted
on October 5, 2005. MAP has had several
opportunities over the last several months to
forward our Eminent Domain Policy to Michigan’s
legislators, including a presentation to the local
government caucus on October 25, 2005, and
testimony at the House Government Operations
Committee on November 1, 2005, focusing our
comments on the policy, as well as a definition
of blight.
The policies were adopted in response to the
Kelo v. City of New London Supreme Court
decision in spring 2005, in anticipation that the
Michigan Legislature would follow the lead of
other states that were forwarding legislation
to restrict the use of eminent domain. When
Michigan’s legislators did follow suit, MAP was
prepared to respond with the newly adopted
policy. We will continue to advocate for a
reasonable approach to eminent domain, due
process, and regulatory takings as the myriad
bills related to these topics wind their way
through the legislature.
Issue Number 17:
Due Process and Regulatory Takings
The Substantive Due Process and
Regulatory Takings Doctrines under
Federal and State Contitutional Law
Issue 16 of Smart
Growth Tactics
summarized the
takings doctrine
under federal and
state constitutional
law. The takings
doctrine addresses
the constitutional
reach and limits of
the power of eminent
domain--or the
ability of government
to take title to
private property
Local land use regulation: Government can use its regulatory
involuntarily through a powers to preserve neighborhood quality by, for example,
condemnation action. prohibiting the operation of junkyards and auto repair shops
in residential neighborhoods.
In adjudicating cases
contesting this power,
doctrines affecting planning and land use
the courts have focused especially on the
law--the due process and the regulatory
constitutional requirement that property
takings doctrines.
be taken through eminent domain only
for some legitimate “public use,” which
may include the eradication of “blight,”
and these two issues were discussed in
depth. Issue 16 also briefly summarized
the separation of powers doctrine
and the supremacy clause of the U.S.
Constitution in order to provide some
As plenary authorities, state governments
context for understanding how the courts have the police power, which enables
generally approach cases like takings cases. them to regulate land use for the purposes
Building on those discussions, this issue
of promoting public health, safety, morals,
concludes a two-part series by providing
and general welfare. Local governments
a similar review of two additional
have this power as well to the extent it is
and equally important constitutional
continued on page 2
M I C H I G A N ASSOCIATION O F P L A N N I N G — M A K I N G G R E A T P L A C E S H A P P E N
M II CC HHI IGGA AN N P LA ASNS NOECRI A- T 6I O
0 TN H OA FN NPI LV A
ER
N SN AI RN YG —
I S MS U
A EK ,I NS G
EPG
T ERME BAETR / PO LCAT C
OE
B ES R H2A0 P0 5P E N
The Substantive
Due Process
Doctrine
3
delegated to them by the state through
constitutional or statutory provisions.
This power to regulate the use of land,
however, is qualified by the doctrine of
“substantive due process.” Despite its
unwieldy title, this doctrine is nothing
more than a simple means-ends test
derived from the due process clause
of the U.S. Constitution’s Fourteenth
Amendment. Under this test, courts
require that governmental regulation
bear a “reasonable relationship” to a
“legitimate” state purpose. In effect,
courts enforcing this doctrine ask two
questions: first, whether the costs of the
regulation are proportional to the ends
to be achieved and, second, whether
the end itself is one that the government
is entitled to pursue. Since 1926, the
court has held that zoning regulations as
a general matter meet this test (Village
of Euclid v. Ambler Realty Co., 272
U.S. 365 (1926)). In theory, however,
the application of zoning ordinances
to a particular parcel of land might be
so irrational as to lack any reasonable
relationship to a legitimate purpose.
It is easy to see that the doctrine of
substantive due process is little more
than an open-ended judicial inquiry into
whether the benefits that a regulation
yields justify the burdens that it imposes.
As noted above, the U.S. Supreme
Court has held since the 1930s that
courts should defer to democratically
accountable policymakers when
applying such a test, as courts have no
institutional advantage over politicians
in deciding whether some regulation
makes for wise policy. As a result, the
federal courts overwhelmingly defer
to state and local governments in
assessing whether some regulation bears
a reasonable relationship to a legitimate
state end. Indeed, federal courts almost
never strike down land use regulations
as a deprivation of the “substantive”
aspect of due process. In our federal
system, however, state courts can
enforce not only the U.S. Constitution,
but also their own state constitution’s
due process clause as a limit on the
power of government to regulate land.
In contrast to the federal courts, they
2
have tended to be more aggressive in
assessing whether land use laws serve a
legitimate state interest.
Deference to
local land use
regulation
In the ordinary situation, both state
and federal courts accord substantial
deference to local land-use regulation.
For instance, there is no doubt that
government can use its regulatory
powers to preserve neighborhood
quality by, for example, prohibiting the
operation of junkyards and auto repair
shops in residential neighborhoods.
However, some state courts have
placed special limits on the regulatory
power of local government using state
constitutional doctrine, especially where
there is a great risk of parochial or selfserving regulation that is burdensome
to the greater region. For instance, in
the famous Mount Laurel decision,
New Jersey’s supreme court held that
New Jersey’s state constitution required
local governments to insure that their
zoning ordinances provide for sufficient
affordable housing to meet a “a fair
share” of the “regional need” for such
housing (Southern Burlington County
NAACP v. Township of Mt. Laurel 336
A.2d 713 (N.J. 1975)). According to the
Mount Laurel court, local governments
too frequently promoted their own tax
base and social prejudices by excluding
low- and moderate–income households
from the community through zoning
ordinances. Such a parochial interest
was not a “legitimate state interest”
within the meaning of the state’s
constitution, according to the court,
because each local government had
an obligation to consider the regional
interest when regulating the use of land.
For the most part, the state courts in
Michigan have not deviated significantly
from the federal courts in interpreting
the state’s substantive due process
doctrine. Michigan, for example,
has not followed New Jersey’s lead
MICHIGAN
ASSOCIATION O F
and imposed a “fair share” housing
requirement through constitutional
doctrine. While the state’s zoning
enabling statutes do prohibit localities
from completely zoning out less
desirable land uses, this is a statutory
provision, not a constitutional mandate.
In the end, both the federal and state
substantive due process doctrines
require that state and local governments
in Michigan exercising the police
power through planning and land
use regulation do so in a way that
reasonably advances a legitimate public
interest. As long as they can make a
good argument that they are doing so,
the courts should treat their actions
deferentially.
The Regulatory
Takings Doctrine
In the context of the times at the
founding of our country, the language
of the Fifth Amendment’s takings clause
was clearly directed toward the actual
seizure of private property for public
use. In other words, it was intended
from the beginning to serve as a
constraint on the exercise of the power
of eminent domain. Modern methods of
eminent domain embody the principles
set forth in the Fifth Amendment,
allowing governmental bodies to claim
private property when necessary for a
“public use,” but requiring that those
entities pay “just compensation” when
they do so, as discussed in Issue 16.
In 1922, the U.S. Supreme Court
extended that principle beyond the
physical seizure of property, holding in
a landmark decision by Justice Oliver
Wendell Holmes that “[t]he general
rule at least is that, while property
may be regulated to a certain extent,
if regulation goes too far, it will be
recognized as a ‘taking’” (Pennsylvania
Coal v. Mahon, 260 U.S. 393, 415
(1922)). This extension of the takings
doctrine to incorporate the notion
of a “regulatory taking” in effect
serves as an additional constraint on
the exercise of the police power (i.e.,
PLANNING—MAKING
GREAT
PLACES
HAPPEN
result, the court’s attempts to provide
guidance on answering the question
of “how far is too far” over the years
have often confused the reasoning
and tests that it employs for addressing
takings claims and due process claims,
serving to muddle things more than to
clarify. As may perhaps become evident
below, the court’s “regulatory takings”
doctrine is one of the murkier areas of
constitutional doctrine.
Principles for
guidance
In a 1922 landmark U.S. Supreme
Court decision in Pennsylvania Coal
v. Mahon, Justice Oliver Wendall
Holmes stated that “the general rule
at least is that, while property may
be regulated to a certain extent, if
regulation goes too far, it will be
recognized as a ‘taking.’”
beyond the substantive due process
doctrine). Specifically, it applies in
situations where a government has
effectively seized private property for
all practical purposes (intentionally or
not), but has done so through some
type of regulatory action without taking
title to the property or compensating
the owner. Because such a regulation
arguably takes private property without
actually taking title, the action is often
referred to in litigation as an “inverse
condemnation.”
Whether or not this expansion was
provident at the time, the “regulatory
taking” has since become a wellentrenched principle of the Supreme
Court’s larger takings doctrine. Even
so, from its very inception, court
has struggled with the question of
determining when a regulation “goes
too far” and thereby constitutes a
“takings” of private property. This
may stem in part of the fact that the
doctrine exists in a gray area between
the use of the power of eminent domain
and the police power. Perhaps as a
SMART GROWTH TACTICS - DECEMBER 2005
There are two principles, however,
that the court frequently invokes as
guidance to explain the doctrine. First,
the court has repeatedly noted that
“[t]he Fifth Amendment’s guarantee...
was designed to bar the Government
from forcing some people to alone
bear public burdens which, in all
fairness and justice, should be borne by
the public as a whole” (Armstrong v.
United States, 364 U.S. 40, 49 (1960)).
Second, the court has held that whether
a regulation effectively deprives the
owner of property depends in part on
the “extent to which the regulation
has interfered with distinct investment
backed expectations” of that property
owner (Penn Central v. New York City,
438 U.S. 104, 124 (1978)). In short,
the regulatory takings doctrine protects
landowners from both majoritarian
exploitation and unfair surprise.
Between 1922 and 1987, if a court
determined that a regulation amounted
to an unconstitutional taking, the
normal remedy would be to enjoin the
regulation, thus leaving the property
owner free to do as he or she could
have done before the new regulation
was imposed. This remedy, however,
did little to stop a government from
re-enacting a new law very similar to
the regulation enjoined by the court.
By doing so, the government could
force the landowner to re-litigate the
issue of the law’s constitutionality and,
by protracting the costs of litigation,
prevent landowners from obtaining
effective relief from regulations deemed
by the court to be unconstitutionally
confiscatory.
Temporary
Takings
Responding to this worry of bad-faith
regulation by government, the U.S.
Supreme Court held in 1987 (First
English Lutheran Church v. County of
Los Angeles, 482 U.S. 304 (1987)) that,
when the government’s regulation
of private property is deemed to be
a “takings,” it is not sufficient that
the government simply rescind the
regulation. Rather, government must
also pay compensation for the period
in which the confiscatory regulation
was in place, compensating landowners
for the temporary loss of the use of
their property (commonly referred to
as a “temporary taking”). First English
thus clarified both that the appropriate
remedy for a regulatory taking is
compensation, not invalidation of the
regulation, and that a government is
liable for at least partial compensation
even if it ultimately rescinds the
offending regulation.
The “temporary takings” remedy
helps ensure that landowners are not
injured by the delay of litigation.
However, the remedy places the
burden of constitutional uncertainty on
government, which could be obligated
to pay large damages if its regulations
turn out to effect a “taking” of
property. To protect governments from
this uncertainty, the court held that
the obligation to pay compensation did
not run during the period of “normal
delays in obtaining building permits,
changes in zoning ordinances, variances,
and the like” (First English, 482 U.S. at
321). Thus, the government can place
a moratorium on the development of
a parcel while it studies how best to
regulate the property without incurring
an obligation to pay compensation
during the period in which
development is delayed by the need for
good planning (Tahoe-Sierra Preservation
3
Property rights
legislation
across the U.S.
Michigan is not the only state that has
contemplated the adoption of some kind of
“takings” or property rights legislation. In fact,
since the early 1990s property rights bills
have been introduced in the legislatures of
every state and close to half of the states
have adopted some type of property rights
statute. The introduction of such bills peaked
by the mid 1990s, however, but no state
has adopted property rights legislation since
then. More recently, several of the 22 states
with an initiative process have had property
rights legislation proposed through that
process. Most notably, Oregon voters adopted
property rights legislation through initiative in
2000, but it was struck down by the Oregon
courts as unconstitutional in 2002. Oregon
voters adopted a revised initiative this past
year, but it too was recently struck down as
unconstitutional by a state trial court, although
that decision has not yet been reviewed by
the state supreme court.
The approaches employed by states that
have enacted property rights legislation are
quite varied. Even so, they can be grouped
into three broad categories: assessment
statutes; conflict-resolution statutes; and
compensation statutes. Most of the states
have adopted assessment statutes. Modeled
after environmental impact assessment laws,
these statutes generally impose an analysis
and disclosure requirement on state and local
governments contemplating the adoption of
a law or regulation that could reduce private
property values. Most are merely procedural,
intended to better inform the regulatory
decision making process, but not necessarily
stop the adoption of a regulation. To a similar
end, a handful of states have adopted
conflict-resolution statutes. These statutes are
generally designed to create a formal dialogue
and mediation process between regulatory
agencies and affected land owners, and to
streamline the administrative appeal process,
but not necessarily prohibit regulations that
could lower private property values or compel
compensation when they do.
Only four states have adopted compensation
statutes such as that currently being
4
Texas, Louisiana, Mississippi, and Florida have adopted compensation statutes
similar to those currently being considered by the Michigan Legislature.
considered by the Michigan legislature.
These include Texas, Louisiana, Mississippi,
and Florida. (The Washington Legislature
enacted such a statute in 1995, but voters
repealed it later that same year.) Of these
four states, three include a “numerical
trigger” threshold, such that compensation
is required only if the reduction in property
values reaches a certain amount (a 20% or
more reduction in Louisiana; 25% in Texas;
and 40% in Mississippi). Florida’s statute
does not use a numerical trigger, but only
applies when a court determines that a
landowner has been “inordinately burdened”
by a regulation. All of these statutes include
a number of broad exceptions, such as for
regulations implementing federal laws or
addressing common-law nuisances, but do
generally apply to a wide array of regulations
including environmental and affordable
housing regulations. Notably, the scope of the
Louisiana and Mississippi statutes is limited
only to property value impacts on forest and
agricultural lands.
A number of researchers have attempted to
explain why the property rights state-house
campaign lost its momentum by the late
1990s. They generally point to an increased
awareness by legislators and the public of the
implementation difficulties and the potential
price-tag that come with a property rights
law—especially a mandatory compensation
law. Other researchers have attempted to
document the actual affects of the laws that
have been adopted. With regard to states
with compensation statutes in particular, the
MICHIGAN
ASSOCIATION O F
impacts have not been dramatic, at least in
terms of the amount of litigation prompted.
Only about a dozen court decisions have
been published with regard to the four state
compensation statutes described above.
Even so, researchers suggest that these
laws may well have had a “chilling effect” to
some extent—discouraging state and local
agencies from adopting new laws even if not
prompting litigation—which is arguably what
the compensation statutes were intended to
do in the first place. The extent to which this
might actually be happening, however, has
been difficult to gauge.
Sources
Mark W. Cordes. 1997. “Leapfrogging the
Constitution: The rise of state takings legislation.”
Ecology Law Quarterly, Vol., 24, pp. 187-242.
Harvey M. Jacobs. 1998. “The impact of state
property rights laws: Those laws and my land.”
Land Use Law and Zoning Digest, March, pp. 3-7.
Lynda J. Oswald. 2000. “Property rights legislation
and the police power.” American Business Law
Journal, Vol. 37, pp. 527-562.
Mark E. Sabath. 2004. “The perils of the property
rights initiative: Taking stock of Nevada County’s
Measure D.” Harvard Environmental Law Review,
Vol. 20, pp. 249-280.
Stacy S. White. 2002. “State property rights laws:
Recent impacts and future implications.” Land Use
Law and Zoning Digest, January, pp.3-6.
PLANNING—MAKING
GREAT
PLACES
HAPPEN
Council v. Tahoe Regional Planning
Agency, 535 U.S. 302 (2002)).
Although mitigated somewhat by this
ability to delay development of land to
permit adequate land use planning, even
the mandate that a government pay for
a temporary taking is a sort of unfunded
mandate. When a governmental
agency enters into eminent domain
proceedings, it typically does so in the
context of a capital project budget (such
as one for the construction of a road)
and it has funds available to pay for
the land taken. When it adopts a new
regulation, however, a governmental
agency is unlikely to set aside funds
to buy the regulated property. Thus,
a sudden court order requiring that it
pay for land that it thought that it was
simply regulating can be an unpleasant
fiscal surprise for a governmental entity
and its taxpayers.
Identify a
regulatory taking
Seeking at times to redress unfair
actions of government and at other
times perhaps to profit from an
opportunity, landowners have brought
many “takings” claims against entities
of government. To date the Supreme
Court has established four general rules
that identify situations that amount to
regulatory takings. Each of these rules is
associated with one or more landmark
opinions, which are noted below.
1. Cases in which a regulation
has denied a landowner “all
economically viable use” of his
or her land, by, for instance,
prohibiting the construction of any
structure whatsoever on the land
(Lucas v. South Carolina Coastal
Council, 505 U.S. 1003 (1992)).
This is a so-called “categorical
rule.” If a court finds that all
economically viable use has been
denied, then it must rule as a
matter of law that the regulation
amounts to a taking. In applying
this particular rule, the court has
SMART GROWTH TACTICS - DECEMBER 2005
clarified that
the “whole
parcel”
must be
considered
when
determining
whether all
economically
viable value
has been
denied,
not just the
In 1986 Lucas bought two residential lots on the Isle of
portion of
Palms, a South Carolina barrier island. Lucas intended to
the land in
build a single-family home, as was built on the adjacent lots.
question that (Lucas’s lots are shown above on either side of the square
is directly
house.) Lucas was denied permission to build following a
1988 construction ban. In the 1992 landmark case (Lucas v.
affected by
South Carolina Coastal Council), the United States Supreme
the regulation Court found that Lucas’s lots had been rendered valueless
itself.
by the state law.
2. Cases in
the benefit to be gained by the
which the
requirement (Dolan v. City of
regulation gives some non-owner
Tigard, 512 U.S. 374 (1994)).
the right to physically occupy
4. Cases in which the regulation
the landowner’s land, depriving
deprives a landowner of his or her
that owner of exclusive physical
reasonable, investment-backed
possession (Loretto v. Teleprompter
expectations, either by requiring the
Manhattan CATV Corp, 458
elimination of a use that pre-dated
U.S. 419 (1982)). This is another
the regulation or by forbidding a use
categorical rule, and the court has
that, under all of the circumstances,
stressed that even a seemingly trivial
a landowner would reasonably
physical occupation, as long as that
believe to be permitted (Penn Central
occupation is not consented to by
v. New York City, 438 U.S. 104,
the landowner, qualifies as a taking.
124 (1978)). This final category
3. Cases in which the government
requires a court to engage in a
insists that the landowner accept
case-specific balancing of interests to
some kind of an “exaction”
determine whether the regulation
or “dedication” requirement,
is somehow unjust or unfair in
effectively giving up some portion
light of the economic harm done
of economic value in the property
to the landowner, the landowner’s
or the right to exclusive physical
reasonable investment backed
possession (e.g., dedicating an
expectations (i.e., not necessarily
easement), as a condition for relief
what that particular landowner
from an otherwise constitutional
expected, but what any reasonable
form of regulation (e.g., obtaining
landowner would expect given
a rezoning or a permit), unless
the situation), and the character
there is a reasonable “nexus” or
or purpose of the governmental
relationship between the condition
regulation itself. Often referred
demanded and the purpose served
to as the Penn Central “ad hoc
by the requirement (Nollan v.
balancing test,” it is the final analysis
California Coastal Comm’n, 483
a court employs when considering
U.S. 825 (1987)) and the level
a regulatory takings claim if none of
of imposition created by that
the first three situations described
condition is “roughly proportional”
above applies.
to the harm to be avoided or
5
Michigan Association of Planning
POLICY STATEMENTS ON THE DUE PROCESS AND REGULATORY
TAKINGS DOCTRINES
The following statements present and briefly
explain the policy positions of the Michigan
Association of Planning with regard to the
application of Michigan’s constitutional
substantive due process and regulatory
takings doctrines to the
regulation of private
property by state and
local units of government.
The regulatory takings
policy statement also
addresses the issues of
statutory compensation
requirements. A full
policy guide providing the
background and reasoning
behind these policy statements has been
provided in a separate document and is
available from MAP.
POLICY STATEMENT–
DUE PROCESS
The Michigan Association of Planning:
Strongly supports the ability of state and
local units of government to exercise their
police powers in order to regulate the use of
private property for the purpose of protecting
the public health, safety, morals, and general
welfare, but strongly believes that government
should do so only in ways that reasonably
advance legitimate governmental interests.
The best way to ensure that local regulations
like zoning and subdivision codes reasonably
advance legitimate governmental interests
is to clearly premise those regulations on a
comprehensive local plan that has done the
following things:
• Identified efforts to be taken to ensure
consistency between the plan and
implementing policies and regulations;
• Identified implementation timeframes and
responsibilities; and
• Involved the public in
meaningful dialogue in
the development of the
comprehensive plan,
demonstrating that the plan
was achieved through a
public input process.
The adoption of a wellcrafted plan that pays close attention to these
considerations, and the clear connection
between this plan and the community’s
land use and development management
regulations, will help to ensure that those
regulations are not arbitrary and capricious,
but rather well-supported and well-designed
so that they reasonably advance a legitimate
governmental interest, which will in turn help
to ensure their legal defensibility under the
substantive due process doctrine.
POLICY STATEMENT–
REGULATORY TAKINGS
The Michigan Association of Planning:
• Believes that the federal and state
constitutional regulatory takings doctrines
provide appropriate protections for private
property owners against the unjust taking of
their property rights through regulation.
• Clearly articulated community goals for
the public and private use of land and the
future development of land that clearly take
account of local development trends and
conditions;
• Strongly believes that the State of Michigan
should not adopt, either through statute
or constitutional amendments aside
from the protections currently afforded
under the federal and state regulatory
takings doctrines, the requirement that
governments compensate private property
owners for reductions in the market values
of their properties as may result from
the regulation of those properties. Such
“takings” or compensation requirements
should not be adopted because:
• Clearly articulated well-designed policies to
implement those goals;
▪ The regulatory takings doctrine currently
provides adequate protection against
• Identified local trends and conditions,
including opportunities and constraints for
land use and development based on land
suitability and infrastructure conditions;
6
MICHIGAN
ASSOCIATION O F
regulatory takings and provides certainty
to property owners in extreme cases,
such as when a regulation deprives
an owner of all reasonable use of the
property, while providing sufficient
flexibility to the courts to evaluate
takings claims on a case-by-case basis
in less clear cases. As discussed more
fully in the background to this policy
statement, the animating principle behind
the regulatory takings doctrine is the
idea that it is sometimes unfair for the
community to impose burdens on a
few individual property owners through
regulation that, in all fairness and justice,
the community as a whole should bear.
The doctrine itself has evolved over
time to address this concern in balance
with the recognition that the constitution
guarantees reasonable use of one’s
property—not a “right” to extract as
much economic profit from one’s land
as possible—and that “government
could hardly go on” if it had to pay
compensation for all of the economic
costs imposed on private individuals as a
result of its valid regulations. Mandatory
compensation requirements—typically
enacted to address the concerns of
a relatively small number of property
owners whose development expectations
have been frustrated—invariably become
“blunt sledgehammers” that redress the
concerns of these particular property
owners but in doing so forsake the
sense of balance that the regulatory
takings doctrine embodies. Moreover,
these kinds of mandatory compensation
requirements can be found
unconstitutionally unsound themselves
when crudely drafted, such as when they
draw unfair distinctions between property
owners based on the date of property
acquisition.1
▪ As a practical matter, mandated
compensation requirements are
administratively unworkable. Especially
when imposed on regulations that
have broad applicability, administering
compensation mandates necessitates
determining not just the fair market
value of a wide array of properties,
PLANNING—MAKING
GREAT
PLACES
HAPPEN
but also determining how much the
value of each of those properties might
have been diminished because of the
regulation itself, taking into account all
of the other factors that affect property
values. This is a very difficult, if not
practically impossible, task. These kinds
of compensation requirements thus
often have the effect of either completely
eliminating local government’s ability
to regulate land use in order to protect
public health, safety, and welfare,
or effectively imposing a substantial
“unfunded mandate” onto local
governments that undertake regulation
by placing such extensive and costly
administrative hurdles in the way.
property values of all of their neighbors,
who have done nothing to diminish the
reasonable use of the properties in
question but who must now themselves
bear the “uncompensated” burdens
of the incompatible development.
The problematic nature of this kind
of “deregulatory taking” has been
recognized in other states such as
Oregon (see the citation) and Iowa,
where the Iowa Supreme Court recently
struck down a right-to-farm law as an
invasion of the neighbor’s right to be free
from the stink of a feedlot (Bormann v.
Kossuth County, 584 N.W.2d 309 (Iowa
1998)).
▪ Mandated compensation requirements
have the effect of eroding private
property rights as much as advancing
them by placing “innocent” land owners
at the mercy of irresponsible neighbors.
Because mandatory compensation
can have the effect of greatly limiting
local efforts to regulate land use and
development (if not stopping them
altogether, as described above), these
requirements can also have the effect of
allowing some private property owners
to impose their land use wishes (and
produce their own economic gains) at
the expense of their neighbors. For
example, building a skyscraper within
a historic downtown commercial district
or a large chemical storage facility on
farmland next to a neighboring farmer’s
home are all types of development that,
while clearly incompatible, would not
necessarily constitute nuisances and that
would likely yield substantial economic
profits for the property owners building
them. If a mandated compensation
requirement were in effect, it would
likely apply to local regulations designed
to prohibit these kinds of incompatible
development, regardless of whether
the regulations would allow compatible
development as is typically the case,
because of the “reduction” in values
attributable to the regulations. As a
result, the compensation mandate would
effectively prevent local governments
from regulating land use in order to
protect the property owners wishing to
develop in incompatible ways. Moreover,
it would essentially protect those
individual property owners’ development
interests at the expense of the rights and
“The best way to
ensure that local
regulations like zoning
and subdivision
codes reasonably
advance legitimate
governmental interests
is to clearly premise
those regulations
on a comprehensive
local plan...”
SMART GROWTH TACTICS - DECEMBER 2005
▪ Mandatory compensation requirements
are unfair to the community because
they allow individual property owners
who do not want to follow the law to
demand payment from the community
as “compensation” for having to do so.
As noted above, the motivating principle
underlying the regulatory takings
doctrine—and typically underlying
calls for mandatory compensation
requirements—is the idea that it is
sometimes unfair for the community
to impose burdens on a few individual
property owners through regulation that,
in all fairness and justice, the community
as a whole should bear. Also as noted
above, the regulatory takings doctrine
has evolved to address this concern
in careful balance with need for local
government to be able to adopt valid
regulations in order to protect public
health, safety, and welfare. The effect of
mandatory compensation requirements,
however, is to remove this careful
balance and require compensation
even for validly enacted health, safety,
and welfare regulations without regard
to the need for those regulations
or a reasonable property owner’s
expectations in light of those needs.
Rather, it allows the property owner to
essentially demand “compensation”
from the community for complying with a
validly enacted law, and thereby sacrifice
fairness to the community for the sake
of a sense of fairness to the property
owner.
In sum, the public regulation of private
property in order to advance public
health, safety, and welfare often produces
hardships for individual property owners,
understandably raising concerns that those
hardships are sometimes unjustly imposed
on a few individuals when they should be
born by the larger community. The regulatory
takings doctrine has evolved over time to
provide the delicate balance that needs to
be struck in these instances as between
the needs of the larger community and the
interests of the individual property owners.
Mandatory compensation requirements are
generally intended to further address the
hardships imposed on individual property
owners, specifically to eliminate all (or most)
of the private “costs” born by the individual
as a result of the regulation, by making
government “pay” for those costs. Thus
promoted out of a sense of fairness, these
requirements often have the unintended effect
of tilting the balance (or removing the balance
entirely) in favor of the individual property
owner in an unjust way, either by making
it practically impossible for government to
regulate land use altogether, or by eroding
the rights and values of neighboring property
owners, or by allowing a complaining property
owner to demand compensation from the
community as the price for complying with a
validly enacted law.
1 Most notably, an Oregon court recently struck down Oregon’s
“Measure 37” mandatory compensation requirement, in part
for this very reason. MacPherson v. Warner, No. 05C10444
(OR Cir. Ct. for Marion County, Oct. 2005). Available at:
http://www.ojd.state.or.us/mar/documents/OpinionOrderMSJ.pdf
(November 2005).
7
An exception
Qualifying all of these doctrines is one
significant exception. The Supreme
Court has also said that if a regulation
merely forbids a use of land that would
otherwise be a nuisance, it should not
be considered a taking. The court’s
justification for this exception is that
any use of land that constituted a
nuisance could not form any part of
anyone’s property rights; instead, such
a use would be a “takings” of the
neighbors’ property rights to quiet
enjoyment of their land. Although that
rule is some comfort for regulations that
prevent serious air and water pollution
that would clearly amount to nuisances
if left unchecked, the police power
has for 70 years extended beyond the
mere prevention of nuisances. No
reasonable court would hold that the
definition of nuisance would include
a high-rise apartment building or
even a convenience store located
in the middle of a neighborhood of
single-family homes. Under the police
power, however, local governments
carry out the wishes of homeowners
by preventing such uses in singlefamily neighborhoods. Thus, this lone
exception to the “takings” doctrine is
logical and useful but not sufficient to
protect the scope of normal activities
carried out by many local governments
to protect local citizens and property
owners from unwanted intrusions into
their neighborhoods.
Nonetheless, the courts tend to apply
the “regulatory takings” doctrine in a
way that is deferential to governmental
decisions to regulate land, rarely finding
that such regulations amount to a
“takings,” even when such regulations
impose large costs on landowners. The
courts have long been mindful of Justice
Oliver Wendell Holmes’ observation
that “Government hardly could go
on if to some extent values incident
to property could not be diminished
without paying for every such change
in the general law.” Even apart from
nuisance law, land-use regulations - for
instance, zoning codes – protect the
value of property. Discouraging all
such regulation would, therefore, erode
property rights as much as advance them,
by placing each landowner at the mercy
of irresponsible neighbors.
Therefore, each of the four categories
of takings doctrine described has
been construed by the court to
permit substantial uncompensated
regulation. For instance, although the
court requires compensation when a
regulation deprives a landowner of all
economically viable use of their land,
the court has held that regulations
of land are not “takings” of property
even when they deprive a landowner
of all use of some portion of the
landowner’s parcel, by, for instance,
declaring that portion to be a wetland.
In the end, state and local governments
are well-advised to be careful and
prudent when crafting regulations that
constrain private property rights, but
they are really only at risk legally—at
least in terms of the regulatory takings
doctrine—when they truly push their
regulations “too far.”
Richard Norton, Ph.D., J.D. is an assistant professor
of Urban Planning at the Taubman College of
Architecture and Urban Planning and faculty associate
of the Program in the Environment at the University
of Michigan. He teaches a “Legal Aspects of the
Planning Process” course.
Roderick M. Hills, Jr., J.D., a law professor at the
University of Michigan Law School, contributed to the
discussion of the Regulatory Takings Docterine.
Footnotes
1 The due process clause of the Fourteenth Amendment
is also the source of the “due process” doctrine—or more
precisely the “procedural due process” doctrine—which
essentially establishes a set of procedural rules that
government must follow when undertaking some action
(e.g., public notice and hearing procedures). While courts,
litigants, and commenters are not always careful in drawing
this distinction, the thrust of most of the due process claims
of interest for purposes here are substantive in nature,
as described in the text. For the sake of clarity, this policy
statement focuses on those types of claims and uses the term
SmartGrowthTactics
“substantive due process” doctrine accordingly.
This publication was produced by the Michigan Association of Planning.
2 The Court recently clarified this doctrine in a unanimous
Photo credits: Cover photo, www.freeimages.co.uk; page 3, www.arlingtoncemetery.net; www.
unites-states-map.com; page 5, William Fischel.
opinion written by Justice O’Connor. Lingle v. Chevron, 544
U.S. ___ (2005).
Non-Profit
Organization
U.S. Postage
phone: 734-913-2000 fax: 734-913-2061 web: www.planningmi.org
PAID
Permit 199
Farmington Hills, MI
219 South Main Street, Suite 300
Ann Arbor, MI 48104
MICHIGAN
ASSOCIATION O F
PLANNING—MAKING
GREAT
PLACES
HAPPEN