Destroying Property Value by Regulation Is Just as Bad as Using Eminent Domain

Nearly a century has passed since Justice Oliver Wendell Holmes ’s legendary proclamation that “while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking.” But that statement did little to actually clarify when the Fifth Amendment’s protections against uncompensated takings of property applies to go vernment action that regulates away the use of land rather than physically taking it through eminent domain.Attempting to clear up that confusion, the Supreme Court 40 years ago handed down the now infamousPenn Centraldecision (involving the historic qualities of NYC ’s Penn Central Station).Penn Central requires courts to go through a balancing test based on (1) the economic impact of the regulation, (2) the extent to which the regulation interferes with reasonable investment-backed expectations, and (3) the nature or character of the government action. Unfortunately, that ’s a lot of words to give very little direction, so property owners, regulators, lawyers, and lower courts have been clamoring for meaningful guidance on those fact-bound, ad-hoc inquiries ever since.As the story of Simone and Lyder Johnson illustrates, the Supreme Court needs to provide true guiding principles on regulatory takings. The Johnsons were drawn to Ponce Inlet, Florida, where they bought land and made plans to construct their dream home. Sensing that the town may be able to benefit, Ponce Inlet persuaded the Johnsons to expand their...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs