The Real Estate & Environmental Law Blog Focusing on legal trends in data security, cloud computing, data privacy, and anything E

Empowering Embattled Landowners: The Recent Koontz Decision

Posted in Leasing

The Supreme Court has shifted the land use playing field back towards landowners and away from government freedom to impose conditions on the development of property.  While by no means invalidating local government land use regulatory authority, the Court did hold that imposing an overreacting condition on development can constitute a taking.

In a case involving Florida swampland of all things, Koontz v. St. Johns River Water Management Dist., the US Supreme Court held a government entity’s conditions of permit approval requiring a landowner to either build on only 1 acre and dedicate his remaining 14.9 acres for conservation, or instead fund offsite wetlands mitigation for the right to build on 3.7 acres was unconstitutional extortion. The decision was made in light of the “special vulnerability of land use permit applicants to extortionate demands for money.” Constitutional doctrine forbids pressuring individuals to forfeit constitutional rights, in other words, pressuring them to do what the government cannot constitutionally order from them. Here a water district’s demands impermissibly burdened a landowner’s 5th Amendment right to not have property taken without just compensation.

This case broadens the grounds upon which landowners may challenge conditions of approval imposed by government entities. Landowners may challenge conditions imposed even where they refuse to meet those conditions, or conditions requiring payment for public improvements if such payments will not be put to a use that has a “nexus” or “rough proportionality” to the contemplated project.

Specifically, the court found that the local government’s conditions lacked the required “nexus” and “rough proportionality” to the project at hand. The court held that these requirements apply whether a government entity approves a permit because an applicant satisfies a condition requiring dedication or denies a permit because an applicant refuses to dedicate. However, just compensation is only proper in the former case.  Further, the court held that conditions requiring landowners to pay for public improvements (here, the funding of offsite mitigation) must meet the “nexus and “rough proportionality” requirements. For instance, a taking exists where a government entity, by monetary exaction, achieves a result it could have obtained through taxation.

So the next time City Hall tries to pass off gold plated fixtures in the Mayor’s office as a condition on your project, there are grounds to object.