The Fifth Amendment of the United States Constitution protects individuals against private property from being taken without just compensation. This typically occurs with real property. Although controversial, it has been deemed constitutional for state governments to have wide latitude, essentially unfettered freedom to regulate land usage. In a landmark case, the United States Supreme Court upheld zoning regulations in the case of the Village of Euclid, Ohio v. Ambler Realty Co., 272 U.S. 365 (1926).
In this case, the Court ruled that it was not an unreasonable intrusion into private property rights by governments to restrict land usage because governments had a valid interest in regulating land usage to preserve or maintain the character of an area or neighborhood. With the Euclid case some believed that zoning was an unreasonable intrusion into private property but the case made state zoning ordinances constitutional with many states enacting zoning regulations and land use permits since the decision.
Although there have been many challenges to the Euclid case in attempts to have it overturned, the Court has consistently upheld its decision. However, the question becomes: When does a government regulating land usage become an unconstitutional taking? The Supreme Court faced this very question in two other landmark cases Nollan v. California Coastal Commission and Dolan v. City of Tigard.
In those cases, the government granted land use permits on the condition that the landowners relinquish certain interests in real property. The Court held in these cases that the conditions imposed for approval of the permits went beyond land use regulations but rose to the level of extortion. As a result, the Court tailored two requirements to ensure that the conditions set for permits were connected to legitimate state interests: essential nexus and rough proportionality. There must be a nexus or relation to the permit and the proposed land usage.
The issue of land use permits was revisited in the landmark case of Koontz v. St. John’s River Management. In this case, Coy A. Koontz, Sr. and his spouse had purchased land in Orange County, Florida and over the years the county had enacted legislation that substantially impacted their real property. He eventually sought to develop about four acres of his land which comprised of a mixture of forested and herbaceous wetlands, but state regulations required that he obtain certain wetlands dredging permit from the St. John’s River Water Management District, an agency authorized to apply conditions to the permits to ensure that any construction is not harmful to the water resources of the district.
The District would only allow development of his land if Koontz agreed to make cash payments for improvements to unrelated district property miles away. Koontz refused as he already agreed to donate eleven acres he was not planning to develop, thus his permit was denied.
He filed suit in Florida State Court alleging that the District’s action of denying his land use permit was an “unconstitutional taking” of his property violating the Taking Clause of the Fifth Amendment. The Court sided with Koontz; however, the District appealed the decision but eventually approved his permit. In a separate trial, Koontz was awarded money for the temporary taking of his land.
The appeals court upheld the Florida State Court decision but the District appealed to the Florida Supreme Court, which overturned the appellate court ruling. The United States Supreme Court granted Koontz’s certiorari to review whether or not Nollan-Dolan requirements for land-use applied to a situation where: (1) the permit applications were denied, not granted subject to conditions and (2) the permit conditions proposed by the government to not require the landowner to relinquish property.
The Court held in its decision that the Nollan-Dolan requirements should apply even when the government denies a permit or demands money.
How this decision affects government land-use permit remains to been seen but as a joint statement released by the St. John’s River Water Management District and Florida Department of Environmental Protection succinctly stated it “clarified the constitutional protections that must be afforded to landowners when governmental entities issue permits affecting protected property interests.”