Balancing Private Property Rights and the Public Interest Rebecca Roberts

Property rights issue Societal goals are sometimes pursued through government restrictions on the use of private property. Societal goals are sometimes pursued through government restrictions on the use of private property.

Political momentum Increasing government regulation of private property. Increasing government regulation of private property. Supreme Court protections for private property are tightening. Supreme Court protections for private property are tightening. Strong cultural meaning founded in American concepts of freedom, liberty and citizenship. Strong cultural meaning founded in American concepts of freedom, liberty and citizenship.

Property rights movement Supporters: Supporters: –Seek to reduce government regulation of land Landowners Landowners Industries with direct economic interest Industries with direct economic interest Conservatives, libertarians and other related political platforms Conservatives, libertarians and other related political platforms

Property rights movement Opponents: Opponents: –Recognize societal benefit of government ability to regulate private property use Environmentalists Environmentalists State and local government State and local government Planners, preservationists, scientists Planners, preservationists, scientists Civil rights, public health, etc. Civil rights, public health, etc.

Legal basis Takings Clause of the U.S. Constitution provides legal basis for land laws. Takings Clause of the U.S. Constitution provides legal basis for land laws. Public policies that affect property rights are created locally. Public policies that affect property rights are created locally. Court decisions outline principles for balancing public and private interests in land. Court decisions outline principles for balancing public and private interests in land.

5 th Amendment “…nor shall private property be taken for public use without just compensation.” “…nor shall private property be taken for public use without just compensation.” –5 th Amendment, U.S. Constitution, (1791) Reiterated in Wisconsin Constitution Reiterated in Wisconsin Constitution

5 th Amendment Recognizes: Private property ownership Private property ownership Eminent domain Eminent domain “Takings” “Takings” Requirement for just compensation Requirement for just compensation

Real property ownership Real property Real property –Physical land, improvements, vegetation, subsurface minerals, water rights

Real property ownership Fee simple absolute Fee simple absolute Fee simple interest in real property is three- dimensional, extending within the bounds of the parcel perimeter upward and downward, and indefinitely into the future

Real property ownership Land ownership has been described as a “bundle of divisible rights” Land ownership has been described as a “bundle of divisible rights” Owner may divide fee simple: Owner may divide fee simple: 1.Physical partition 2.Usage rights 3.Time

Real property ownership Green sticks = right to make profitable or pleasurable use of land Green sticks = right to make profitable or pleasurable use of land Red sticks = duties of real property ownership Red sticks = duties of real property ownership –Nuisance –Property taxation –Public regulation

Real property ownership Society creates and defines property rights. Society creates and defines property rights. Social, technological economic and political changes constantly “redefine” property rights. Social, technological economic and political changes constantly “redefine” property rights. –Slavery –Civil rights –Airplanes

Eminent domain Eminent domain = state and local governments have authority to acquire private property for public use. Eminent domain = state and local governments have authority to acquire private property for public use.

Takings Taking = an unconstitutional government appropriation of private property rights. Taking = an unconstitutional government appropriation of private property rights. Each of the notable takings cases has a lesson. Each of the notable takings cases has a lesson.

Evolution of takings law 3 types of takings claims: 1.Physical invasions 2.Compelled dedications 3.Regulatory measures

Physical invasions Physical occupation by a governmental unit or the public is a taking per se, even if the occupation is temporary or minimal. Physical occupation by a governmental unit or the public is a taking per se, even if the occupation is temporary or minimal. –Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982)

Required dedications “Essential nexus” test = exactions or conditions on development must be related to policy objectives and project impacts. “Essential nexus” test = exactions or conditions on development must be related to policy objectives and project impacts. –Nollan v. California Coastal Commission, 483 U.S. 825 (1987)

Required dedications “Rough proportionality” test = exactions or conditions on development must be proportional to the particular harm posed by the development. “Rough proportionality” test = exactions or conditions on development must be proportional to the particular harm posed by the development. –Dolan v. City of Tigard, 512 U.S. 374 (1994)

Regulatory takings Regulations may cause a taking even if there is no physical invasion. Regulations may cause a taking even if there is no physical invasion. –Pennsylvania Coal Company v. Mahon, 260 U.S. 393 (1922) “… while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking.” –Justice Oliver Wendell Holmes

Regulatory takings “Influential factors” for compensable and non-compensable takings: “Influential factors” for compensable and non-compensable takings: 1. Economic impact 2. Reasonable investment-backed expectation 3. Character of government action –Penn Central Transportation Company v. New York City, 438 U.S. 104 (1978)

Regulatory takings Regulatory takings are based on consideration of the parcel-as-a-whole. Regulatory takings are based on consideration of the parcel-as-a-whole. –Concrete Pipe v. Construction Laborers Pension Trust, 508 U.S. 602 (1993) In contrast: Physical invasions need only consider affected portion of property In contrast: Physical invasions need only consider affected portion of property

Regulatory takings Owner must be denied all, or nearly all reasonable economic use of a property for a taking to occur. Owner must be denied all, or nearly all reasonable economic use of a property for a taking to occur. –Penn Central Transportation Company v. New York City, 438 U.S. 104 (1978) When regulation removes all economic value from a property, it is a taking per se. When regulation removes all economic value from a property, it is a taking per se. –Lucas v. South Carolina, 505 U.S (1992)

Regulatory takings Reasonable, investment-backed expectations established prior to regulation are protected. Reasonable, investment-backed expectations established prior to regulation are protected. –Penn Central Transportation Company v. New York City, 438 U.S. 104 (1978) Limitations on landowner title at time of purchase do not result in taking. Limitations on landowner title at time of purchase do not result in taking. –Lucas v. South Carolina, 505 U.S (1992)

Regulatory takings Average reciprocity of advantage = if an owner benefits from a regulation then his/her diminished property value will less likely be viewed as a taking. Average reciprocity of advantage = if an owner benefits from a regulation then his/her diminished property value will less likely be viewed as a taking.

Takings vs. givings? “Givings” = benefits of public regulatory policies, planning decisions and investments. “Givings” = benefits of public regulatory policies, planning decisions and investments. –Unequally distributed –Taxes/exactions may not recoup givings

Balancing opportunities Planning Planning –Involve public and private interests in the planning process –Provide opportunities for education and meaningful involvement –Engage community in dialogue about balancing private and public interests

Balancing opportunities Policy formulation Policy formulation –Match policy to public purpose –Analyze impact of various policy scenarios on public and private interests –Involve public in selecting alternative

Balancing opportunities Implementation Implementation –Base regulation on quantifiable measures –Explain rationale for regulation –Illustrate provisions of regulation with graphics and easy-to-understand language –Provide opportunities for education

Balancing opportunities Review existing regulations Review existing regulations –Review common property rights issues –Explore flexible alternatives to regulation (ex. incentives, education, performance standards, etc.) –Provide opportunity for appeal

Conclusions Private property is a flexible and socially defined concept. Private property is a flexible and socially defined concept. Limitations on individual land interests often result in benefit to society as a whole. Limitations on individual land interests often result in benefit to society as a whole. Where private limitations go too far they must be compensated. Where private limitations go too far they must be compensated. Community planning is one approach to balance private and community interests. Community planning is one approach to balance private and community interests.

Thank you! Any questions? Any questions?