On June 25, the U.S. Supreme Court issued a ruling on a key land-use case in support of private property rights, holding that property owners may be entitled to compensation when a jurisdiction denies a land-use permit. The decision will have a significant effect on the land-use approval process whenever zoning and environmental regulators seek concessions from real estate developers.
Property owners and developers are routinely forced to agree to additional stipulations from regulatory bodies to obtain land development permits. At issue in Koontz v. St. Johns River Water Management District was whether those types of regulatory actions during the land-use approval process constitute a “taking” of a real estate developer’s private property rights, violating the Fifth Amendment to the U.S. Constitution.
NMHC/NAA had joined a coalition of real estate and related trade associations in filing an amicus brief in support of Koontz.
More specifically in Koontz, a property owner was required to fund off-site, wetlands mitigation in return for a land use permit. The Court considered whether making a permit contingent on satisfying such a condition was proportionate to the effects of Koontz’s proposed commercial project-or whether the government’s demands were “closer to an unconstitutional form of extortion.”
The case resolved two important property rights questions: 1) permit denials are subject to the same constitutional takings test established by earlier court rulings and 2) the court’s rule applies even where a jurisdiction makes only a monetary demand.