What Is The Test For Regulatory Takings in Property?

The test for regulatory takings is primarily based on the Penn Central Transportation Co. v. New York City (1978) framework, which evaluates economic impact, investment-backed expectations, and the character of the government action.

The test for regulatory takings is derived from case law, with significant emphasis on the factors established in Penn Central Transportation Co. v. New York City (1978). This framework requires courts to consider three main factors to determine whether a regulation has gone 'too far' such that it constitutes a taking under the Fifth Amendment. These factors include the economic impact on the claimant, the interference with distinct investment-backed expectations, and the nature of the governmental action.

Economic impact assesses the extent to which the regulation decreases the value of the property in question. A regulation that completely denies an owner of all economically beneficial use of their land may warrant a finding of a taking, as seen in Lucas v. South Carolina Coastal Council (1992). Conversely, a mere decrease in property value may not suffice to establish a regulatory taking.

The second factor, investment-backed expectations, deals with the reasonable expectations of property owners at the time they acquired the property. If a regulation frustrates these expectations to a significant degree, it might support a claim for regulatory taking. This context is particularly important in cases where property owners have invested significantly based on existing zoning laws or land use permits.

Finally, the character of the governmental action examines the purpose and nature of the regulation itself. If the regulation serves a legitimate public interest, such as environmental protection, the courts may be more likely to uphold the action as constitutional, rather than recognizing it as a compensable taking. Each of these factors is considered in conjunction, with no single one determining the outcome independently.

• 1Penn Central Transportation Co. v. New York City (1978) - Established a framework for evaluating regulatory takings.
• 2Lucas v. South Carolina Coastal Council (1992) - Determined that total loss of economically beneficial use constitutes a taking.
• 3Nollan v. California Coastal Commission (1987) - Clarified that conditions on permits must have an essential nexus to the government's interest.
• 4Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency (2002) - Held that temporary moratoriums do not constitute a taking.
• 5Koontz v. St. Johns River Water Management District (2013) - Expanded the limits of extortionate demands in land use permitting.

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