Land-Use Regulations:
How Far Is Too Far? Further Than You Think

Wendy Harris is a Bellingham resident and a community activist with an interest in environmental law.

The right to own private property is a highly valued and fundamental right in our society. However, not everyone is aware that this right is not absolute, but subject to limitation based on the larger needs of the general public. It is undisputed that the government has two separate powers that can restrict the rights of property owners.

When disputes arise, they usually center on whether compensation must be paid to property owners impacted by land-use regulations. This article attempts to explain how these disputes arise and how they are resolved.

The first type of governmental power, eminent domain, is a part of the Fifth Amendment of the U.S. Constitution known as the “takings clause” and extends to states under the Due Process Clause of the Fourteenth Amendment. The government can take private property, but only when it is needed for a public use, such as a highway, and the owner must be paid fair compensation, which is the fair market value at the time of taking.

In Washington, the use of eminent domain is regulated by Title 8 of the Washington Revised Statutes, which extends this power to state, county and city governments. Eminent domain is exercised through a judicial condemnation suit instituted by the government against specific property owners.

Additionally, the state imposes a separate substantive due process requirement that is enforced through a judicial action brought by a property owner. However, where state substantive due process is violated, the regulation is deemed invalid, requiring rescission, but not compensation.

In contrast, the second government power, known as the police power, exists as an inherent right of government, and can be used to regulate the use of private property without compensation where necessary to protect public health, safety and welfare.

The police power is usually exercised through laws passed by the legislative branch and, unlike eminent domain, targets a large group of property owners. For example, under its police power authority, the city of Bellingham limited the amount of impervious surface allowed on property within the Lake Whatcom watershed in order to protect water quality.

Potential conflict exists between eminent domain and the police power. A regulation enacted under the police power may be so overreaching that it effectively becomes an eminent domain taking, without complying with the constitutional requirement of compensation. In this situation, known as a regulatory taking or a compensatory taking, a property owner who institutes and prevails in an inverse condemnation suit is entitled to compensation (as well as litigation costs and attorney fees).

Regulatory taking issues are common when addressing environmental problems. It has become increasingly clear that land-use regulations are necessary to protect the public from environmental degradation. Property owners are concerned that their rights are being too restricted, environmentalists are concerned that environmental laws are too lax and state and local governments are concerned that enacting stronger environmental regulations will be deemed a compensable taking.

For an example of how this issue presents itself, look no further than Lake Whatcom, a source of drinking water for 50 percent of Whatcom County’s population. We know that development within the Lake Whatcom watershed, including development on private property, creates water quality problems. Existing stormwater facilities and land-use regulations have not prevented the increasing degradation of the lake.

Can stronger land-use regulations be enacted to protect our drinking water, while avoiding a regulatory taking? The answer, most likely, is yes. It is extremely rare for a properly drafted environmental regulation to be deemed a taking. Courts grant great deference to the government’s police powers, particularly when environmental issues directly impacting public safety, such as the quality of drinking water, are involved.

Regulatory takings law is developed from judicial decisions. Unfortunately, no single bright line test or clear standard has ever been established, creating some degree of uncertainly and requiring a case-by-case determination. However, review of case law establishes several fundamental principles. The most relevant issues are as follows:

What is the economic impact of the regulation on the property owner? Courts addressing this issue generally require almost total elimination of property value before they find a regulatory taking. While property owners have a right to use their property for economic gain, they are not entitled to the highest and best use. Moreover, in addressing economic harm, the courts look at the parcel as a whole, rather than the portion that has been adversely impacted.

How strong is the public interest being protected? The economic loss to a property owner is often balanced against the validity and importance of the public benefit involved. A regulation addressing public health issues will usually withstand a takings challenge even in the face of severe economic loss.

Is the burden imposed on the property owner fair? While it is appropriate to require owners to pay for the costs associated with developing and using their property, regulations must be reasonably related and proportional to the resulting harm or impact. The public is not responsible for the costs of private development, and they are not entitled to a windfall.

Accordingly, the government must enact land-use regulations that go no further than offsetting the specific burden associated with individual development. This is best done with data obtained through the use of best available science. The government could require a developer to pay for the cost of obtaining such data as it pertains to the developer’s property.

If a regulation was passed prohibiting stormwater run-off from each new lot developed in the Lake Whatcom watershed, the regulation would not be a taking because it is merely off-setting the water quality damage resulting from new development, this specific damage has been clearly established, and is not conferring benefits beyond this mitigation.

Has the property owner exhausted reasonable administrative remedies? Before filing a takings claim, a property owner must submit a development plan and pursue all administrative remedies after denial of the plan. Normal delays in the review of development applications or in adopting changes to the law do not create a taking.

For example, the city of Bellingham imposed a four-month moratorium on Lake Whatcom watershed development while determining how to respond to new state water pollution reduction requirements. Because the moratorium was limited in time and scope, and was enacted to protect the public’s health, it does not constitute a taking.

If a taking occurs, how much compensation is due? In the event that a regulatory taking is found, the government is only required to pay for damages during the time the regulation was in effect. In other words, the government may rescind the regulation, which results in only a temporary taking.

Governments can best avoid a takings problem by drafting regulations that are mindful of these substantive issues and by adopting procedures that provide due process. In fact, under the Growth Management Act, the state is required to provide guidelines for enacting regulations that do not result in a taking, and an advisory memorandum has been issued by the Washington State Office of the Attorney General.

Here in Bellingham and Whatcom County, the governments prefer to address many environmental concerns through education and voluntary stewardship programs. Residents who are not inclined to adopt these recommendations and guidelines may wish to re-evaluate their voluntary compliance in order to avoid the enactment of land-use regulations that are mandatory and able to withstand a takings challenge. §

References

• Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922).

• Penn Central Transporation v. City of New York, 438 U.S. 104 (1978).

• Keystone Bituminous Coal Assoc. v. DeBenedictis, 480 U.S. 470 (1987).

• First English Evangelical Lutheran Church v. County of Los Angeles, 482 U.S. 304 (1987).

• Nollan v. California Coastal Commission, 483 U.S. 85 (1987).

• Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992).

• Dolan v. City of Tigard, 512 U.S. 374 (1994).

• Tahoe-Sierra Preservation Council v. Tahoe Regional Planning Agency, 535 U.S. 302 (2002).

• Lingle v. Chevron U.S.A., 544 U.S. 528 (2005).

• Guimont v. Clarke, 121 Wn.2d 586, (1993), cert. denied, 510 U.S. 1176 (1994).

• Isla Verde Int'l Holdings, Inc. v. City of Camas, 146 Wn.2d 740, (2002).

• RCW 36.70A.370; Title 8, RCW 8.04 through 8.28, inclusive.

• “Advisory Memorandum: Avoiding Unconstitutional Takings of Private Property,” Washington State Office of Attorney General’s Office, 2006, referenced and available online: http://www.atg.wa.gov/takingsmemo.aspx.

• Article: “Takings Law in Plain English” by C. Duerksen and R. Roddewig; available online at: http://www.cted.wa.gov/_cted/documents/ID_1090_Publications.htm.