Guidance for Local Governments
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Takings Law

The Fifth Amendment to the United States Constitution prohibits the taking of private property for public use without just compensation.1 For many years, lawsuits over the Fifth Amendment's prohibition against taking private property without just compensation focused on the physical occupation or seizure of private lands by the government. Recent decades have seen the development of a different aspect of takings law called “regulatory takings.” Regulatory takings involve government regulations that eliminate all economically beneficial or productive use of private land.

Generally speaking, land use regulations which restrict the uses of (e.g., zoning) or direct the way property is developed (e.g., site plan review, erosion and sedimentation laws, and subdivision regulations), are constitutionally permissible. In the 1926 case of Euclid v Ambler Realty2, the United States Supreme Court ruled that zoning was a legitimate exercise of government power. Through zoning, landowners share the reciprocal benefits and burdens that come with the orderly development of land in the community. The fact that zoning regulations may lead to a reduction in the value of private property   sometimes even a substantial reduction   was not grounds for invalidating them. However, the Supreme Court noted that in an individual case, a zoning regulation as applied, could violate the protections provided in the U.S. Constitution.

The basic rule for municipal legislative boards to know is that a regulatory taking occurs when government regulation is so restrictive as to prohibit all economically beneficial or productive use of private property.3

In 1978, the Supreme Court decision in the case of Penn Central Transportation v. City of New York4 established a standard of review now known as "whole parcel analysis" which is especially important for implementation of zoning laws, as well as environmental laws. Under whole parcel analysis, government regulations that prohibit development of a part of an owner's land will be upheld, where the owner is afforded a reasonably beneficial and economically viable use of the remainder of his or her land. The property owner's "bundle of rights" will also be examined by courts to determine whether the effect of the government actions is to deprive the owner an identifiable right to develop the property.

Whether a regulatory taking has occurred depends upon whether the owner is deprived of all reasonable use of the property considered as a "whole." If, despite the regulations, the owner can economically use the remainder of the property, the property still has value and a taking will not have occurred. As an illustration, the municipality may have a zoning law that prohibits residential uses in a floodplain. While a property owner may not be able to place his or her home in a preferred location on the property, if the home could still be located on a different part of the property than next to a flood prone stream, a regulatory taking will not likely have taken place. To further our illustration, the owner of property in the flood plain may find there is no suitable land for a residential use, but the property may still be used for another permitted use, such as farming. If, on the other hand, a court finds that, as a whole, the parcel cannot be viably developed because of the regulations, a regulatory taking probably will be found.

Municipal legislative boards should be aware that when a regulatory taking is found, the municipality cannot escape from paying damages to the injured property owner. In the case of Lucas v. South Carolina Coastal Council5, the Supreme Court rejected the South Carolina Coastal Council's contention that compensation is not required for a regulatory taking because the government acts to prevent uses that endanger public safety. The Supreme Court adopted a categorical rule that total regulatory takings, just like physical invasions of property, must be compensated. Government can only avoid paying compensation if the state's background common law of property and nuisance would have allowed it to prevent the activity anyway. It is important to note that the Court's decision applies only to those government regulations which are so severe as to constitute a deprivation of all economically beneficial or productive use of property (that is, "regulatory takings"). Such circumstances are rare. The Lucas holding's sole effect is to narrow the government's justification which may be set forth for such severe regulation.

Courts will also examine the character of governmental action. Certain land use regulations permit an owner wide discretion in the use of land so long as off-site impacts are reduced. For example, performance zoning standards can be used to maintain open space, protect the integrity of wetlands and other environmentally sensitive areas, restrict tree cutting and control storm water runoff without limiting the uses to which the property can be put. Similarly, erosion and sedimentation laws can help prevent outflow and overspill following storm events, without impinging on a landowner’s right to use the land. Therefore, if the landowner can use the property in an economically viable and productive manner that does not cause the off-site impacts that the restriction is intended to avoid, a regulatory takings claim against the regulation will not succeed.

ENDNOTES

(1) The 14th Amendment makes the 5th Amendment applicable to the states. Chicago, Burlington & Quincy Railroad Co. v. City of Chicago, 166 U.S. 226 (1897).
(2) Euclid v Ambler Realty, 272 U.S. 365 (1922).
(3) Agins v. Tiburon, 447 U.S. 255, 260(1980).
(4) Penn Central Transportation v. City of New York, 438 U.S. 104.
(5) Lucas v. South Carolina Coastal Council, 505 U.S.1003 (1992).

Moratorium to Adopt Resiliency Standards

A municipality should conduct thorough planning efforts before adopting new land-use laws (such as the laws described in the Model Local Law publication). However, this process takes time, and a municipality’s high-risk areas – such as floodplains, shorelines, or wetlands – may be left vulnerable while planning is underway. In such instances, a local land use moratorium may be appropriate. A moratorium is a form of zoning that temporarily suspends certain development activities within defined areas in order to allow a municipality time to develop new studies, plans, or land-use laws.

Examples where a moratorium may be appropriate include, but are not limited to, where a community wishes to:

  • Develop updates to local zoning or other laws in order to accommodate or respond to updates in sea-level rise data; 
  • Study the effects of ongoing erosion along a shoreline and design mitigation plans;
  • Pause redevelopment in an area that has recently been damaged by flooding in order to identify strategies for minimizing future vulnerability; or
  • Consider, personalize, and implement any of the model local laws described in this publication.

Moratoria are “stop-gaps” only; they may not be used to prohibit development indefinitely or for an unreasonable length of time. A local law enacting such a moratorium should (1) provide a strong written record establishing appropriate reasons for the moratorium, (2) define the areas affected and the development activities or approvals suspended, (3) clearly identify the moratorium’s limited duration, (4) provide a reasonable process for landowners to seek waivers from the moratorium (which could simply be the municipality’s variance procedure), and (5) be properly adopted through the procedure that governs local zoning amendments. For additional information, please see the New York State Department of State publication, Land Use Moratoria. (2010).(1)

Guidance

Each moratorium requires its own unique justification, which must be based on the particular circumstances and anticipated activities of each municipality. The guidance below provides suggestions for how a moratorium should be structured, as well as other things to consider when drafting a local moratorium law. Examples of provisions that have been included in local moratorium laws are provided for illustrative purposes and don’t reflect official state endorsement.

Preamble and Findings of Fact

This section of a local moratoria law establishes the need for a moratorium. It should contain the municipal-specific findings of fact that link together the specific hazards faced by the municipality, the areas of the municipality that are vulnerable to these hazards, and the study, planning, or local law activities the municipality intends to undertake to address the hazards.
Broken down, the preamble should:

  • Describe changed circumstances, new information, or recent events that indicate the potential for new, increasing, or better-understood hazards.
  • Briefly explain how these hazards can affect the municipality, identifying the area(s) of the municipality that are vulnerable, as well as the zoning currently applicable to such area(s).
  • If particular land uses are especially at risk, and the municipality intends for the moratorium to apply only to these particular uses, identify such uses and explain why they are at heightened risk of these hazards.
  • Identify studies or comprehensive plan updates that would evaluate these hazards, and potential local law changes that would mitigate them. This would include, if applicable, corrections to shortcomings in current local laws. Explain the connection between the hazards and the studies, plan updates, or local laws.
  • State the intent of the municipality to conduct the studies or update comprehensive plans or local laws, including any efforts already underway.
  • State the amount of time that these activities are expected to take.
  • Explain that because these activities will take time, a moratorium is necessary to restrict development in vulnerable areas in the interim.

The following example of a preamble is from the Town of New Paltz(2) moratorium which addresses construction in flood zones:

This purpose of this local law is to temporarily prohibit applications for and approvals of residential developments and the issuance of building permits for the construction of residences and residential buildings and of commercial and other non-residential buildings within areas of special flood hazard as such term is defined in Chapter 82, "Flood Damage Prevention" of the Code of the Town of New Paltz while the Town considers and adopts changes to its land use regulations to address circumstances not addressed by the Town's current planning and zoning laws and to bring them in harmony with the Town's amendment of said Chapter 82 now being updated. This stopgap or interim zoning is intended to preserve the status quo pending the completion and adoption of comprehensive and permanent revisions to such regulations. The overall purpose of this local law is to protect and preserve the general community health, safety and welfare by temporarily prohibiting applications for and approvals of residential developments and the issuance of building permits for certain new construction within areas of special flood hazard while enacting a carefully considered flood damage prevention plan. This local law prevents a "race of diligence" by those seeking to obtain approvals before the regulations are in place and is intended to protect the public interest and welfare until adequate flood damage protection legislation is finally adopted.

The next example of a preamble is an excerpt from the Village of Tarrytown(3) moratorium on construction in wetlands. The preamble includes extensive findings detailing the benefits of freshwater wetlands, and the policy of the village to preserve them.

Findings of Fact. In their natural state, wetlands serve multiple functions . . . Considerable acreage of these important natural resources has been lost or impaired by draining, dredging, filling, excavating, building, polluting, and other acts inconsistent with the natural uses of such areas. Remaining wetlands are in jeopardy of being lost, despoiled, or impaired by such acts, contrary to the public safety and welfare.

It is therefore the policy of the Village of Tarrytown to protect its citizens, including generations yet unborn, by preventing the despoliation and destruction of wetlands while taking into account varying ecological, economic, recreational, and aesthetic values. Activities that may damage wetlands should be located in upland areas….

After careful deliberation, the Board of Trustees of the Village of Tarrytown has determined that the remaining wetlands are important community and natural resource which must be preserved and protected for current and future residents of the Village. The Board of Trustees has found that the Village's current Zoning Code does not contain adequate legislation which will accomplish this aim. Under the current Zoning Code, significant portions of the Village's remaining wetlands are zoned for various forms of use which may be incompatible with this goal. In accordance with these determinations, the Board of Trustees believes that it is necessary to enact a temporary moratorium so that the Board can, during the pendency of the moratorium, adopt resolutions and/or local laws necessary to implement necessary changes to the zoning code which will both maintain wetlands within the Village and protect the health and safety of the residents of Tarrytown.

Geographic Scope of Moratorium

This section identifies the area that the moratorium will cover. The moratorium could cover the entire municipality, or could be limited to specific areas (e.g., flood hazard districts, waterfront zoning districts, conservation districts). If the moratorium will be limited to an area smaller than the entire municipality, a description of the area(s), with reference to a map showing the area(s), must be incorporated into the law. The example here is from the Village of Centre Island,(4) Local Law 2 of 2004,(5) which addressed construction in freshwater wetlands.

This moratorium shall prohibit the issuance of any permit from any agency of the Village for any construction, alteration or subdivision in or on those areas designated as freshwater wetlands on a certain map entitled "Tentative Map of Freshwater Wetlands Inc. Village of Centre Island" dated November 10, 2004 and it shall further prohibit any agency of the Village from accepting or approving any pending or future permit application for any construction, alteration or subdivision in or on those areas so designated.

Activities Subject to Moratorium

This section identifies which municipal land use approvals are suspended during the moratorium. Approvals that could be subject to moratorium can include, but are not limited to:

  • Building permits;
  • Floodplain development permits;
  • Site plan approval;
  • Subdivision plat approval; and
  • Historic or architectural board approval.

Private activities that do not require municipal approval (for example, local laws usually do not require landowners to get municipal approval to conduct minor routine maintenance) would not be suspended under a moratorium. The example below is also from the Village of Tarrytown(6) moratorium.

During the effective period of this law . . . the Building Inspector of the Village of Tarrytown shall not accept, approve or process applications for, or issue, building permits which would result in the erection of any structure or site improvement in the area of application .... Furthermore, during the effective period of this law . . . the Planning Board, the Architectural Review Board and the Zoning Board of Appeals will not approve any application which would result in the erection of any structure or site improvement in the area [subject to the moratorium]. Notwithstanding the above, the provisions of this Local Law shall not be applicable to any applications for which a Final Environmental Impact Statement has been prepared, accepted as complete by the lead agency, the public hearing (if any) was closed and the public comment period has expired as of the effective date of this Local Law.

Duration of Moratorium

This section sets a date certain upon which the moratorium will automatically expire. The moratorium cannot be for an undefined or indefinite amount of time. This section should also clearly justify the duration of the moratorium based on the moratorium’s purpose as laid out in the Preamble and Findings of Fact. This section can also provide that if the purpose of the moratorium is achieved before the specified expiration date, the moratorium shall terminate automatically. For example, consider a municipality that wants to enact a moratorium while it prepares an update to its comprehensive plan, which is expected to take one year. The local law enacting the moratorium could provide that the moratorium will terminate after one year or the completion of the comprehensive plan update, whichever occurs first.

The example from the Village of Holley(7) relates to construction of street-level apartments.

This one (1) year moratorium, unless otherwise extended by the Village Board, shall expire upon (a) the enactment of a local law regulating the use of street level apartments within the Village of Holley Square; (b) the adoption by the Village of Holley Board of a resolution expressing said board's determination that the further regulation of such would not be appropriate; or (c) the elapse of one year from the effective date of this local law, whichever shall first occur.

Exception Process

This section lays out a reasonable process for landowners to seek relief from the moratorium’s restrictions on their property. A moratorium should include such a “safety valve” provision. This could be as simple as using the municipality’s existing process for seeking a zoning variance from the zoning board of appeals (as a moratorium is itself a form of zoning). Alternatively, the municipality can use its supersession authority under the Municipal Home Rule Law to set up a separate exception process that grants review authority to a different municipal body (such as the municipal governing board). Such an alternative process can be complex to set up and administer, so the example provided below from the Town of Manheim(8) sticks to the default approach of using the municipality’s existing zoning variance process.

Hardship Use Variance. The Zoning Board of Appeals of the Town is hereby authorized to accept and review (after public notice and hearing and in accordance with the requirements of law and of this Local Law) requests for a hardship use variance from application of the provisions of this Local Law by persons aggrieved hereby. No such use variance shall be granted by the Zoning Board of Appeals without a showing by the applicant that applicable zoning laws and restrictions have caused unnecessary hardship.

A. Unnecessary Hardship. In order to prove such unnecessary hardship the applicant is required to demonstrate to the Zoning Board of Appeals that, with respect to every permitted use under the zoning law for the particular district where the property is located, each of the following four criteria is satisfied: (i) the applicant cannot realize a reasonable return on the entire parcel of property, and such lack of return is substantial as demonstrated by competent financial evidence; (ii) the alleged hardship relating to the property in question is unique, and does not apply to a substantial portion of the district or neighborhood; (iii) the requested use variance, if granted, will not alter the essential character of the rural, hamlet, or other neighborhood; and (iv) the alleged hardship has not been self-created. . .

ENDNOTES
(1) Land Use Moratoria. (2010) NYS Department of State. Retrieved 12/10/18 
(2) Town of New Paltz (NY), Local Law 8 of 2009. Retrieved 12/12/18  
(3) Village of Tarrytown (NY), Local Law 12 of 2003. Retrieved 12/12/18  
(4) Village of Centre Island (NY), Local Law 2 of 2004. Retrieved 12/12/18  
(5) Village of Centre Island (NY), Local Law 2 of 2004. Retrieved 12/12/18 
(6) Village of Tarrytown (NY), Local Law 12 of 2003. Retrieved 12/12/18 
(7) Village of Holley (NY), Local Law 4 of 2007. Retrieved 12/12/18
(8) Town of Manheim (NY), Local Law 1 of 2012. Retrieved 12/12/18