Takings, Property Rights, and Respect for Nature
1. 5th amendment taking clause ". . . nor shall private property be taken for public use without just compensation"
a. Allows that society has eminent domain (in final analysis, state/public has ultimate control over the property); but requires compensation for exercising this societal right to private property; suggests property social creation
2. Regulator taking versus transfer of title under eminent domain (=condemnation taking)
a. E.G.: Lucas: Government regulations that prevent Lucas him from building on beach land versus government condemns the property (obtains ownership) and turns it into a public park
3. Regulatory takings are “government regulations of private property that are believed to require compensation”
a. Advocates of treating government regulation of property as a “regulatory taking” tend to oppose government regulation and they want to significantly extend what constitutes a compensable taking under the 5th amendment
4. Formulations of takings issue
a. When do regulations restricting the uses of property (morally) require compensation? When do regulations constitute a taking?
i. Example of a regulatory taking: I buy a piece of land on Sullivans, government tells me I can only put a tepee on the land. Not an example of a regulatory taking: Government prohibits me from using my land to build a ten story hotel or brothel in a residential area of Sullivans.
b. Political formulation in context of env. issues:
i. Pro-taking formulation: When government regs decrease the value of private property, the government takes some portion of the value of the private land and should compensate landowners for that value decrease
ii. Anti-taking formulation: Taxpayers should pay property owners to obey environmental and other land use laws. (This is an attack on the government’s/society’s ability to regulate.)
Examples of Possible Compensable Takings: Legal cases (mostly Supreme Court):*Not compensable takings (no compensation required)
1. Mugler, 1880 (alcohol prohibition): didn't require compensation
2. Hadacheck, 1915 (no brick kilns in residential area): No taking in a case where brick manufacturer had been there first and residential development later, even though regulation led to 90% reduction in property value
*Compensable takings (compensation required)
3. Pumpelly, 1871 (Government dam causing flooding): Compensable taking when a government built dam flooded a person's property (the dam was built for flood control); A physical invasion w/o taking title
4. Penn Coal v. Mahon, 1922 (preventing mining undercutting land): Reg that prohibited a coal mining company from mining in a way that undercut the surface of the land on which houses built was compensable
5. Causby, 1946 (Airport noise): Airplanes flying over houses were a compensable taking (but flying by not)
6. Lucas, 1992 (Beach building): If 100% loss of economic value, then unless background common law already prohibits the use of property (such use is deemed a “nuisance”), the regulation is a taking
1. Billboard regulations
2. Prohibition on filling wetlands
3. Prohibition on destroying habitat of endangered species
4. Beach building regulations (including prohibition of sea walls and building on the beach)
5. Water rights in the West (continued access to federally subsidized water)
Other examples of regulations possibly affecting property values (Should compensation be required in these cases?)
1. Historic Preservation
2. Zoning laws: restricting height of buildings or % of lot landowner can pave over (neighbors flood) or # of people the house can be rented to
3. Government restrictions on building so as to preserve other people’s views
4. Hunting regulations
5. Compensation for slave holders (due to emancipation proclamation)
6. Abolishing duties on foreign imports (do harmed industries deserve compensation?)
7. Regulate tobacco as addictive drug (significant diminution of value of tobacco companies)
8. Raising the drinking age, lowers the property value of a bar owner
9. Safety requirements on owners of buildings and factories Fire escapes, lighted halls
a. Does increasing positive duties that go along with property rights require compensation?
10. Economic regulations: rent control or minimum wage laws or prohibiting the firing of workers for joining trade unions
Nature of property rights
1. Property rights are not absolute; there are limits to what one may permissibly do with one’s property
a. Property rights include duties/responsibilities as well
b. Property ownership is not despotic dominion, absolute sovereignty, “landlord”, with unfettered control and personal fiat in total independent of others’ wishes
2. Property rights as bundles of more specific rights (to use, to exclude others, to transfer, ???to destroy???)
a. If property rights do not include the right to destroy, then preservationist duties do not conflict with property rights
b. Seeing property rights as bundles, allows us to realize owners can have some rights–to economic produce, to keep police at bay–without having others (to destroy endangered species on land or fill wetlands)
3. Are property rights natural inherent rights that protect individual freedom or socially created rights that serve social purposes (and can be adjusted to better serve them)?
4. Should we think about ownership of land in the way we think about ownership of artifacts (like toasters)?
Two theories about regulatory takings
1. Nuisance Abatement Theory: Regs preventing a noxious use, a public offending use, a public nuisance, and to protect public health, safety, welfare or morals are exercises of "police power" and not compensable takings (shouldn’t be compensated)
a. If the regulated use harms general public, not a taking
i. But when is a use a harm rather than the failure to provide a benefit?
b. In these cases private property isn't taken for public use, but rather a nuisance is prevented
c. Pig farm, sausage factory, porn shop, night club in residential areas
2. Diminution of Value Theory: When economic loss reaches a certain magnitude (i.e., the trigger), it is a compensable taking
a. A drastic reduction in value, automatically triggers compensation. (Penn Coal v. Mahon); Regs that deprive owner of all potential value and economic use, usually (but not always) considered a taking.
b. When does a regulation go too far? What level trigger. 50% reduction? Any amount? Inordinate burden?
Diminution of value theory and nuisance abatement view don’t agree: N
o taking if reg prohibits a noxious use, no matter how economically destructive
Givings objection to takings legislation:
If the government/public must pay the landowner for causing a decrease in property value, then landowners should pay the government/public for increases in property value (givings) that the government causes
Possible Takings Principles
1. If public benefits (from a regulation), then the public should pay
a. Refusing to distribute the cost of achieving a social goal to public at large and placing them on property owners seems unfair.
b. Is “preserving” endangered species a public benefit? Depends on if accept anthropocentrism or not.
2. If public harm is prevented, public should not pay
a. A regulation prohibiting a private property owner from causing significant harm (or risk of harm) to the public or other property owners is not a compensable taking. (Nuisance abatement theory)
b. Not appropriate for government to pay an individual to refrain from doing what it would be morally wrong to do (causing cancer in neighbors, driving species extinct)
c. How do we distinguish between providing a public benefit and avoiding causing a public harm?
3. If the regulation was in place before owner bought property, it is not a compensable taking?
4. Any change in regulation/law that lowers value significantly is a compensable taking (Diminution of value theory)
a. If a reg undermines (legitimate? any?) expectations that go with property ownership it's a compensable taking (otherwise no)
b. Wrong to change the rules of property ownership mid-stream: Unfair surprise
Problems cases? New listing of an endangered species; new pollution regulations of Westvaco; banning slave ownership, regulating tobacco/alcohol
c. Objection: This would freeze any significant regulations/laws: It would be too expensive for government to ever issue new regulations/laws.
d. Mustn’t prudent investors take into account the risk of society changing its values and rules?
5. Where property uses conflict, whoever was there first has the right
6. If the change that turns something into a nuisance is caused by nature, then no compensable taking.
7. Environmental principle to protect nature: If interests of the public have long existed (and only recently no longer taken for granted) and a new regulation protects these public interests, it is not a compensable taking
8. If a state action that does X is a compensable taking, then state regulation that prohibits a private property owner from doing X is not a taking.
9. When government regulations are trying to resolve conflicting land-use desires of private property owners, never a taking (Joseph Sax's suggestion)