2006

The US Supreme Court today denied review to an appeal seeking to overturn Olympia, Washington’s requirement that a developer pay a “traffic impact fee” as a condition of developing a four-story office building.  In Drebick v. City of Olympia, the city demanded the developer pay the traffic impact fee even though the proposed office building was on the edge of town, and would not affect traffic. 

Exactions are land use law’s version of “pay to play.”  Local governments often condition development permits on a property owner’s agreement to “donate” land (exactions) or cash in-lieu fees (aka “impact fees”).  These demands only pass muster under the Fifth Amendment when they meet two requirements:

1.  They must have a logical connection (nexus) to the proposed development, and

2.  They must be be roughly proportional to the impact anticipated to be created by the proposed use. 

These requirements were first enunciated by the Court in Nollan v. California Coastal Comm’n and Dolan v. City of Tigard, respectively. 

They are designed to limit the obvious potential for abuse: if the government has unfettered ability to condition use permits on the owner’s concession to turn over property or money, the result, as the Court pointed out in Nollan, would be an “out-and-out plan of extortion,” and an impermissible burden on an owner’s right to make reasonable use of his or her own property. 

An example from my own experience: in a case involving an owner’s request to develop its own property, the head of the planning department testified that permission would not be forthcoming unless and until the owner agreed to give up “the goodies” (his word, not mine) for a public park, which just happened to be the most valuable portion of the parcel.  This illustration highlights another rationale for the exaction limitations — the legitimate concern that exactions would substitute as a compensation-and-due-process-free shortcut to an exercise of eminent domain power.  If the city needed a public park, it should have condemned and paid for it, not exacted it from the owner as a condition of use.  The Nollan/Dolan rules were meant to curb just this sort of demand.

The Drebick petition presented two questions: whether cash in-lieu fees are exempt from Nollan/Dolan, and whether exactions imposed by a legislature are similarly immune(disclosure: Pacific Legal Foundation filed the Drebick petition).

Denials of cert do not establish precedent, so today’s action has no effect on the law in other cases.   

Sidebar: commenting on the decision, PropertyProf Blog cheekily suggests the Court not grant review to another takings case for a few years to permit the lower courts to flush out doctrine, and to allow legal scholars to focus on other interests for a while.  Not to worry: the Kelo-Lingle-San Remo triad may have dampened whatever mojo the federal courts had for eminent domain and regulatory takings cases, even though there remain many issues, like those in the Drebeck petition, deserving of resolution.  In-lieu fees are a favorite of local governments (especially in Hawaii), even though they are of questionable constitutionality.

     Continue Reading ▪ Cert Denied in Exaction Appeal

Professor Ilya Somin has posted a summary of a recent Fifth Circuit decision upholding an exercise of eminent domain for economic development because it was in accordance with an integrated plan.

Justice Stevens’ Kelo opinion took great effort to analogize New London’s exercise of eminent domain with the Euclidean zoning process.  Those of us who practice land use law know that in order to pass Constitutional muster, zoning must be neutral, transparent, and comprehensive, or else it is subject to a due process challenge. The case that gave us this standard and upheld zoning, and is still the touchstone of comprehensive planning, is the 1926 case Village of Euclid v. Ambler Realty Co., upholding citywide zoning against a due process challenge.

The limitation on the government’s power, and the basis for a court’s deferral to the legislative judgment of the legislative branch, is that zoning of property is supposedly comprehensive and part of a larger plan.  In the absence of comprehensiveness, zoning would violate due process.  Justice Stevens refers to Euclid expressly as a reason why the taking in Kelo was for a public use/purpose.  Look to the language in his recitation of the facts, where he repeatedly emphasizes the “neighborhood meetings,” the “integrated development plan,” the “carefully considered development plan,” and that “The City has carefully formulated an economic development plan,” etcetera.

Property owners can still challenge a zoning ordinance as a due process violation, or as “spot zoning,” which has constitutional overtones.  A good example is the 1996 case from the New York Court of Appeals, Town of Orangetown v. Magee, 665 N.E.2d 1061, where the court held that public opposition to a vested development project was the reason for the town’s behavior, not comprehensive planning.

In the post-Kelo world will property owners have to prove “spot takings” in order to prevail under the Public Use clause of the Fifth Amendment?

     Continue Reading ▪ Spot Takings and Kelo

The Supreme Court of Hawaii issued four decisions in legal challenges to the recent primary elections, two in the election of Kauai’s mayor, and two in statewide elections.  Election challenges are original proceedings, so the court issued Findings of Fact and Conclusions of Law, rather than the usual opinion of the court.  The court made short work of the challenges. 

There are two holdings of interest. 

First, that Haw. Rev. Stat. § 11-173.5(b) provides for only one remedy for “primary election irregularities” — the court may decide who was elected. 

. . .

(b) In primary and special primary election contests, and county election contests held concurrently with a regularly scheduled primary or special primary election, the court shall hear the contest in a summary manner and at the hearing the court shall cause the evidence to be reduced to writing and shall not later than 4:30 p.m. on the fourth day after the return give judgment fully stating all findings of fact and of law. The judgment shall decide what candidate was nominated or elected, as the case may be, in the manner presented by the petition, and a certified copy of the judgment shall forthwith be served on the chief election officer or the county clerk, as the case may be, who shall place the name of the candidate declared to be nominated on the ballot for the forthcoming general, special general, or runoff election. The judgment shall be conclusive of the right of the candidate so declared to be nominated; provided that this subsection shall not operate to amend or repeal section 12-41.

In the Hoff case, the plaintiff had asked for an audit of the Kauai mayoral primary, in which the incumbent received a one vote majority, so was elected outright.  The Taylor complaint asked for an investigation.  Since neither sought a decision about who was elected, the court entered judgment in favor of the county clerk. 

Second, the court held that in order to state a claim for relief under Haw. Rev. Stat. § 11-172 the plaintiff must demonstrate “errors, mistakes or irregularities that would change the outcome of the election,” and that this must be “actual information of mistakes or errors sufficient to change the result.”  Quite a burden, since Haw. Rev. Stat. § 11-173.5(b) requires such challenges to be filed within six days after the election:

(a) In primary and special primary election contests, and county election contests held concurrently with a regularly scheduled primary or special primary election, the complaint shall be filed in the office of the clerk of the supreme court not later than 4:30 p.m. on the sixth day after a primary or special primary election, or county election contests held concurrently with a regularly scheduled primary or special primary election, and shall be accompanied by a deposit for costs of court as established by rules of the supreme court. The clerk shall issue to the defendants named in the complaint a summons to appear before the supreme court not later than 4:30 p.m. on the fifth day after service thereof.

Since the plaintiffs did not provide “actual information” — only allegations — they lost their challenges.

The decisions are posted here (look for the Hoff, Taylor, Saunders, and Cunningham links posted on 10/10/2006 and 10/11/2006). 

   Continue Reading ▪ Elected, Not Selected

“Man bites dog” story of the day: Kauai developer to require ag use on ag land. It’s a different twist since most of the controversy regarding “farm dwellings” and ag uses these days goes in the other direction:

The developers of the Kealanani agricultural subdivision hope to break a tradition in which agriculture-zoned lots are sold as country estates with little if any assurance that agricultural production will take place.

Their goal: to sell view lots for premium prices, but to come as near as possible to an ironclad requirement that owners farm on the property.

. . . .

The developers clearly are trying to break the image of “agricultural subdivision” as code for “rich-folks’ estates.” Thus far, their project has generated virtually none of the rancor that has attended projects like the Big Island’s Hokuli’a. At one point, that project was halted by a court order that said it was actually an illegal use of lands earmarked by the state for agriculture.

A settlement in the case eventually allowed the project to continue, but for critics, the development remains an illustration of the so-called “fake farms,” large homes built on agricultural lands where only nominal farming is done in a show of conforming to a state requirement that homes on agricultural lands must be “farm dwellings.”

The Kealanani development’s owners association will have the ability to fine owners who fail to fulfill their agricultural commitments, Kyno said.

The enforcement mechanism will presumably be restrictive covenants (CC&Rs), but this project should not raise the Act 5 issue, which is designed to invalidate CC&Rs that prohibit (not require) ag uses on ag lands.  More on ag subdivisions, CC&Rs, and Act 5 here.

     Continue Reading ▪ Man Bites Dog: Ag Uses to be Required on Ag Land

The NY Times posts this article, attempting to put the RLUIPA debate into larger context, focusing on a church in Boulder, Colorado that is running into opposition to its expansion plans from the local land use regulators. 

RLUIPA requires local land use decisions that impact religious uses to meet the “strict scrutiny” test — precise tailoring to further the stated government interest, while minimizing the impact on religious freedom.  The Ninth Circuit recently held RLUIPA constitutional in a decision regarding a Sikh temple in rural California, invalidating the local government’s refusal to allow construction.

  Continue Reading ▪ Religion vs Land Use Regulation

A panel of the U.S. Court of Appeals for the Ninth Circuit today ruled 2-1 that the U.S. Army must complete a more comprehensive Environmental Impact Statement (EIS) before “planning its programs to modernize and streamline its forces, while simultaneously maintaining readiness.”

In Ilioulaokalani Coalition v. Rumsfeld, (Oct. 5, 2006), the two judge majority wrote:

[w]hile the metamorphosis of the Army and the strategic planning accompanying this transformation is the business of the Army, not the courts, the Army’s compliance with NEPA does involve us.

The case involves the transformation of the 25th Infantry Division’s 2d Brigade to a Stryker unit.  Hawaii environmental groups challenged the Army’s environmental reviews as insufficient.  While the Army accomplished environmental reviews, the Ninth Circuit held that these reviews did not consider “all reasonable alternatives to transform the 2d Brigade in Hawaii . . . most notably the potential for transforming the 2d Brigade outside of Hawaii.”  The majority said the Army failed to answer the foremost question, “why Hawaii?.”

The dissenting judge stated:

In the name of environmental “concerns,” [footnote omitted] the majority would require the Army to consider what it has already reasonably rejected: whether it should consider moving Army units around the country for the new training — regardless it would cause delay in modernizing, lack of combat-readiness and entail prohibitive costs — because of possible environmental impacts training “in place” would cause.

The court remanded the case to the District Court, and required the preparation of a supplemental EIS, which could take two years.

        Continue Reading ▪ 9th Circuit: Army Needs Better Environmental Review

According to this story, the County of Maui is in the process of revising its shoreline setback rules.

The county’s shoreline setback rules determine where beachfront landowners can build on their property. The current formula to determine a setback is 20 feet, plus 50 times the annual erosion rate of the property. The minimum setback is 25 feet, while the maximum is 150 feet.

The proposed amendments include increasing the base used in the setback formula from 20 to 25 feet.

Abbott said the change was needed because some landowners whose properties had zero erosion have argued they should have a 20-foot setback based on the formula.  He said the change would make the formula consistent with the minimum setback.

As I recently posted here, shoreline legal issues are a touchy subject, but in the rush to “protect” beaches, you cannot just blow by the property rights of owners.  Government escapes liability for regulations imposing “no build” easements (setbacks being a classic example) only to the extent that the regulation is closely tailored.  The reason advanced for Maui’s variable setback rules is the supposed history of beachfront erosion at particular locations, with a fixed “buffer zone” plus historical erosion rates added together to calculate the “no build zone” on a specific parcel.  The major justification for setbacks is protecting the homeowner from building on property that may eventually be eroded.

If so, it seems odd that if a shoreline parcel has had “zero erosion” that the owner should be subject to a setback at all.  What harm is caused by building where there has been no erosion, and what danger is being prevented?

    Continue Reading ▪ Review of Maui Shoreline Setback Rules Underway

Shoreline and beach issues in Hawaii are a sensitive and often heated topic.  It is natural that in an island state with 1,052 miles of coastline, people get passionate about beaches, especially when the economy relies in large part on images of sandy shores and beautiful ocean. 

But the very things that make Hawaii beautiful, just as naturally, also attract people who want to live near those beaches and ocean.  A recent story in the Honolulu Advertiser, Erosion hasn’t slowed shoreline construction, highlights many of the competing concerns when the desire to protect the shoreline runs into people’s homes: on one hand, the public is concerned about the perceived “loss” of sandy beaches, while on the other, the existing homes of shoreline property owners may be in danger, while other owners may be prevented by restrictive regulations from building upon their undeveloped property. 

That is not a recipe for compromise, or even reasoned discourse.  What I said in the July 2006 ABA Journal — in a story about seawalls and property rights in Florida — is just as true in Hawaii:

“It’s hard to find a middle ground on this,” . . . “Every time someone sneezes on the shoreline, it’s front-page news.”

In Hawaii, all beaches are public up to the “high wash of the waves,” as usually evidenced by the vegetation line.  This differs dramatically from the rule in other states, where the public beach ends at the mean high water mark. 

Several years ago, the Hawaii Supreme Court revisited the long-standing rule and “reinterpreted” a phrase (“ma ke kai“) to mean upper reaches of the wash of the waves, not mean high water mark.  The public-private boundary In Hawaii can therefore be much further mauka (inland) than in other states.  And as shorelines erode, this public-private boundary can move and encroach further on private property. Note: as shorelines accrete, the public-private boundary should, conversely, move further makai (seaward).  However, in 2003 the Hawaii Legislature enacted Act 73, which altered these age-old rules.  For a related post on a circuit court’s striking down of Act 73, go here.

Shoreline legal issues, like the shorelines themselves, are in flux.  The State Board of Land and Natural Resources recently revised its administrative rules regarding the definition of shoreline for certification and setback purposes to conform more closely to the common law definitions established by the courts.  These rules and other proposed regulations have not yet been challenged in the courts. 

My Damon Key colleague Sat Freedman has posted a very good primer on the subject of Shorelines, Setbacks, & Seawalls, detailing the different definitions of “shoreline” (setback vs public-private boundary), how Hawaii’s counties handle the administration of setbacks, and how seawall construction and other property protection measures may be impacted by restrictive regulation. 

In the back-and-forth on the issue, the question of the property rights of the owners of shoreline property should not get pushed aside.  The Fifth Amendment to the U.S. Constitution and article I, section 20 of Hawaii’s Constitution provide that private property may not be taken for public use without just compensation.  Property may be taken by overbearing regulation as well as outright confiscation (also known as a “regulatory taking” or “inverse condemnation” — so yes, you have reached the right blog), and the issue of whether the government has gone too far and crossed the line between permissible regulation and confiscation is sure to arise again.  The public often clamors for expansion of the public beach, with little to no concern shown for the property owners who are called upon to sacrifice their property upon the altar of the “public good” usually with no compensation. 

Those fortunate enough to own beachfront property — whether they are recent purchasers or long-time local residents (the law makes no distinction) — must vigorously protect their rights to insure they alone are not forced to bear the cost of a desired public benefit.Continue Reading ▪ Protecting Property Rights in Beachfront Land

More on Leslie v. Board of Appeals, 109 Haw. 384, 126 P.3d 1071 (2006), discussed previously in this post.

The property owner’s subdivision application included a portion of its parcel within the shoreline Special Management Area (SMA), even though all of the construction was planned outside the SMA.

One of the major purposes of Hawaii’s Coastal Zone Management Act (CZMA) is to encourage development mauka (upland) of the SMA, the land closest to the ocean.  The SMA boundary is the critical line in the sand – a property owner need only seek a SMA permit for “development within the SMA” as required by the CZMA if it plans development makai (oceanward) of this boundary.  It appeared the property owner proposed development as contemplated by the CZMA — all of it was mauka of the SMA line.

The county determined that the subdivision of Kiilae’s land was not “development within the SMA” since no actual construction was proposed within the SMA, and did not require the property owner to apply for a SMA permit.  However, a portion of the property being subdivided was within the SMA, even though no actual construction was planned on that parcel.

The issue before the supreme court was whether the subdivision of a parcel, a portion of which is within the SMA, requires a SMA permit.  The court held that because the owner sought subdivision of the entire parcel — its application included a portion of that parcel which was within the SMA — the impact of the entire proposed subdivision must be taken into account when determining whether a permit must be sought. 

This result, like the subdivision issue, was based on the language of the statute.  The property owner’s subdivision application included property within the SMA, and the statutory definition of “development” includes subdivision.  Once that fact was established, the result was consistent with the court’s reliance on plain stautory language.  It would have been another matter entirely, however, if the SMA portion of the property had first been subdivided out, and no part of the subdivided property was within the SMA, even if the act of subdivision were to have some effects on property within the SMA.

Thus, the second lesson that can be taken from the Leslie case is that a property owner must pay close attention to what property is included in an application, because it will be held to it. 

Disclosure: I filed an amicus brief in this appeal, supporting the position of the property owner and the county.

   Continue Reading ▪ SMA: The Line in the Sand

“When all else fails, read the instructions.” 

That old adage is the first lesson to be taken from the Supreme Court of Hawaii’s decision earlier this year in Leslie v. Board of Appeals, 109 Haw. 384, 126 P.3d 1071 (2006). Disclosure: I filed an amicus brief in that case, supporting one the arguments of the property owner and the county on a different issue. 

The case began when Kiilae Estates asked the County of Hawaii to approve a subdivision of its land.  The county subdivision code contains a long list of information that “shall” be submitted with preliminary subdivision plats.  The long-standing practice of the county Planning Department, however, was to defer submission of these materials until after the review of the preliminary subdivision plans.  It made more sense, the Department claimed, to wait until later in the process when the developer’s plans are more complete, and thus the information would be more useful to planners.    Continue Reading ▪ Court to Government: Read the Statute