The three-part Penn Central test for an ad hoc regulatory taking tasks courts with evaluation of the economic impact of the regulation on the property's use, the property owner's distinct investment-backed expectations, and the character of the government action. Throw all of these "factors" into a pot, stir, and voila, the answer of whether the regulation goes "too far" is supposed to emerge. But try as they might, many courts don't really have a good idea of how to apply this test, even though in Lingle, the Supreme Court affirmed that it remains the "default" analysis to evaluate most takings claims.
The latest regulatory takings opinion from the Ninth Circuit, Laurel Park Community, LLC v. City of Tumwater, No. 11-35466 (Oct. 29, 2012) is another example of a court applying the test, in this case to evaluate property owners' claims that the enactment of a new zoning ordinance was a facial taking. Whether it does so correctly, or whether it adds to the growing list of courts that simply don't know what to do with Penn Central, we leave to you.
Tumwater, Washington has more than a few mobile home parks, and some of those had plans to close. The residents of the parks, and the park owners had different responses to these plans:
Mobile home owners tended to seek protection from park closures, while park owners tended to emphasize respect for private property and the legal limits on property restrictions.
The residents succeed in getting the city council to adopt two new ordinances, creating a new zoning category, "Manufactured Home Park." Six of Tumwater's ten mobile home parks were subject to this new zoning. Previously, the parks were subject to a variety of zoning restrictions, allowing "a wide range of uses ... including multi-family residences and other dense types of developments." The new MHP zoning severely restricted those uses:
First, the ordinances specify certain “permitted uses,” which are allowed as of right: manufactured home parks, one single-family dwelling per lot, parks, trails, open spaces, other recreational uses, family child care homes, and child mini-day care centers. Second, the ordinances specify 11 “conditional uses,” which are allowed via a discretionary conditional use permit: churches, wireless communication facilities, cemeteries, child day care centers, schools, neighborhood community centers, neighborhood-oriented commercial centers, emergency communications towers, group foster homes, agriculture, and bed and breakfast establishments. Third, the ordinances permit still other uses if specified criteria are met:“The City Council may approve the property owner’s request for a use exception if the property owner demonstrates a. they do not have reasonable use of their property under the MHP zoning; or b. the uses authorized by the MHP zoning are not economically viable at the property’s location.”
Several of the owners of the parks subject to the new ordinances asserted they effectively prohibited them from closing and using their properties for other uses, and therefore effected a Fifth Amendment taking and violated the state constitution. They sued in federal court. (How, we ask, given Williamson County? But the court doesn't tell us.)
The District Court granted summary judgment to the city, and applying the Penn Central three-part test, the Ninth Circuit affirmed.
The court held that the plaintiffs really didn't offer much evidence of the economic impact of the ordinances on their properties, noting that diminution in value as a result of the application of a zoning ordinance alone does not mean there's been a taking, and "[a]t best, Plaintiffs have presented information that reflects and economic loss of less than 15% with respect to one of the three Plaintiff properties and no effect on the other two Plaintiff properties or the properties of the remaining affected MHP parks." Slip op. at 12970 (emphasis original).
The court next held that the property owners' expectations that they could make more intensive use of their properties under the old zoning regime were speculative ("that at some indefinite time in the future they could convert their properties to some other specific uses"), and that the new ordinances did not interfere with their "primary expectation concerning the use of the parcel" (a mobile home park). Slip op. at 12971.
Finally, the court evaluated the character of the government action. "As a practical matter, Plaintiffs must continue to use their properties as manufactured home parks. Indeed, that was the intended effect of the ordinances." Slip op. at 12973. The court concluded that this factor "slightly favors [the property owners'] taking claims." Id. at 12972. The benefit the ordinance confers on the residents (continued ability to be housed in a mobile home park) could be distributed more widely, but "[t]hat analysis goes only so far." The ordinances do not require that the property owners to keep using their properties as mobile home parks, but allows them, with restrictions, to convert to some other use.
The court also affirmed dismissal of the takings and substantive due process claims under the state constitution.
Laurel Park Community, LLC v. City of Tumwater, No. 11-35466 (9th Cir. Oct. 29, 2012)
