The city argues that the ordinance at issue here is a valid exercise of municipal power to ameliorate a nuisance, namely criminal activity in a residential neighborhood. Zeman does not challenge this characterization, but points to the fact that the city erroneously employed its own ordinance. This seems to us to be irrelevant: if the ordinance indeed is a proper effort to protect the health, morals, or safety of the community which has the effect of prohibiting a particular use of a property, then there will be no taking. See Mugler, 123 U.S. at 661-62.
The first two of the Penn Central factors involve the economic impact of the regulation on the person suffering the loss and the extent to which the regulation interferes with distinct investment backed expectations. Penn Central, 438 U.S. at 124-25. Certainly, as Zeman's witness testified, the economic impact on Zeman has been substantial; the best use for his property is as an apartment building, and without a rental dwelling license he cannot operate it as such. Moreover, rezoning of the property for another use is unlikely and, given the economically depressed nature of the neighborhood, so too would be locating a buyer. Also, as Zeman has operated this property as a rental dwelling since acquiring it in 1975, it would appear that he has some investment-backed expectations in its use as such. Thus, the first two Penn Central factors militate towards a decision in Zeman's favor.
Consideration of the third factor, the character of the government action, however, favors the city. Under this factor, we must examine the regulation at issue, with emphasis on its purpose and the possibility of achieving that purpose with this regulation. While this is always an important consideration in a takings analysis, in cases involving a regulation aimed at the protection of the public health and safety, it becomes paramount. If the state regulation appears genuinely designed to prevent harm to the public and is likely to achieve that goal and the harm suffered by the property owner does not appear to be one that should be borne by the entire community, we will not find a taking. See, e.g., Mugler, 123 U.S. at 661-62; Keystone Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. 470, 488-93 (1987).
Mugler held that a state could prohibit a use of a property that it determined to be injurious to community health, morals, or safety and, therefore, although enforcement of a statute prohibiting the manufacture of alcohol against Mugler, a beer maker, would substantially depreciate the value of his property, no taking occurred. Mugler, 123 U.S. at 656-57, 668-69. Since Mugler, the Court has upheld as valid state regulatory efforts -- denying compensation for alleged takings -- the destruction of infected trees jeopardizing local orchards, Miller v. Schoene, 276 U.S. 272, 279-80 (1928), the banning of brickyard plant operations in urban areas, Hadacheck v. Sebastian, 239 U.S. 394, 410-11 (1915), and strict limitations on coal mining activities, Keystone, 480 U.S. at 485.
A harm-prevention regulation, if not a ruse for a state purpose other than protecting the public from noxious harm or illegal activity, is a powerful rationale militating against finding a taking. See Bruce W. Burton, Regulatory Takings and the Shape of Things to Come: Harbingers of a Takings Clause Reconstellation, 72 Ore. L. Rev. 603, 618-19 (1993). A reviewing court must look to the nature of the regulation with an eye on its purpose and the probability of achieving that purpose with this regulation. If the regulation is drawn to prevent harm to the public, broadly defined, and seems able to achieve this goal, then a taking has not occurred. See, e.g., Keystone, 480 U.S. at 488-93.
