Symposium

0 Comments | Insight on the News, Feb 11, 2002 | by Harold Johnson, | Timothy J. Dowling

With the blessing of Congress, Nevada and California created the Tahoe Regional Planning Agency and directed it to establish a regional-development plan to protect the lake. The agency imposed a 32-month moratorium, from 1981 to 1984, to preserve the status quo on environmentally sensitive land while it prepared the regional plan. The trial court found that, given the scientific complexities involved, the 32-month moratorium was a reasonable, proportional and good-faith effort to protect the lake pending completion of the plan.

The federal appeals court that heard the case ruled that such moratoria do not constitute a taking because they preserve future development, which translates into substantial present value for affected landowners. The appellate court concluded that "given the importance and long-standing use of temporary moratoria, courts should be exceedingly reluctant to adopt rulings that would threaten the survival of this crucial planning mechanism."

The planning agency, the state and local government communities and others who support the agency have argued before the U.S. Supreme Court that although compensation is warranted where moratoria truly are confiscatory or a mere sham to disguise permanent restrictions, reasonable moratoria are not takings. This position is consistent with common sense and decades of virtually unanimous legal precedent.

In contrast, the Tahoe landowners and so-called property-rights groups argue that every moratorium is a taking, no matter how reasonable in scope and duration, no matter how slight the impact on the landowner and no matter how important the underlying government purpose. Under this reading, compensation in the form of fair rental value would be due even where the landowner was completely unaware of the moratorium or otherwise suffered no harm. For example, in the Tahoe case the trial court found that the average holding period for property in the Tahoe Basin is 20 years; a 32-month moratorium would not upset the expectations of most landowners. Not surprisingly, the Supreme Court justices gave the landowners' position a chilly reception at the Jan. 7 argument in the case.

The landowners assert that the 1987 First English ruling requires compensation for temporary moratoria. But First English holds only that compensation is required for a taking, and it expressly left unaddressed when land-use regulation works amount to a taking. The landowners also contend that compensation is due under a case called Lucas v. South Carolina Coastal Council (1992), but that ruling is limited to situations in which land is rendered valueless. The Tahoe landowners failed to introduce a shred of evidence that the 32-month moratorium reduced the value of their land, much less rendered it worthless. As is often the case in high-profile takings disputes, the so-called property-rights movement has tried to skew the debate by bending the truth, suggesting that none of the Tahoe claimants can build on their land even today. In fact, most of these landowners sold their property for more than their purchase price, and most of the rest now may build on their land.