Out to change the law of the land - property rights movement - Cover Story

Insight on the News, May 17, 1993 by Richard Miniter

Nick Codd just wanted to build a house on a quarter-acre waterfront lot owned by his family in Severna Park, Md. He had played on it as a child and told himself that he would build on it someday.

That day came in 1988, when his family agreed to let him start work. He spent the next two years designing his dream house, modeled after a Louisiana colonial home he came across while studying architecture at a community college. "I'm a frustrated architect," says Codd, an optician.

But Codd has yet to break ground. For the past three years he has been fighting the state government for the right to build on the land his parents bought more than 30 years ago. He applied for permits from the county, the state and the federal government -- all of which were approved, except for one from the Maryland Department of Natural Resources, which found that Codd's small parcel lies within a 100-foot buffer area of the Severn River and therefore doesn't comply with recent amendments to Maryland's Critical Areas Law.

Bounded by two large houses on one side and roads on two other sides, Codd's plot is hardly an undeveloped environmental jewel. The cove it sits on, which opens onto the Severn River, is ringed with houses and docks. His lot is the last one left to develop in the area. "And it's been zoned residential for decades," says Codd. Still, both state and federal government officials have refused to compensate him for the land or to let him build.

Codd, who has lived in Severna Park all his life, never expected to become embroiled in a bureaucratic battle. He had already spent tens of thousands of dollars on engineering and site plans before he was told that the lot couldn't be developed or sold. He turned to his attorney and friend, Bryson F. Popham, whom Codd has known since grade school, for help.

It all began when Codd was told by Anne Arundel County officials that because his property is mostly wetland, to build on it he would need a permit from the Army Corps of Engineers. The corps reviewed his plan and called for comments from the public and government agencies.

On the last day of the 45-day comment period, Elder Zhigarelli of the Department of Natural Resources decided to weigh in. Zhigarelli is responsible for interpreting the Critical Areas Law, which incorporates the federal Coastal Zone Management Act, an obscure 1972 law designed to protect the nation's coast from erosion. Zhigarelli took the next five months to study the environmental impact of Codd's plan and, near the end of the legally permitted review period of six months, ruled that Codd was in violation of both state and federal law. (Zhigarelli did not return phone calls.)

Codd appealed to the U.S. Department of Commerce, which oversees state and federal enforcement of the Coastal Zone Management Act. If he exhausts all his appeals, Codd intends to sue for compensation.

Codd's case is one of a growing number of hard-luck stories that are energizing a grass roots property rights movement. The movement is gathering steam as more and more landowners find they cannot develop their property or expand their homes because of environmental regulations.

For a long time, all landowners such as Codd could do was complain. But recently, courts have begun to reconsider the rights of property owners and award them compensation. Judges base their findings on a new understanding of what lawyers call the "takings clause," which is found in the Fifth Amendment of the Constitution. The clause reads: "Nor shall private property be taken for public use, without just compensation."

When the government condemns land to build a highway, that is considered to be a "taking," and the government is required to pay "just compensation," which courts determine by calculating the "fair market value" of the land.

Other benefits to the public, such as environmental restrictions, which lower the resale value of property but do not take title to it, traditionally have not been eligible for compensation under the takings clause. Federal courts have awarded more than $155 million in compensation because of environmental restrictions since 1990, though all of these cases have been appealed.

(Not all regulations that lower property values are considered takings by the courts. Regulations that deny the so-called "noxious use" of property, such as one barring incinerators in residential neighborhoods, can be enforced without providing compensation.)

The biggest change in takings law came when developer David Lucas bought two waterfront lots on a barrier island off the coast of South Carolina. Shortly after he invested about $1 million in land on which he hoped to build two houses, the South Carolina Coastal Council, a state agency, decreed that in order to protect the state's shoreline, no more houses could be built on barrier islands. The council had effectively wiped out Lucas's investment, and he sued for compensation.

Lucas counted on a number of facts to win his case. The land he bought had long been zoned for housing, he had all the appropriate permits and there were houses on both sides of the parcels he wanted to develop. He lost in South Carolina's Supreme Court, but appealed all the way to the U.S. Supreme Court, where he won.