Existing uses and the limits of land use regulations

New York University Law Review

Volumn 84, Issue 5, 2009, Pages 1222-1291

  Christopher, Serkin ^a  

^a UNIVERSITY OF CHICAGO LAW SCHOOL   (United States)

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EID: 70450239866     PISSN: 00287881     EISSN: None     Source Type: Journal    
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References (562)

1. See, e.g., Hooper v. City of St. Paul, 353 N.W.2d 138, 140 (Minn. 1984) (referring to "constitutional protection afforded existing uses"
2. citing County of Freeborn v. Claussen, 203 N.W.2d 323, 325 (Minn. 1972)
3. 325 (Minn. 1972).
4. Rudolf Steiner Fellowship Found, v. De Luccia, 685 N.E.2d 192, 197 (N.Y. 1997) (Bellacosa, J., dissenting) ("It is the law of this state that nonconforming uses or structures, in existence when a zoning ordinance is enacted, are, as a general rule, constitutionally protected and will be permitted to continue, notwithstanding the contrary provisions of the ordinance." (
5. citing People v. Miller, 106 N.E.2d 34, 35 (N.Y. 1952)
6. 106 N.E.2d 34, 35 (N.Y. 1952)
7. Harbison v. City of Buffalo, 152 N.E.2d 42, 44 (N.Y. 1958) ("When zoning ordinances are initially adopted to limit permissible uses of property, or when property is rezoned ... to prevent uses of property previously allowed, a degree of protection is constitutionally required to be given owners of property then using their premises in a manner forbidden by the ordinance.");
8. Snake River Brewing Co. v. Town of Jackson, 39 P.3d 397, 403 (Wyo. 2002) ("When a zoning ordinance is enacted, it cannot outlaw previously existing non-conforming uses. This right to continue a non-conforming use is a vested property right, protected by statute, and by both federal and state constitutions." (citations and internal quotation marks omitted)).
9. For discussion of these doctrines, see infra Part I.
10. Some specific doctrines related to existing uses have received serious study, however. For example, the doctrines governing the treatment of prior nonconforming uses, which are the subject of Part I.B, infra, have received significant attention.
11. See, e.g., MASS. GEN. LAWS ANN. ch. 4OA, § 6 (West 2004) (forbidding zoning ordinances to apply to structures "lawfully in existence or lawfully begun" before first notice of new law, but requiring their application to "any change or substantial extension of such use");
12. N.J. STAT. ANN. § 40:550-68 (West 2008) ("Any nonconforming use or structure existing at the time of the passage of an ordinance may be continued upon the lot or in the structure so occupied and any such structure may be restored or repaired in the event of partial destruction thereof.");
13. Rourke v. Rothman, 859 N.E.2d 821, 822 n.5 (Mass. 2007) (citing statute that "sets the floor for 'grandfather' protection in local zoning bylaws");
14. see also Ferraro v. Bd. of Zoning Adjustment, 970 So. 2d 299, 310 (Ala. Civ. App. 2007) ("Generally, nonconforming uses of property are 'grandfathered' under zoning ordinances and not lost unless the owner abandons that use.");
15. Manhattan, Inc. v. Shelby County, No. W2006-02017-COA-R3-CV, 2008 WL 639791, at *7 (Tenn. Ct. App. Mar. 11, 2008) (noting that local zoning ordinances "specifically permit a lawful use in existence at the time of any zoning change to continue after the change, i.e., 'grandfathered' nonconforming use, with certain restrictions").
16. See Ex parte Ala. Alcoholic Beverage Control Bd., 819 So. 2d 50, 52-53 (Ala. 2001) (upholding Control Board's denial of expansion of nonconforming use but recognizing store as valid nonconforming use allowed to operate);
17. Brewster v. Fayette County Bd. of County Comm'rs, No. W2003-01842-COA-R3-CV, 2005 WL 873224, at *1 (Tenn. Ct. App. Apr. 14, 2005) (holding that previously "grandfathered" grocery store on property could not reopen without demonstrating continuous use of property). This rule is subject to various techniques - like amortization - that local governments can, in fact, use to eliminate existing uses. See infra Part I.B (discussing amortization).
18. For a more emotional example, consider a co-op board seeking to enforce a new nopets policy. There is little doubt in most jurisdictions that such policies are permissible prospectively, but it is another matter entirely to apply the policy against existing pets.
19. See, e.g., Winston Towers 200 Ass'n v. Saverio, 360 So. 2d 470, 470-71 (Fla. Dist. Ct. App. 1978) (holding invalid attempt to fine condo owner for keeping puppy of dog grandfathered into co-op's no-pet policy),
20. cited in ROBERT C. ELLICKSON & VICKI L. BEEN, LAND USE CONIROLS 597 (3d ed. 2005);
21. Young v. Savinon, 492 A.2d 385, 390 (N.J. Super. Ct. App. Div. 1985) (invalidating no-pets provision in lease renewal as applied to existing dogs). For a particularly funny examination of no-pet policies, see The Daily Show with Jon Stewart: Rent Claws (Comedy Central television broadcast Mar. 29, 2004), available at http://www. thedailyshow.com/video/index.jhtml?title=rent- claws&videoId=124322.
22. See 7 PATRICK J. ROHAN, ZONING AND LAND USE CONTROLS §41.01 [2], at 41-47 (2009) ("If the goal of [zoning] regulations was to ensure uniformity of all uses in a particular district, dissimilar existing uses would detract from that purpose as much as new uses.");
23. Christopher Serkin, Local Property Law: Adjusting the Scale of Property Protection, 107 COLUM. L. REV. 883, 940 (2007) ("The extent of existing development in developed cities means that changes in applicable zoning must either include an enormous number of nonconforming uses-potentially undermining the efficacy of the zoning regime-or come with some plan for eliminating the nonconforming uses over time.");
24. see also Cohen v. Duncan, No. Civ.A.2002-599, Civ.A.2001-380, 2004 WL 1351155, at *15 (R.I. Super. Ct. June 9, 2004) ("The restrictive provisions of the [ordinance properly recognize that '[nonconforming uses are a thorn in the side of proper zoning and should not be perpetuated any longer than necessary.'" (second alteration in original) (internal citation omitted)).
25. The Supreme Court originally justified zoning as separating incompatible neighbors, noting that a "nuisance may be merely a right thing in the wrong place, like a pig in the parlor instead of the barnyard." Vill. of Euclid v. Ambler Realty Co., 272 U.S. 365, 388 (1926);
26. see also David P. Bryden, The Impact of Variances: A Study of Statewide Zoning, 61 MINN. L. REV. 769, 771-72 (1977) (describing use of variances as "especially dangerous because they jeopardize zoning's primary purpose: separating incompatible land uses").
27. See infra note 40 and Part IV.A (discussing transitions literature). Academic writing on legal transitions has tended to focus both on changes in tax rules and on changes in property rules, with the latter squarely implicating the Takings Clause and the extent of protection from regulatory change.
28. See generally, e.g., DANIEL SHAVIRO, WHEN RULES CHANGE: AN ECONOMIC: AND POLITICAL ANALYSIS OF TRANSITION RELIEF AND RETROACTIVITY (2000) (discussing changes to tax rules);
29. Louis Kaplow, An Economic Analysis of Legal Transitions, 99 HARV. L. REV. 509, 517 (1986) (discussing changes to property rules).
30. See generally, e.g., Jonathan Remy Nash & Richard L. Revesz, Grandfathering and Environmental Regulation: The Law and Economics of New Source Review, 101 Nw. U. L. EV. 1677 (2007) (discussing harms of grandfather clauses in recent legislation).
31. See id. at 1729 (discussing how Bush administration policies exacerbated this problem).
32. 42 U.S.C. §§ 7401-7671q (2006).
33. 42 U.S.C. § 7411(a)(3) (2006) (defining stationary source). Existing uses are subject only to state implementation of ambient air quality requirements and not to the stricter emissions reduction requirements for new sources, which are set by the federal government.
34. See Deepa Varadarajan, Note, Billboards and Big Utilities: Borrowing Land-Use Concepts To Regulate "Nonconforming" Sources Under the Clean Air Act, 111 YALE L.J. 2553, 2558 (2003).
35. 42 U.S.C. § 7411(a)(2), (4) (2006) (defining new source as any source "the construction or modification of which is commenced after publication of regulations" and defining modification as "any physical change in, or change in method of operation of, a stationary source which increases the amount of air pollutant emitted"). This is like the converse of the vested rights doctrine, discussed in Part LC, infra.
36. 33 U.S.C. §§ 1251-1387 (2006).
37. 33 U.S.C. § 1316(d);
38. see also Nash & Revesz, supra note 10, at 1728-1729 (discussing grandfathering provisions in Clean Water Act).
39. See Heidi Gorovitz Robertson, If Your Grandfather Could Pollute, So Can You: Environmental "Grandfather Clauses " and Their Role in Environmental Inequity, 45 CATH. U. L. REV. 131, 132-33 & nn.8-15 (1995) (providing examples of grandfather clauses from various legal contexts);
40. Steven Shavell, On Optimal Change, Past Behavior, and Grandfathering, 37 J. LEGAL STUD. 37, 69-70 (2008) (same).
41. 42 U.S.C. § 12101-12213 (2006).
42. See 28 C.F.R. § 36.304 (2008) (implementing Title III of Americans with Disabilities Act; requiring existing buildings to "remove architectural barriers in existing facilities" but only "where such removal is readily achievable, i.e., easily accomplishable and able to be carried out without much difficulty or expense");
43. see also John Grady & Damon Andrew, Legal Implications of the Americans with Disabilities Act on Recreation Services: Changing Guidelines, Structures, and Attitudes in Accommodating Guests with Disabilities, 13 J. LEGAL ASPECTS SPORT 231, 235 (2003) (describing application of ADA to new and existing facilities).
44. 16 U.S.C. §§ 1131-1136 (2006).
45. See Mitchel P. McClaran, Livestock in Wilderness: A Review and Forecast, 20 ENVTL. L. 857, 858 (1990) ("A short-lived proposal to eliminate existing grazing, made during the initial legislative process, was only an anomaly in an otherwise continuous history of grandfathering most grazing management structures and practices as acceptable nonconforming uses in wilderness.").
46. See Bert J. Harris, Jr., Private Property Rights Protection Act, FLA. STAT. ANN. § 70.001 (West 2006);
47. see also Nicole S. Sayfie & Ronald L. Weaver, 1999 Update on the Bert J. Harris Private Property Rights Protection, 73 FLA. B.J. 49 (1999) (discussing application of and alternatives to Florida statute).
48. FLA. STAT. ANN. § 70.001(2) (emphasis added). The statute defines an existing use, in relevant part, as "an actual, present use or activity on the real property ... or such reasonably foreseeable, nonspeculative land uses which are suitable for the subject real property and compatible with adjacent land uses."
49. Id. § 70.001(3)(b).
50. For example, Montana voters passed by referendum a law eliminating the use of open pit mining with a cyanide reagent, but it grandfathered existing mines that already had a permit.
51. See MONT. CODE ANN. § 82-4-390 (2007). In 1980, Arizona adopted a new law governing the use of groundwater that explicitly grandfathered existing uses of groundwater.
52. See ARIZ. REV. STAT. ANN. § 45-462 (2003) ("The right to withdraw or receive and use groundwater pursuant to this article is a grandfathered right.").
53. See Robertson, supra note 17, at 132 (discussing grandfather clauses and observing that "when a tough new law is proposed, affected industry lobbyists fight, often successfully, to exempt the existing industry from the new, presumably more stringent requirements"). But
54. cf. Elizabeth Bogley Roth, Environmental Considerations in Hydroelectric Licensing:
55. California v. FERC (Dynamo Pond), 23 ENVTL. L. 1165, 1183 (1993) ("One possible, but unarticulated, reason for the grandfather clause might be that Congress felt a hydroelectric license represents some sort of property right.").
56. This point is considered in detail in Part III.D, infra.
57. Those doctrines are the subject of Part I, infra.
58. See Vill. of Valatie v. Smith, 632 N.E.2d 1264, 1266-1267 (N.Y. 1994) ("Though the amortization period is typically discussed in terms of protecting the owners' financial interests, it serves more generally to protect 'an individual's interest in maintaining the present use' of the property."
59. (quoting Modjeska Sign Studios, Inc. v. Berle, 373 N.E.2d 255, 261 (N.Y. 1977))).
60. For a discussion of amortization, see infra Part I.B.
61. See, e.g., Mayor and Council of New Castle v. Rollins Outdoor Adver., Inc., 475 A.2d 355, 359 (Del. 1984) (holding that "reasonable, required amortization of such nonconforming uses as sign boards may be accomplished with due process of law, and that such form of regulation does not necessarily constitute a compensable taking");
62. Friends of East Fork v. Clark County, No. 33422-4-II, 2006 WL 1745032, at *1 n.l (Wash. Ct. App. June 27, 2006) ("Lawful nonconforming uses may continue but, subject to constitutional limits, the government may regulate or even terminate the use after a period of nonuse or a reasonable amortization period that allows the owner to recoup on investment.").
63. These include, notably, the vested rights doctrine and the nuisance exception, both of which are discussed at length in Part I.C-D, infra.
64. See, e.g., Sterngass v. Woodbury, 433 F. Supp. 2d 351, 355 (S.D.N.Y. 2006) ("His only right is to continue a pre-existing non-conforming use, without expansion or change.");
65. Dublin v. Finkes, 615 N.E.2d 690, 692 (Ohio Ct. App. 1992) (finding that federal and state constitutions both "recognize a right to continue a given use of real property if such use is already in existence at the time of the enactment of a land use regulation forbidding or restricting the land use in question");
66. State v. Thomasson, 378 P.2d 441, 443 (Wash. 1963) ("[W]e have recognized that property owners are not without some rights in the continuance of a legitimate business on their property despite a change in zoning.").
67. See, e.g., City of Annapolis v. Waterman, 745 A.2d 1000, 1015 (Md. 2000) ("[I]nsofar as the ordinance required the reduction, removal, or destruction of existing property at the owners' expense, it was a taking ....");
68. see also Terminals Equip. Co. v. City & County of San Francisco, 270 CaI. Rptr. 329, 335 (CaI. Ct. App. 1990) (rejecting takings claim because regulation was "only operating to restrict new uses of the subject [p]roperty, not to eliminate existing ones");
69. Taylor v. Zoning Bd. of Appeals, 783 A.2d 526, 531 (Conn. App. Ct. 2001) ("The right to continue an established nonconforming use of one's property is securely grounded, both in statutes and in previous decisions of this court and our Supreme Court.").
70. Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104, 124 (1978).
71. Id. at 136.
72. See, e.g., Wensmann Realty, Inc. v. City of Eagan, 734 N.W.2d 623, 638 (Minn. 2007) (holding that owner of option to purchase golf course had no reasonable investmentbacked expectations to support claim that city's denial of amendment to comprehensive plan to permit residential development of property constituted taking);
73. Consumers Union of U.S., Inc. v. State, 840 N.E.2d 68, 103 (N.Y. 2005) ("The word 'investment' may seem awkward in discussing the expectations of a not-for-profit entity, but I think the meaning of 'investment-backed expectations' in this context is simply [claimant's] reasonable expectations as to the future use of [its] property."). The evolution of Penn Central's investment-backed expectations prong is discussed in Daniel R. Mandelker, The Notice Rule in Investment-Backed Expectations, in TAKING SIDES ON TAKINGS ISSUES: PUBLIC AND PRIVATE PERSPECTIVES 21, 21-29 (Thomas E. Roberts ed., 2002).
74. Penn Central, 438 U.S. at 124 (describing multifactor test for takings liability).
75. For a discussion of the Due Process Clause, see infra Part U.C.
76. The other possible justifications for existing use protection considered in this Article include the endowment effect, political economy, waste prevention, owner expectations, and the stability of the status quo. See infra Part III.
77. See, e.g., David A. Dana, Natural Preservation and the Race To Develop, 143 U. PA. L. REV. 655, 677-95 (1995) (describing how natural preservation regulation encourages development);
78. Kaplow, supra note 9, at 527-31 (analyzing risks and incentives created by government regulation);
79. see also SHAVIRO, supra note 9, at 104-15 (discussing norm against nominally retroactive taxes and implications of this norm);
80. Abraham Bell & Gideon Parchomovsky, Givings, 111 YALE L.J. 547, 582-84 (2001) (illustrating effect of future regulatory takings on investment decisions);
81. Saul Levmore, Changes, Anticipations, Reparations, 99 COLUM. L. REV. 1657 (1999) (exploring incentives created by changes in law);
82. Kyle D. Logue, Legal Transitions, Rational Expectations, and Legal Process, 13 J. Co.N'iEMP. LEGAL ISSUES 211, 216-18 (2003) (arguing for transition policies for regulatory takings of private property as type of "government-provided insurance").
83. For a leading account of moral hazard, see generally Tom Baker, On the Genealogy of Moral Hazard, 75 TEX. L. REV. 237 (1996). Moral hazard in the land use context is considered in detail in Part IV.A, infra.
84. See infra Part II.
85. The list is not exhaustive. The protection of existing uses is found in other areas too. According to a leading casebook, for example, local governments may be more likely to grant variances for structures that already exist than for those yet to be built.
86. See ELLICKSON & BEEN, supra note 6, at 293 ("[PJeople who built first and sought variances later were more successful in obtaining variances than those who proceeded lawfully.").
87. STANDARD STATE ZONING ENABLING ACT (Advisory Comm. on Zoning, U.S. Dep't of Commerce 1926), available at http://myapa.planning.org/growingsmart/pdf/ SZEnabling Actl926.pdf [hereinafter SZEA];
88. see Douglas W. Kmiec, Deregulating Land Use: An Alternative Free Enterprise Development System, 130 U. PA. L. REV. 28, 58 (1981) (finding that "most zoning ordinances" either completely or partially exempt "land uses that predate the ordinance" and remarking that "there was some feeling on the part of the drafters of the SZEA that any attempt to apply zoning to existing land uses and structures without compensation would have been found unconstitutional"). The issue goes back further than that.
89. The famous case Hadacheck v. Sebastian, involving a municipality eliminating an existing use, dates back to 1915. 239 U.S. 394 (1915).
90. Stuart Meek, The Legislative Requirement that Zoning and Land Use Controls Be Consistent with an Independently Adopted Local Comprehensive Plan: A Model Statute, 3 WASH. U. J.L. & POI.'Y 295, 297 (2000).
91. The SZEA itself provides: 3. Modify this standard act as little as possible.-It was prepared with a full knowledge of the decisions of the courts in every case in which zoning acts have been under review, and has been carefully checked with reference to sub- sequent decisions. A safe course to follow is to make only those changes necessary to have the act conform to local legislative customs and modes of expression.
92. SZEA, supra note 43, at 1.
93. Carol M. Rose, Planning and Dealing: Piecemeal Land Controls as a Problem of Local Legitimacy, 71 CAL. L. REV. 837, 848 & n.29 (1983).
94. SZEA, supra note 43, at 2.
95. The zoning enabling acts of Illinois, Kansas, Massachusetts, New Hampshire, Ohio, and Wisconsin provided that zoning could not apply to existing uses.
96. See Comment, Retroactive Zoning Ordinances, 39 YALE L.J. 735, 735 & n.6 (1930) (citing statutes). But see MARC: A. WEISS, THE RISE OF THE COMMUNITY BUILDERS: THE AMERICAN REAL ESTATE INDUSTRY AND URBAN LAND PLANNING 81 (1987) (describing Los Angeles ordinance predating zoning that permitted application of land use restrictions to existing businesses).
97. See, e.g., Jones v. City of Los Angeles, 295 P. 14, 18-19, 22 (Cal. 1930) (striking down ordinance and citing, inter alia, A.C. Blumenthal & Co. v. Cryer, 236 P. 216 (CaI. Dist. Ct. App. 1925), Frank J. Durkin Lumber Co. v. Fitzsimmons, 147 A. 555, 558 (N.J. 1929),
98. Alfred Bettman, Constitutionality of Zoning, 37 HARV. L. REV. 834, 853 (1924), and
99. J.S. Young, City Planning and Restrictions on the Use of Property, 9 MINN. L. REV. 593, 628 (1925)).
100. 295 P. 14 (1930).
101. Id. at 15.
102. Id. at 17.
103. Id. at 19.
104. Id. at 22.
105. Bd. of County Comm'rs v. Petsch, 109 N.W.2d 388, 390 (Neb. 1961);
106. see also Wayne McCormack, Lochner, Liberty, Property, and Human Rights, 1 N.Y.U. J.L. & LIBERTY 432, 459-60 & n.153 (2005) (finding in Village of Euclid v. Ambler Realty Co., 272 U.S. 365 (1926), "some slight suggestion that failure to grandfather existing uses when enacting a new zoning provision might be a problem").
107. See, e.g., Bettman, supra note 49, at 853 (noting that application of zoning to existing uses would present same constitutional problem as retroactive laws more generally);
108. Young, supra note 49, at 628 ("Retroactive zoning is not to be recommended except in very unusual cases [when] public protection imperatively demands it.").
109. Comment, supra note 48, at 737;
110. see also Newman F. Baker, Zoning Legislation, 11 CORNELL L.Q. 164, 174-175 (1926) ("The Standard Act does not declare that the zoning ordinances shall not be retroactive. . . . [B]ut the practice would cause many cases of individual hardship if tried in a comprehensively zoned city which would result in raising the issue of the constitutionality of zoning in general.").
111. See Eric J. Strauss & Mary M. Giese, Elimination of Nonconformities: The Case of Voluntary Discontinuance, 25 UKB. LAW. 159, 160 (1993) (defining nonconforming use as "the lawful use of a building or premises, existing at the time of the adoption or amendment of a zoning ordinance, although such use does not conform to the provisions of the ordinance" (quoting Wis. STAT. § 62.23(7)(h) (1988))). Courts and particularly commentators distinguish between nonconforming structures and nonconforming uses, although essentially the same reasoning applies to both.
112. See id. at 161.
113. See City of Los Angeles v. A.I. Gage, 274 P.2d 34, 40 (Cal. Dist. Ct. App. 1954) ("Until recently zoning ordinances have made no provision for any systematic and comprehensive elimination of the nonconforming use. The expectation seems to have been that existing nonconforming uses would be of little consequence and that they would eventually disappear. The contrary appears to be the case." (internal citations omitted));
114. Osborne M. Reynolds, Jr., The Reasonableness of Amortization Periods for Nonconforming Uses- Balancing the Private Interest and the Public Welfare, 34 WASH. U. J. URB. & CONTEMP. L. 99, 99-100 (1988) (noting that courts also believed that nonconforming uses would die out and that courts have often assumed, where ordinance did not specify, that ordinance did not apply retroactively).
115. See Varadarajan, supra note 13, at 2556 ("Zoning regulators believed that these restrictions would cause the gradual disappearance of such nonconforming uses.");
116. see also Huntington Props., LLC v. Currituck County, 569 S.E.2d 695, 700 (N.C. Ct. App. 2002) ("Moreover, 'non-conforming uses are not favored by the law. Most zoning schemes foresee elimination of non-conforming uses either by amortization, or attrition or other means.'"
117. (quoting CG & T Corp. v. Bd. of Adjustment, 411 S.E.2d 655, 659-60 (N.C. Ct. App. 1992))). This view traditionally justifies laws limiting improvements or expansions of nonconforming uses.
118. See, e.g., County Council v. E.L. Gardner, Inc., 443 A.2d 114, 119 (Md. 1982) (recognizing that "the purpose of such restrictions is to achieve the ultimate elimination of nonconforming uses through economic attrition and physical obsolescence").
119. See Reynolds, supra note 59, at 109 ("[Nonconforming uses thrived due to the protection from new competition given them by the zoning laws.");
120. Strauss & Giese, supra note 58, at 163 ("Unfortunately, nonconforming uses were not phased out because the restriction on the development of similar uses in the area created a virtual monopoly, which allowed the nonconforming use to flourish.").
121. These include precluding any expansion of a nonconforming use and terminating a nonconforming use if the use is abandoned, changed, or destroyed.
122. See Craig A. Peterson & Claire McCarthy, Amortization of Legal Land Use Nonconformities as Regulatory Takings: An Uncertain Future, 35 WASH. U. J. URB. & CONTEMP. L. 37, 39-41 (1989) (summarizing early approaches to eliminating existing uses);
123. see also Reynolds, supra note 59, at 101-04 (describing limitations on growth and repair);
124. Strauss & Giese, supra note 58, at 163-167 (summarizing all available methods).
125. For a summary and analysis of these rules, see Eunice A. Eichelberger, Annotation, Alteration, Extension, Reconstruction, or Repair of Nonconforming Structure or Structure Devoted to Nonconforming Use as Violation of Zoning Ordinance, 63 A.L.R. 4th 275 (1988).
126. See Peterson & McCarthy, supra note 62, at 37 ("[S]tate courts have generally upheld amortization provisions since the 1950s.");
127. Reynolds, supra note 59, at 109 ("[M]ost courts held that amortization provisions are valid if they are reasonable in nature. This is currently the majority view in America."). The actual use of amortization may be quite limited, however.
128. See Margaret Collins, Methods of Determining Amortization Periods for Non-conforming Uses, 3 WASH. U. J.L. & POL'Y 215, 216 (2000) ("A survey of 489 cities showed that, although planners in 159 cities had access to amortization programs, only 27 cities had actually used them.").
129. Collins, supra note 64, at 216. Amortization is related to the depreciation of an asset for tax purposes. See id. at 223-224 (explaining various depreciation methods).
130. See, e.g., City of Oakbrook Terrace v. Suburban Bank & Trust Co., 845 N.E.2d 1000, 1011 (111. App. Ct. 2006) (holding that municipal ordinance providing amortization period for nonconforming signs violated State Eminent Domain Act, which required just compensation);
131. Hoffmann v. Kinealy, 389 S.W.2d 745, 753 (Mo. 1965) ("Of course, every comprehensive zoning ordinance limits and thereby regulates the use of property prospectively. But we cannot embrace the doctrine espoused by advocates of the amortization technique that there is no material distinction between regulating the future use of property and terminating pre-existing lawful nonconforming uses.");
132. PA Nw. Distribs., Inc. v. Zoning Hearing Bd., 584 A.2d 1372, 1376 (Pa. 1991) (holding that amortization provisions are unconstitutional because they take property without just compensation).
133. See, e.g., Bd. of Zoning Appeals v. Leisz, 702 N.E.2d 1026, 1032 (Ind. 1998) (holding that amortization provisions that require owner to discontinue nonconforming use after certain period of time are not per se unconstitutional);
134. Trip Assoes, v. Mayor and City Council of Baltimore, 898 A.2d 449, 457 (Md. 2006) ("So long as it provides for a reasonable relationship between the amortization and the nature of the nonconforming use, an ordinance prescribing . . . amortization is not unconstitutional.");
135. Red Roof Inns, Inc. v. City of Ridgeland, 797 So. 2d 898, 902 (Miss. 2001) ("The weight of authority supports the conclusion that a reasonable amortization provision would not be unconstitutional." (citation omitted)). The inquiry into duration is also a source of controversy, with some courts holding that amortization must be sufficiently long to allow the value of the buildings on the property to depreciate fully, and others holding that the adequacy of the duration must be evaluated by comparing the burden to the property owner with the burden to the public of allowing the use to continue.
136. Compare Lone v. Montgomery County, 584 A.2d 142, 153 (Md. Ct. Spec. App. 1991) ("We hold that the ten-year amortization period in the case at bar is reasonable because within that time, the multi-family housing owners could recoup any lost investment. . . ."),
137. with Modjeska Sign Studios, Inc. v. Berle, 373 N.E.2d 255, 262 (N. Y. 1977) ("If an owner can show that the loss he suffers as a result of the removal of a nonconforming use at the expiration of an amortization period is so substantial that it outweighs the public benefit gained by the legislation, then the amortization period must be held unreasonable.").
138. Cf. Reynolds, supra note 59, at 108 (describing constitutional concern about duration of amortization period).
139. See generally Collins, supra note 64.
140. See Modjeska Sign Studios, 373 N.E.2d at 262 ("In essence, however, we believe the critical question which must be asked is whether the public gain achieved by the exercise of the police power outweighs the private loss suffered by owners of nonconforming uses.");
141. Collins, supra note 64, at 217 ("The process of determining amortization periods is ... a balancing tesť weighing the private cost against the public gain.").
142. But see Peterson & McCarthy, supra note 62, at 72-79 (applying Penn Central test to as applied challenge to amortization provisions).
143. See Lingle v. Chevron, 544 U.S. 528, 540 (2005) (describing due process test). In fact, if the test for amortization of prior existing uses is not more protective than substantive due process, it threatens to become superfluous. In a dissenting opinion, a judge on the Washington Court of Appeals recognized this point: The majority's flaw is its failure to make the distinction between continuation of a nonconforming use which is exempt from police power regulation on the one hand, and imposition of the police power without exemption, subject only to the usual requirements of due process, on the other. If the latter be the rule, the nonconforming use doctrine is robbed of its reason for existence, and is no more than the usual due process test.
144. Rhod-A-Zalea & 35th, Inc. v. Snohomish County, 959 P.2d 1024, 1036 (Wash. 1988) (en banc) (Sanders, J., dissenting).
145. Richard B. Cunningham & David H. Kremer, Vested Rights, Estoppel, and the Land Development Process, 29 HASTINGS L.J. 623, 660-61 (1978) ("Early cases and treatises contain numerous admonitions based on reasons at once philosophical, practical, and legal that zoning must be prospective in nature. The assumption has not changed dramatically and continues to be of paramount importance in many modern land regulatory statutes.");
146. Peterson & McCarthy, supra note 62, at 39 (finding that "pre-existing uses and aspects of development are always to some extent 'grandfathered'");
147. Reynolds, supra note 59, at 104 ("Supporters of [amortization] have generally agreed that constitutional limitations, or considerations of fairness require that existing uses be allowed to continue until the user has had a reasonable opportunity to amortize his investment." (footnotes omitted) (internal quotation marks omitted)).
148. See Cunningham & Kremer, supra note 71, at 625-626 (summarizing vested rights doctrine).
149. For a typical hypothetical raising this problem, see CHARLES L. SIEMON ET AL., VESTED RIGHTS 2 (1982) (introducing book with stylized hypothetical of developer affected by zoning regulations passed after significant investment).
150. See generally Gregory Overstreet & Diana M. Kirchheim, The Quest for the Best Test To Vest: Washington's Vested Rights Doctrine Beats the Rest, 23 SEATILE U. L. REV. 1043, 1069-71 (2000) (endorsing Washington State's vested rights rule in part because it provides "date certain" when development rights will vest);
151. E.A. Prichard & Gregory A. Riegle, Searching for Certainty: Virginia's Evolutionary Approach to Vested Rights, 7 GEO. MASON L. REV. 983 (1999) (describing complex history of vested rights issue in Virginia).
152. See, e.g., Trans-Oceanic Oil Corp. v. City of Santa Barbara, 194 P.2d 148, 152 (CaI. Dist. Ct. App. 1948) (holding that valid permit "ripens into a vested property right which may not be taken from him against his will other than by proceedings in eminent domain with the payment of just compensation"). According to Black's Law Dictionary, a vested right is "[a] right that so completely and definitely belongs to a person that it cannot be impaired or taken away without the person's consent." BLACK'S LAW DICTIONARY 1349 (8th ed. 2004).
153. 623 A.2d 1296 (Md. 1993).
154. Id. at 1301.
155. Id. at 1297 ("The developer's vested rights argument ultimately rests on a single footing, one that was placed in the ground ... for a proposed column at a proposed outside corner of a proposed portico.").
156. Id. at 1298-1299
157. Id. at 1298-1299 n.3.
158. Id. at 1302.
159. Specifically, the court reinstated an administrative board's finding that development rights had not vested, holding: From the standpoint of a member of the general public who is either viewing the property from its boundaries or is consensually on the property, the footing is not so clearly the commencement of construction as to render the Board's finding to the contrary arbitrary, capricious or without substantial evidence on the entire record.
160. Id. at 1305.
161. See, e.g., John J. Delaney, Vesting Verities and the Development Chronology: A Gaping Disconnect?, 3 WASH. U. J.L. & POL'Y 603, 607 (2000) ("At least 30 state courts have used the issuance of a building permit as the principal benchmark for [vested rights], but virtually all of these courts also require that other actions be taken in reliance upon the permit, such as construction or expenditure of funds to implement the permit.").
162. See Mark Fenster, The Takings Clause, Version 2005: The Legal Process of Constitutional Property Rights, 9 U. PA. J. CONSI. L. 667, 674 (2007) ("[T]he Supreme Court has typically, although not universally, allowed government to regulate broadly against nuisance activities and thereby lower private property value without compensation, especially where the regulation provided reciprocal benefits to the affected property owner.");
163. Christine A. Klein, The New Nuisance: An Antidote to Wetland Loss, Sprawl, and Global Warming, 48 B.C. L. REV. 1155, 1195 (2007) ("In theory, traditional takings law has long recognized a nuisance exception under which landowners are not entitled to compensation when they are precluded from using their land to create a nuisance.").
164. 239 U.S. 394 (1915).
165. Mugler v. Kansas, 123 U.S. 623 (1887), is similar, rejecting a constitutional challenge to prohibition in Kansas on the basis of a harm-prevention rationale. More perniciously, in 1911 the California Supreme Court upheld legislation eliminating 110 Chinese laundries on finding that they caused a harm.
166. See Ex Parte Quong Wo, 118 P. 714 (Cal. 1911),
167. discussed in Young, supra note 49, at 627.
168. Comment, supra note 48, at 736-37 (
169. citing State v. McDonald, 121 So. 613 (La. 1929), and State ex rel Dema Realty Co. v. Jacoby, 123 So. 314 (La. 1929)).
170. Boyd v. City of Sierra Madre, 183 P. 230 (Cal. 1919),
171. quoted in Young, supra note 49, at 616.
172. Id. at 232 (ellipsis in original) (internal quotation marks omitted).
173. See, e.g., Goldblatt v. Hempstead, 369 U.S. 590 (1962) (upholding regulation banning excavations below water table despite effect of eliminating gravel mining operation in existence for thirty years);
174. Dep't of Agric. & Consumer Servs. v. Polk, 568 So. 2d 35 (FIa. 1990) (holding that destruction of trees exhibiting bacterial disease did not constitute taking);
175. Zeman v. City of Minneapolis, 552 N.W.2d 548, 555 (Minn. 1996) (denying compensation where landlord's rental dwelling license was revoked after tenants received multiple disorderly conduct citations because ordinance "serves a public harm prevention purpose").
176. See Young, supra note 49, at 627 ("Some cities have made their ordinances retroactive for industries [that are] more or less offensive.");
177. Comment, supra note 48, at 737 ("It is a common occurrence, where there are zoning ordinances in effect, for the exclusions to begin with nuisances and near-nuisances, over which municipalities have always had extensive control."). Moreover, Hadacheck triggered a backlash against Los Angeles's early twentieth-century land use regulations that applied to existing uses: Following Hadacheck, many land use statutes exempted existing uses.
178. WEISS, supra note 48, at 86.
179. See, e.g., Sintra, Inc. v. City of Seattle, 829 P.2d 765, 773 (Wash. 1992) ("[Regulations which enhance public interests, and go beyond preventing harmful activity, may constitute a taking. The regulatory scheme here goes beyond preventing harm.");
180. see also Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1028-30 (1992) (holding that regulations which prohibit all economically beneficial use of land are unconstitutional without compensation to burdened property owners unless that regulation is proscribing use under established property and nuisance principles);
181. Robinson v. City of Seattle, 830 P.2d 318, 328 (Wash. 1992) ("[I]f the regulation . . . goes beyond mere harm prevention to require a property owner to provide a public benefit, then that regulation is susceptible to a constitutional taking challenge.").
182. See, e.g., Glynn S. Lunney, Jr., Responsibility, Causation, and the Harm-Benefit Line in Takings Jurisprudence, 6 FORDHAM ENVTL. L. REV. 433, 475-78 (1995);
183. see also Lucas, 505 U.S. at 1024 (observing that difference between preventing harm and conferring benefit is "often in the eye of the beholder").
184. 907 P.2d 1324 (Cal. 1996).
185. Id at 1335
186. quoting Edmonds v. Los Angeles County, 255 P.2d 772, 777 (Cal. 1953)
187. Id.
188. citing Penn Cent. Transp. Co. v. New York City, 438 U.S. 104, 125 (1978)
189. Id.
190. citing Euclid v. Ambler Realty Co., 272 U.S. 365 (1926)).
191. Euclid, 272 U.S. at 397.
192. See, e.g., Calvert v. County of Yuba, 145 Cal. App. 4th 613, 623 (2006) ("In light of the state and federal constitutional takings clauses, when zoning ordinances or similar land use regulations are enacted, they customarily exempt existing land uses (or amortize them over time) to avoid questions as to the constitutionality of their application to those uses.");
193. Prince George's County v. Sunrise Dev. Ltd. 623 A.2d 1296, 1303-04 (Md. 1993) (stating, without elaboration, that vested rights doctrine has "constitutional foundation").
194. For other examples, see supra notes 1, 32, and 33.
195. Penn Coal, the case that famously identified the possibility of regulatory takings, was decided in 1922.
196. Pa. Coal Co. v. Mahon, 260 U.S. 393 (1922). The Supreme Court did not invalidate or even address the constitutionality of a land use regulation under the Takings Clause until Penn Central in 1978.
197. See 438 U.S. 104 (1978).
198. Bradley C. Karkkainen, The Police Power Revisited: Phantom Incorporation and the Roots of the Takings "Muddle," 90 MINN. L. REV. 826, 838-851 (2006).
199. See cases cited supra note 49.
200. E.g., Hoffmann v. Kinealy, 389 S.W.2d 745, 754-55 (Mo. 1965) (finding that elimina-tion of prior nonconforming use of land for open storage of lumber and other building materials and equipment would trigger takings liability under Missouri Constitution-"a taking not to be justified as an exercise of the police power which is always subject to, and may never transcend, constitutional rights and limitations");
201. PA Nw. Distribs., Inc. v. Zoning Hearing Bd., 584 A.2d 1372, 1376 (Pa. 1991) (finding amortization of lawful preexisting use violative of Pennsylvania Constitution);
202. cf. Collins, supra note 64, at 217 ("The amortization technique, as applied to non-conforming uses, has been described as more of a postponement than a solution.");
203. Reynolds, supra note 59, at 105 & n.24 (listing cases where court did not distinguish between immediate and delayed cessation).
204. Hoffmann, 389 S.W.2d at 753 (stating that "no one has, as yet, been so brash as to contend that ... a pre-existing lawful nonconforming use might be terminated immediately
205. and further arguing that "the contrary is implicit in the amortization technique itself which would validate a taking presently unconstitutional by the simple expedient of postponing such taking for a 'reasonable' time").
206. See PA Nw. Distribs., 584 A.2d at 1376 (finding amortization period violative of Pennsylvania Constitution);
207. see also 83 AM. JUR. 2D Zoning and Planning §622 & n.5 (2003) (collecting cases invalidating amortization rules under Takings Clause);
208. Reynolds, supra note 59, at 105-106 (same).
209. See, e.g., Concord Twp. v. Cornogg, 9 Pa. D. & C.2d 79, 86 (1956) (striking down zoning ordinance with amortization provision of six months on basis of constitutional ground "that no citizen can be deprived of his property without due process of law");
210. see also Ailes v. Decatur County Area Planning Comm'n, 448 N.E.2d 1057, 1060 (Ind. 1983) ("[A]n ordinance prohibiting any continuation of an existing lawful use within a zoned area regardless of the length of time given to amortize that use is unconstitutional as the taking of property without due process of law and an unreasonable exercise of the police power."),
211. overruled by Bd. of Zoning Appeals v. Leisz, 702 N.E.2d 1026 (Ind. 1998).
212. See, e.g., Sun Oil Co. of Pa. v. City of Upper Arlington, 379 N.E.2d 266, 271 (Ohio Ct. App. 1977) (determining that amortization provisions are valid only where they eliminate nuisances);
213. see also Reynolds, supra note 59, at 108 (describing Due Process protection).
214. See Modjeska Sign Studios, Inc. v. Berle, 373 N.E.2d 255, 262 (N.Y. 1977) (finding amortization reasonable only when "the public gain achieved ... outweighs the private loss suffered by owners of nonconforming uses");
215. cf. Austin v. Older, 278 N.W. 727, 730 (Mich. 1938) ("An ordinance requiring an immediate cessation of a nonconforming use may be held to be unconstitutional because it brings about a deprivation of property rights out of proportion to the public benefit obtained . ").
216. See, e.g., Outdoor Graphics, Inc. v. City of Burlington, 103 F.3d 690, 695 (8th Cir. 1996) (including benefits obtained during amortization period in regulatory takings analysis);
217. see also Varadarajan, supra note 13, at 2573-2576 (discussing amortization as substitute for just compensation).
218. See Naegele Outdoor Adver., Inc. v. City of Durham, 803 F. Supp. 1068, 1078 (M.D.N.C. 1992) (finding no taking because earnings during amortization period exceeded investment in property).
219. E.g., Temple Baptist Church, Inc. v. City of Albuquerque, 646 P.2d 565, 572 (N.M. 1982) (finding amortization period satisfied requirement of just compensation). In theory, one principal justification for amortization is that it is pegged to the useful economic life of the underlying structure. If the value of an asset has fully depreciated for tax purposes, then the courts will uphold its elimination without payment of just compensation.
220. See Collins, supra note 64, at 227.
221. E.g., Sand Key Assoes, v. Bd. of Trustees of Internal Improvement Trust Fund, 458 So. 2d 369, 370-71 (Fla. Dist. Ct. App. 1984) ("[Property rights are vested and cannot be taken away without just compensation.");
222. Bye v. Giarrusso, 321 So. 2d 58, 60 (La. Ct. App. 1975) ("'[V]ested rights' shall not be divested except for purposes of public utility and then only on payment of just compensation." (quoting Quartemont v. Aroyelles Parish Police Jury, 228 So. 2d 199, 201 (La. Ct. App. 1969)));
223. Padgett v. Mason County Zoning Comm'n, Nos. 236458, 236459, 2003 WL 22902878, at *5 (Mich. Ct. App. Dec. 9, 2003) ("[T]he prohibition of taking property without just compensation extends only to vested rights in property.").
224. Others have noted the use of the phrase "vested rights" as a substitute for real analysis. See Cunningham & Kremer, supra note 71, at 628 ("One common approach is to presume that a perfunctory reference to vested rights explains the legal theory involved and the reason for its application to the facts of the case.").
225. See, e.g., Shrader v. United States, 38 Fed. Cl. 788, 796-97 (1997) ("[Regarding a possible takings claim by Mr. Shrader, plaintiff's interests] . . . were neither vested rights, nor were they more than a 'mere expectancy, and therefore not entitled to protection as a property right.'"
226. (quoting Alberico v. United States, 783 F.2d 1024, 1027 (Fed. Cir. 1986));
227. Att'y Gen. v. Mich. Pub. Serv. Comm'n, 642 N.W.2d 691, 699 (Mich. Ct. App. 2002) ("One who asserts an uncompensated taking claim must first establish that a vested property right is affected."
228. (quoting Fun 'N Sun RV, Inc. v. Michigan, 527 N.W.2d 468, 478 (Mich. 1994)));
229. Tracy v. City of Deshler, 568 N.W.2d 903, 907 (Neb. 1997) (contrasting "vested property right" with "mere privilege");
230. see also Cunningham & Kremer, supra note 71, at 639-40 (distinguishing between privilege and right).
231. In this sense, the term "vested right" is synonymous with the term "protected property interest" and, as such, its use is entirely circular. See Cunningham & Kremer, supra note 71, at 640 ("['Vested'] is frequently applied in a circular fashion to describe any interest that is protected by the law. Hence, to assert that a person has a vested right is merely to announce the conclusion that a court will protect that interest."). Any property right, not just a vested property right, is potentially protected by the Takings Clause.
232. John J. Delaney & Emily J. Vaias, Recognizing Vested Development Rights as Protected Property in Fifth Amendment Due Process and Taking Claims, 49 WASH. U. J. URB. & CONTEMP. L. 27, 31 (1996) ("In fact, many state courts use the words 'vested right' and 'property right' interchangeably.") ;
233. cf. 26 AM. JUR. 2D Eminent Domain §150 (2004) ("For purposes of just compensation in an eminent-domain proceeding, 'property' includes every sort of interest the citizen may possess.").
234. See, e.g., Landgraf v. USA Film Prods., 511 U.S. 244, 266 (1994) ("The Fifth Amendment's Takings Clause prevents the Legislature (and other government actors) from depriving private persons of vested property rights except for a 'public use' and upon payment of 'just compensation.'");
235. see also Kenneth R. Kupchak et al., Arrow of Time: Vested Rights, Zoning Estoppel, and Development Agreements in Hawai'i, 27 U. HAW. L. REV. 17, 38 (2004)
236. (quoting County of Kauai v. Pac. Standard Life Ins. Co., 653 P.2d 766, 780 & n.129 (Haw. 1982) and describing it as "equating] establishing a vested right with establishing a regulatory taking");
237. Ann Woolhandler, Public Rights, Private Rights, and Statutory Retroactivity, 94 GEO. L.J. 1015, 1023-1024 (2006) ("The vested label ⋯ often seems conclusory.").
238. According to Cunningham and Kremer, "[t]he term instead should be recognized as the end product of a process that weighs and analyzes a private interest to determine whether it is of sufficient status to receive legal protection." Cunningham & Kremer, supra note 71, at 641.
239. For a historical explanation for the confusion about vested rights, see James L. Kainen, The Historical Framework for Reviving Constitutional Protection for Property and Contract Rights, 79 CORNELL L. REV. 87, 104-114 (1993).
240. See, e.g., Lucas v. S.C. Coastal Council, 505 U.S. 1003 (1992) (holding that regulation prohibiting building on beachfront lot, thus depriving landowner of virtually all economically viable use, constitutes compensable government taking).
241. See, e.g., Colo. Ground Water Comm'n v. North Kiowa-Bijou Groundwater Mgmt. Dist., 77 P.3d 62, 81 (Colo. 2003) (finding that plaintiff's groundwater right was vested right and "[a]s such it cannot be taken away by subsequent legislative action");
242. First of Am. Trust Co. v. Armstead, 664 N.E.2d 36, 40 (Ill. 1996) ("[T]his court has defined a vested right as an expectation that is so far perfected that it cannot be taken away by legislation.");
243. Resolution Trust Corp. v. Fleischer, 892 P.2d 497, 501 (Kan. 1995) ("We, like many courts, have used the term 'vested rights' to describe rights which cannot be taken away by retroactive legislation.");
244. Powell v. Calvert County, 795 A.2d 96, 102 (Md. 2002) ("[Vested rights] doctrine ⋯. rests upon the legal theory that when a property owner ⋯ completes substantial construction on [his] property, his right to complete and use that structure cannot be affected by any subsequent change of the applicable building or zoning regulations." (quoting Prince George's County v. Equitable Trust Co., 408 A.2d 737, 741 (Md. Ct. Spec. App. (1979))).
245. See Daniel R. Mandelker, Entitlement to Substantive Due Process: Old Versus New Property in Land Use Regulation, 3 WASH. U. J.L. & POL'Y 61, 76 n.71 (2000) (collecting cases demonstrating that municipality's revocation of building permit from property owner with vested right in permit constitutes violation of substantive due process);
246. see also, e.g., Goldrush II v. City of Marietta, 482 S.E.2d 347, 358 (Ga. 1997) ("A property interest protected by the due process clauses of the federal and state constitutions meets our definition of 'vested rights.'");
247. Hayes v. Howell, 308 S.E.2d 170, 175 (Ga. 1983) (noting that "vested rights" is generally used to imply interests which "may not be interfered with by retrospective laws," which "it is proper for the state to recognize and protect, and of which the individual cannot be deprived arbitrarily without injustice."
248. (quoting Am. States Water Serv. Co. of Cal. v. Johnson, 88 P.2d 770, 774 (Cal. Dist. Ct. App. 1939)));
249. Overstreet & Kirchheim, supra note 74, at 1071-1072 ("Some cases couch the constitutional purpose of the Washington rule in terms of how vesting provides citizens with 'fundamental fairness,' which is a due process concept.").
250. See, e.g., Waikiki Marketplace Inv. Co. v. Honolulu, 949 P.2d 183, 193-94 (Haw. Ct. App. 1997) ("[D]ue process principles protect a property owner from having his or her vested property rights interfered with and preexisting lawful uses of property are generally considered to be vested rights that zoning ordinances may not abrogate." (citation omitted));
251. Michael Weimann Assoes. Gen. P'ship v. Town of Huntersville, 555 S.E.2d 342, 345 (N.C. Ct. App. 2001) ("At common law, the vested rights doctrine evolved as a balancing mechanism" between "the State's constitutional authority over land-use" and property owners' "constitutional entitlement to due process of law");
252. Weyerhaeuser v. Pierce County, 976 P.2d 1279, 1284 (Wash. Ct. App. 1999) ("The doctrine is based upon constitutional principles of fairness and due process, acknowledging that development rights are valuable and protected property interests.").
253. Kainen, supra note 117, at 120-22 (discussing vested rights in land use). According to Kainen, whether a right has vested should not determine whether the right is subject to subsequent regulation. As he succinctly concludes, "Establishing that development expectations are 'vested rights' is neither a necessary nor a sufficient condition to their constitutional protection."
254. Id. at 122.
255. See, e.g., Lucas, 505 U.S. at 1029 ("[The limitation imposed by] regulations that prohibit all economically benficial use of land ⋯ must inhere in the title itself, in the restrictions that background principles of the State's law of property and nuisance already place upon land ownership.").
256. See, e.g., City of Minot v. Freelander, 426 N.W.2d 556 (N.D. 1988) (holding that demolition of house to stop nuisance does not violate Takings Clause);
257. Just v. Marinette County, 201 N.W.2d 761 (Wis. 1972) (upholding wetlands regulation as preventing harm).
258. But see Dep't of Agrie. & Consumer Servs. v. Polk, 568 So. 2d 35, 48 (Fla. 1990) (Barkett, J., concurring) ("Although this Court has applied the harm-benefit distinction to determine liability, I now believe that analysis is inappropriate in 'takings' cases." (citations omitted)). The relationship between the police power and the Takings Clause is enormously contested.
259. See Thomas W. Merrill, The Economics of Public Use, 72 CORNELL L. REV. 61, 70 (1986) (discussing this relationship in context of Supreme Court efforts to define Takings Clause's 'public use' requirement);
260. James E. Krier & Christopher Serkin, Public Ruses, 2004 MICH. ST. L. REV. 859, 862-63 (2004) (discussing Merrill, supra, and arguing that if public use were coterminous with police power it would not eliminate compensation inquiry).
261. This assumes that existing uses are not eliminated through permanent physical occupations, proscribed in Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 421 (1982), nor eliminated through government exactions, the permissible limits of which are defined in
262. Dolan v. City of Tigard, 512 U.S. 374 (1994), and Nollan v. Cal. Coastal Comm'n, 483 U.S. 825 (1987).
263. 505 U.S. 1003, 1015 (1992) (deeming "categorical treatment appropriate ⋯ where regulation denies all economically beneficial or productive use of land").
264. Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104 (1978).
265. Lucas, 505 U.S. at 1027.
266. See STEVEN J. EAGLE, REGULATORY TAKINGS §(3d ed. 2005) (discussing Lucas Court's emphasis on economically beneficial use of property).
267. Penn Central, 438 U.S. at 124.
268. The third factor might also be relevant to this analysis, at least as interpreted by Professor Eagle. Traditionally, the character of the regulation implicated only a distinction between a physical invasion and regulation merely affecting economic interests. Steven J. Eagle, "Character" as "Worthiness": A New Meaning for Penn Central's Third Test?, 27 ZONING & PLANNING L. REP. 1, 2 (2004). Professor Eagle notes, however, that more recently, some courts have expanded the inquiry to include the purpose and benefits of the government action, specifically looking at whether the government regulation is retroactive or targeting an individual.
269. Id. at 4-5. This reading of the third Penn Central factor is very interesting but does not represent a consensus view of the content of the test.
270. See Mark W. Cordes, Takings Jurisprudence as Three-Tiered Review, 20 J. NAT. RESOURCES & ENVTL. L. 1, 38 (2005) ("[T]he only clear case for a taking under Penn Central would be where the investment reflects actual development expenditures, such as constructing facilities or homes, rather than speculation on future uses.");
271. Michael B. Kent Jr., Construing the Canon: An Exegesis of Regulatory Takings Jurisprudence After Lingle v. Chevron, 16 N.Y.U. ENVTL. L.J. 63, 97-98 (2008) (identifying "subjective" aspects of investment-backed expectations, such as extent and characteristics of property owner's actual investment, and noting similarity to vested rights inquiry).
272. Penn Central, 438 U.S. at 115-116
273. Id. at 116-118
274. Id. at 136.
275. See id.
276. (distinguishing Goldblatt v. Hempstead, 369 U.S. 590 (1962),
277. Miller v. Schoene, 276 U.S. 272 (1928),
278. United States v. Causby, 328 U.S. 256 (1946),
279. Griggs v. Allegheny County, 369 U.S. 84 (1962),
280. and Hadacheck v. Sebastian, 239 U.S. 394 (1915)).
281. See id. The Court's presumption about existing uses, however, may not be accurate. Existing uses can be speculative uses, and despite their lack of immediate utility or function they may simply be creative methods of land speculation. Parking lots in urban centers are one such example.
282. See Jane Jacobs, Remarks, Random Comments, 28 B.C. ENVIL. AFF. L. REV. 537, 541 (2001) ("Land in potentially lucrative and productive locations that is being kept in low-value parking lots is a symptom of land speculation: land remaining almost idle in hope that its very emptiness will increase its value to some future buyer.").
283. 444 u.S. 164 (1979).
284. Penn Central, 438 U.S. at 124 (emphasis added).
285. Aetna, 444 U.S. at 175 (emphasis added). For further analysis of this transformation,
286. see Steven J. Eagle, The Regulatory Takings Notice Rule, 24 U. HAW. L. REV. 533, 560 (2002) (characterizing transformation as move from subjective to objective standard).
287. See J. David Breemer, Playing the Expectations Game: When Are Investment-Backed Land Use Expectations (Unreasonable in State Courts?, 38 URB. LAW. 81, 85 (2006) ("Together, these decisions redirected the expectations inquiry away from the impact of regulation and toward the appropriateness of the landowners' land use expectations .");
288. Mandelker, supra note 36, at 21 ("[T]he investment-backed expectations factor has become a shield for government that protects land use regulations from the Takings Clause."). The term "expectations" suffers from some of the same problems as "vested rights." "[C]ourts often use 'expectation' to refer to an interest less deserving of protection than a 'right.' By the same token, however, the Court has also used the word 'expectations' to refer to protected property interests."
289. Lynda J. Oswald, Cornering the Quark: Investment-Backed Expectations and Economically Viable Uses in Takings Analysis, 70 WASH. L. REV. 91, 108 (1995).
290. Cf. Oswald, supra note 141, at 111-112 (discussing property owner's expectations as bound up with ability to anticipate future government regulation).
291. See, e.g., Nat'l Viatical, Inc. v. Oxendine, No.1:05-CV-3059-TWT, 2006 WL 1071839, at *4 (N.D. Ga. Apr. 20, 2006) (dismissing complaints based on allegations that statute lowered prices of life insurance policies on secondary market because plaintiff failed "to demonstrate how this regulation interferes with their reasonable investment-backed expectations");
292. Peoples Super Liquor Stores, Inc. v. Jenkins, 432 F. Supp. 2d 200, 215-16 (D. Mass. 2006) (holding that prohibition against owning interest in more than three liquor stores did not interfere with franchisee's reasonable investment-backed expectations);
293. Bd. of Zoning Appeals v. Leisz, 702 N.E.2d 1026, 1030 (Ind. 1998) (noting that "the Supreme Court has 'uniformly rejected] the proposition that diminution in property value, standing alone, can establish a taking'" and opining that "[i]n particular, the forfeiture of [plaintiff's] nonconforming use caused no interference with their reasonable investment-based expectations" (internal citation omitted)).
294. E.g., 26 AM. JUR. 2D Eminent Domain §14 (2004) ("[I]nvestment- backed expectation must be reasonable.").
295. 533 U.S. 606 (2001).
296. See id. at 626 (characterizing State's position as argument that "by prospective legislation the State can shape and define property rights and reasonable investment-backed expectations, and subsequent owners cannot claim any injury from lost value" because they "purchased or took title with notice of the limitation").
297. Id. at 629-630
298. See id. at 634-36 (O'Connor, J., concurring) ("[T]he state of regulatory affairs at the time of acquisition is not the only factor that may determine the extent of investmentbacked expectations . Courts properly consider the effect of existing regulations under the rubric of investment-backed expectations in determining whether a compensable taking has occurred. As before, the salience of these facts cannot be reduced to any 'set formula.'").
299. See id. at 637 (Scalia, J., concurring) ("[T]he fact that a restriction existed at the time the purchaser took title .. . should have no bearing upon the determination of whether the restriction is so substantial as to constitute a taking.").
300. See id. at 641 (Stevens, J., dissenting in part) ("If the regulations imposed a compensable injury on anyone, it was on the owner of the property at the moment the regulations were adopted.").
301. See, e.g., Richard A. Epstein, Lucas v. South Carolina Coastal Council/ A Tangled Web of Expectations, 45 STAN. L. REV. 1369, 1370 (1993) (suggesting "investment-backed expectations" may be term excluding property received by gift);
302. Oswald, supra note 141, at 116-117
303. (discussing Hodel v. Irving, 481 U.S. 704 (1987)).
304. See Mandelker, supra note 36, at 25.
305. See Epstein, supra note 151, at 1370 ("All in all, we should be deeply suspicious of the phrase 'investment-backed expectations' because it is not possible to identify even the paradigmatic case of its use.").
306. See, e.g., Oswald, supra note 141, at 101-06 (examining history of investment-backed expectations). It appears that Professor Michelman was the first person to use the phrase, "investment-backed expectations" in the takings context.
307. Frank I. Michelman, Property, Utility, and Fairness: Comments on the Ethical Foundations of "Just Compensation" Law, 80 HARV. L. REV. 1165, 1213 (1967). He discussed the concept in the context of examining diminution in value.
308. Id. at 1229-1234
309. See Breemer, supra note 141, at 82 ("Trying to determine when land use expectations are reasonable in state courts is an experience akin to a dog chasing its own tail.");
310. see also, e.g., Dana, supra note 40, at 661 ("[C]ourts provide very little explanation for their holdings as to when it is and is not reasonable for a property owner to expect that she will be subject to uncompensated regulation in the future.").
311. See Epstein, supra note 151, at 1370 ("All in all, we should be deeply suspicious of the phrase 'investment-backed expectations' because it is not possible to identify even the paradigmatic case of its use.");
312. Oswald, supra note 141, at 107 ("[T]he meaning of the phrase remains uncertain, rendering its effectiveness as a legal doctrine questionable at best.");
313. see also Breemer, supra note 141, at 81-82 & n.6 (citing sources and describing investment-backed expectations as "certainly the least understood" Penn Central factor).
314. See Oswald, supra note 141, at 130 ("Over the past sixteen years, the Supreme Court has increasingly committed itself to a regulatory takings analysis that focuses extensively, if not exclusively, upon the economic effects of the regulation upon the property owner.");
315. Joseph L. Sax, Takings, Private Property, and Public Rights, 81 YALE L.J. 149, 151 (1971) ("[T]he criterion for recognizing a particular economic injury which follows from government action as a taking is the extent of economic loss.").
316. But see Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 935 (Tex. 1998) (identifying focus of Penn Central as "the extent to which the regulation has interfered with distinct investment-backed expectations");
317. Eagle, supra note 140, at 561 ("[A]t least in the minds of some courts, 'investmentbacked expectations' would crowd out the other prongs of the three-factor test.").
318. What counts as too much has been a source of constant controversy, but the percentage diminution required appears to be quite high. Cordes, supra note 132, at 39 (surveying cases and finding that "diminution in value must substantially exceed 50%, and should be closer to 90%, before any serious consideration is given of a taking").
319. Before the regulation, the first lot might have been worth $1,000,000 and the second lot worth $250,000 (reflecting the absence of a building). After the regulation, they are both worth the same amount, say $ 50,000 (excepting the transition costs of removing the existing building, which this stylized hypothetical excludes, but which are considered in detail below). The diminution in value of the first lot is 95% and of the second is only 80%. Perversely, however, a regulation that has a fixed economic impact is more likely to be a taking when applied to undeveloped property because the denominator will be smaller; a regulation imposing a $50,000 loss may be a taking of property worth $60,000, but is unlikely to be a taking of property worth $200,000.
320. See Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104, 130-131 (1978) ("In deciding whether a particular governmental action has effected a taking, this Court focuses [on] the parcel as a whole .").
321. For a discussion of conceptual severance, see Margaret Jane Radin, The Liberal Conception of Property: Cross Currents in the Jurisprudence of Takings, 88 COLUM. L. REV. 1667, 1676 (1988) ("This strategy I shall call 'conceptual severance.' It consists of delineating a property interest consisting of just what the government action has removed from the owner, and then asserting that that particular whole thing has been permanently taken.");
322. see also Vicki Been & Joel C. Beauvais, The Global Fifth Amendment? NAFTA's Investment Protections and the Misguided Quest for an International "Regulatory Takings" Doctrine, 78 N.Y.U. L. REV. 30, 64 (2003) (discussing Radin, supra).
323. Michelman, supra note 154, at 1233. Michelman's article, usually cited for his proposed utilitarian formulation of takings liability, remains the single most influential article on the Takings Clause. A number of people have observed that it provided the blueprint for Penn Central.
324. See Oswald, supra note 141, at 104 ("Michelman's analysis clearly influenced Justice Brennan as he wrote the majority opinion in Penn Central.");
325. Radin, supra note 161, at 1684 (describing Penn Central test as "created under the salutary influence of Frank Michelman's famous article");
326. Gregory M. Stein, The Effect of Palazzolo v. Rhode Island on the Role of Reasonable Investment-Backed Expectations, in TAKING SIDES ON TAKINGS ISSUES: PUBLIC AND PRIVATE PERSPECTIVES, supra note 36, at 41-42 ("The Court relied heavily on Professor Frank Michelman's influential 1967 essay ⋯").
327. See Giovanella v. Conservation Comm'n of Ashland, 857 N.E.2d 451, 456 (Mass. 2006) ("When a court considers a large piece of land of which only a small portion has lost value due to regulation, it is less likely to conclude that a taking has occurred. If a court considers a smaller parcel of land, most of which has been affected by a regulation, then the economic impact is more likely to appear large enough to constitute a taking.");
328. see also City of Coeur d'Alene v. Simpson, 136 P.3d 310, 319 (Idaho 2006) ("Courts typically reject the so-called 'conceptual severance' theory-the notion that whole units of property may be divided for the purpose of a takings claim.");
329. Smith v. Town of Mendon, 822 N.E.2d 1214, 1220 n.12 (N.Y. 2004) (evaluating "effect of the government action on the value of the property as a whole, rather than ... its effect on discrete segments of the property");
330. Machipongo Land & Coal Co. v. Commonwealth, 799 A.2d 751, 768 (Pa. 2002) (applying Penn Central's mandate to consider the "parcel as a whole").
331. See Penn Central, 438 U.S. at 131 (focusing on "parcel as a whole");
332. see also TahoeSierra Pres. Council, Inc. v. Tahoe Reg'l Planning Agency, 535 U.S. 302, 331 (2002) (rejecting temporal division of property);
333. Andrus v. Allard, 444 U.S. 51, 65-66 (1979) ("At least where an owner possesses a full 'bundle' of property rights, the destruction of one 'strand' of the bundle is not a taking, because the aggregate must be viewed in its entirety.").
334. See Matthew P. Harrington, "Public Use" and the Original Understanding of the SoCalled "Takings" Clause,53 HASTINGS L.J.1245, 1247 (2002) ("[T]he idea that courts had the power to supervise legislative expropriations would have been unfamiliar to the members of the Congress who drafted the so-called Takings Clause.")
335. see also Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1057 n.23 (1992) ("James Madison, author of the Takings Clause, apparently intended it to apply only to direct, physical takings of property by the Federal Government"
336. (citing William Michael Treanor, Note, The Origins and Original Significance of the Just Compensation Clause of the Fifth Amendment, 94 YALE L.J. 694, 711 (1985))).
337. But see Nicole Stelle Garnett, "No Taking Without a Touching?" Questions from an Armchair Originalist, 45 SAN DIEGO L. REV. 761, 762-764 (2008) (questioning historical accounts of Takings Clause).
338. See Stewart E. Sterk, The Federalist Dimension of Regulatory Takings Jurisprudence, 114 YALE L.J. 203, 267 n.292 (2004) ("In addition to the Takings Clause, the [New York Court of Appeals] has also invoked substantive due process to protect landowners from actions by local zoning authorities.");
339. Mark Tunick, Constitutional Protections of Private Property: Decoupling the Takings and Due Process Clauses, 3 U. PA. J. CONSI. L. 885, 899 (2001) ("The Due Process Clauses provide protections against unfair laws, both those that take property as well as those that merely regulate it. The Due Process Clause, not the Takings Clause, protects citizens from state laws that are overbroad, arbitrary, insufficiently justified, or unfair.");
340. Robert Ashbrook, Comment, Land Development, the Graham Doctrine, and the Extinction of Economic Substantive Due Process, 150 U. PA. L. REV. 1255, 1257 (2002) (noting in land use context alone "federal courts have allowed economic substantive due process ... to escape extinction (and in some instances even to flourish)");
341. see also Jane B. Baron, Winding Toward the Heart of the Takings Muddle: Kelo, Lingle, and Public Discourse About Private Property, 34 FORDHAM URB. L.J. 613, 640 (2007) (describing posl-Lingle "sequencing between the analyses under the two clauses, with substantive due process questions to be raised first and, assuming the statute in question withstands due process scrutiny (a safe assumption for economic regulation), takings scrutiny to follow").
342. See generally Mandelker, supra note 120 (arguing for more frequent use of substantive due process analysis because of inadequacy of takings law).
343. 198 U.S. 45 (1905).
344. See Richard Squire, Antitrust and the Supremacy Clause, 59 STAN. L. REV. 77, 104 (2006) ("Judges across the ideological spectrum now try to outdo each other in denouncing Lochner, marking a broad consensus that principles whereby courts use federal law to cut down state economic regulation should not originate in the judicial branch.");
345. Tunick, supra note 166, at 899 n.59 ("Since the demise of Lochner, the Court has been reluctant to strike down economic legislation on due process grounds.").
346. See, e.g., Ferguson v. Skrupa, 372 U.S. 726, 729-731 (1963) ("It is now settled that States have power to legislate against what are found to be injurious practices in their internal commercial and business affairs, so long as their laws do not run afoul of some specific federal constitutional prohibition, or of some valid federal law." (internal quotation marks and citations omitted)).
347. See, e.g., Marks v. City of Chesapeake, 883 F.2d 308, 313 (4th Cir. 1989) (holding that withholding permit for palm reading business is arbitrary and capricious and violates due process);
348. Sullivan v. Town of Salem, 805 F.2d 81, 85 (2d Cir. 1986) (holding that prohibiting occupancy of new home that meets building code violates due process);
349. see also Michael J. Phillips, The Slow Return of Economic Substantive Due Process, 49 SYRACUSE L. REV. 917, 927-36 (1999) (citing land use decisions);
350. Anthony B. Sanders, The New "Judicial Federalism " Before Its Time: A Comprehensive Review of Economic Substantive Due Process Under State Constitutional Law Since 1940 and the Reasons for Its Recent Decline, 55 AM. U. L. REV. 457, 469 (2005) ("Instead of a deferential rational basis test, where the regulation at issue is heavily presumed to be constitutional, courts often apply a mere 'clear and convincing evidence' presumption when deciding land use zoning cases.").
351. Lingle v. Chevron, 544 U.S. 528, 542 (2005) ("[A] regulation that fails to serve any legitimate governmental objective may be so arbitrary or irrational that it runs afoul of the Due Process Clause."). Other courts have made similar statements.
352. See, e.g., DeBlasio v. Zoning Bd. of Adjustment, 53 F.3d 592, 593 (3d Cir. 1995) ("[I]n the context of land use regulation, a property owner states a substantive due process claim where he or she alleges that the decision limiting the intended land use was arbitrarily or irrationally reached."). For further discussion of Lingle,
353. see infra notes 192-194 and accompanying text.
354. See, e.g., Lingle, 544 U.S. at 541 (describing means-ends test).
355. See, e.g., Ashbrook, supra note 166, at 1260-1261 ("The precise legal standard varies by circuit. The District of Columbia Circuit merely requires a showing of 'grave unfairness.' More commonly, however, courts require some variation on arbitrariness and/or capriciousness." (footnotes omitted)).
356. See, e.g., Amnon Lehavi, Intergovernmental Liability Rules, 92 VA. L. REV. 929, 937 (2006) ("Courts deem [land use regulations] to be presumptively valid, and place the burden of proof on those making sustantive due process claims to show that the regulation is arbitrary and unreasonable.").
357. See, e.g., Eger v. Levine, 545 N.Y.S.2d 618, 619 (App. Div. 1989) (finding denial of use variance to be irrational where use predated effective date of zoning ordinance). For an example of a court rejecting a due process challenge to a regulation eliminating an existing use,
358. see Hartland Sportsman's Club, Inc. v. Town of Delafield, 35 F.3d 1198 (7th Cir. 1994).
359. See supra note 8 and accompanying text (noting that original justification of zoning was to separate incompatible uses of property).
360. For a fascinating and thoroughgoing analysis of this history, see Karkkainen, supra note 100, at 838-851
361. See, e.g., Lincoln Trust Co. v. Williams Bldg. Corp., 128 N.E. 209, 210 (N.Y. 1920) ("In a great metropolis like New York, in which the public health, welfare, convenience, and common good are to be considered, I am of the opinion that the resolution was not an incumbrance, since, it was a proper exercise of the police power. The exercise of such power, within constitutional limitations, depends largely upon the discretion and good judgment of the municipal authorities ⋯ .");
362. see also Merrill, supra note 124, at 69-70 (describing relationship between police power and public use);
363. cf. Bettman, supra note 49, at 835 ("The constitutional limitations upon eminent domain, such as the requirement that compensation be paid, have no relevance where an ordinance is an exercise of the police power.").
364. See Karkkainen, supra note 100, at 841 ("Thus a legitimate exercise of the police power could never give rise to a compensable taking ." (footnote omitted)).
365. See, e.g., In re Opinion of the Justices, 127 N.E. 525, 527 (Mass. 1920) ("An ordinance or by-law which segregates manufacturing and commercial buildings on the one side, from homes and residences on the other, is justified by the broad conceptions of the police power .").
366. See, e.g., City of Tucson v. Ariz. Mortuary, 272 P. 923, 927 (Ariz. 1928) (referring to Euclid and noting that ordinance is unconstitutional if it is "clearly arbitrary and unreasonable, and has not any substantial relation to the public health, safety, morals, or general welfare");
367. Longley v. Rumsey, 224 N.Y.S. 165, 167 (Sup. Ct. 1927) (holding zoning ordinance invalid because of its failure to act in accordance with comprehensive plan and "because of the arbitrary method by which the character of the so-called districts is determined");
368. Luse v. City of Dallas, 131 S.W.2d 1079, 1084 (Tex. Civ. App. 1939) (holding that, to be unconstitutional and therefore void, "[an] ordinance . must itself be clearly arbitrary, unreasonable and without any substantial relation to the public health, safety, morals, or general welfare");
369. Geisenfeld v. Vill. of Shorewood, 287 N.W. 683, 686 (Wis. 1939) (declaring ordinance "unconstitutional and void because 'clearly arbitrary and unreasonable, having no substantial relation to the public health, safety, morals, or general welfare'" (quoting Vill. of Euclid v. Ambler Realty Co., 272 U.S. 365, 395 (1926))).
370. See Bettman, supra note 49, at 836 ("[I]n actual practice in constitutional cases, 'reasonable' often signifies little more than that ... the balance of considerations of private and public interests has been fairly maintained.").
371. See Karkkainen, supra note 100, at 841-842 (defining content of due process review).
372. See supra note 99 and accompanying text.
373. Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104 (1978).
374. The three-part ad hoc balancing test focuses on the diminution in value, the extent of interference with investment-backed expectations, and the character of the regulation. Id. at 124.
375. 447 U.S. 255 (1980), overruled in part by Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 540 (2005).
376. Id. at 260 (citation omitted).
377. See Karkkainen, supra note 100, at 883 (arguing that "[c]onflation of substantive due process and Takings Clause doctrine muddled the 'takings' issue in multiple ways" and pointing to Agins as point of departure from proper takings jurisprudence);
378. see also David L. Callies & Christopher T. Goodin, The Status of Nollan v. California Coastal Commission and Dolan v. City of Tigard After Lingle v. Chevron, 40 J. MARSHALL L. REV. 539, 557 (2007) ("[T]he Agins test is essentially a substantive due process inquiry⋯ .");
379. Robert G. Dreher, Lingle's Legacy: Untangling Substantive Due Process from Takings Doctrine, 30 HARV. ENVTL. L. REV. 371, 372 (2006) (noting Supreme Court's reliance, in Agins, on "seminal due process cases");
380. Fenster, supra note 84, at 735 ("[T]he Agins 'substantial advancement' test ⋯. mistook a substantive due process test for a takings test .").
381. See Nestor M. Davidson, The Problem of Equality in Takings, 102 Nw. U. L. REV. 1, 16 (2008) (suggesting that Agins "substantially advances" language "formed the rhetorical basis for the suggestion in Nollan that Takings Clause-based review of the impact of regulation on property rights should be undertaken through some form of heightened scrutiny");
382. Karkkainen, supra note 100, at 828 (noting "errant language in Agins that imported Lochner-slyle heightened substantive due process review into modern takings law").
383. For a very good history of the relationship between takings law and substantive due process, see Dreher, supra note 189, at 373-387
384. 544 U.S. 528 (2005). For more in-depth discussion of the line of cases resulting in Lingle,
385. see generally Fenster, supra note 84. For a discussion of the doctrinal confusion that existed prior to Lingle,
386. see generally, for example, Thomas E. Roberts et al., LandUse Litigation: Doctrinal Confusion Under the Fifth and Fourteenth Amendments, 28 URB. LAW. 765 (1996).
387. See Lingle, 544 U.S. at 542 ("[A] regulation that fails to serve any legitimate governmental objective may be so arbitrary or irrational that it runs afoul of the Due Process Clause.").
388. See id. at 542 ("In stark contrast to the three regulatory takings tests discussed above, the 'substantially advances' inquiry reveals nothing about the magnitude or character of the burden a particular regulation imposes upon private property rights.").
389. See, e.g., LON L. FULLER, THE MORALITY OF LAW 53 (rev. ed. 1969) ("[A] retroactive law is truly a monstrosity.");
390. DANIEL E. TROY, RETROACTIVE LEGISLATION 17-19 (1998) (arguing that retroactive legislation fails to give notice and therefore undermines free will and reliance necessary for social order);
391. Julian N. Eule, Temporal Limits on the Legislative Mandate: Entrenchment and Retroactivity, 1987 AM. B. FOUND. RES. J. 379, 427 (referring to common assumption that "retroactive exercises of legislative power are incompatible with any fair and just system of government").
392. See FULLER, supra note 195, at 60 ("If every time a man relied on existing law in arranging his affairs, he were made secure against any change in legal rules, the whole body of our law would be ossified forever.").
393. TROY, supra note 195, at 3 (internal quotation marks omitted).
394. There are a variety of constitutional sources of antiretroactivity rules that apply to private law. The Contracts Clause prevents state government from interfering with existing contract rights (although often anemically). U.S. CONSI. art. I, §10, cl. 1 ("No State shall.⋯ pass any ⋯ Law impairing the Obligation of Contracts ."). Substantive due process analysis replaced an early natural rights treatment of retroactive legislation.
395. TROY, supra note 195, at 77 (noting that by 1880s, Supreme Court had begun using substantive due process "to implement many of its conceptions of natural justice"). Courts therefore reasoned that retroactive regulations, often described as those affecting vested rights, were unconstitutional under the Due Process Clause.
396. See Comment, The Variable Quality of a Vested Right, 34 YALE L.J. 303, 304 (1925) (summarizing due process cases and citing, inter alia,
397. Huffman v. Alderson's Adm'r, 9 W. Va. 616 (1876)). In 1976, however, the Supreme Court refused to strike down an expressly retroactive law on due process grounds.
398. See Usery v. Turner Elkhorn Mining Co., 428 U.S. 1 (1976),
399. cited in TROY, supra note 195, at 38, 107 n.84. Nevertheless, substantive due process analysis still appears periodically in retroactivity analysis.
400. For example, in Eastern Enters, v. Apfel, 524 U.S. 498 (1998), a plurality of the Supreme Court struck down a federal statute requiring coal com panies to fund retirement benefits for former coal miners. The Court could not agree on the constitutional analysis to apply. Four Justices believed the statute violated the Takings Clause. Id. at 522-38 (plurality opinion) (O'Connor, J., joined by Rehnquist, C.J., and Scalia and Thomas, JJ.). Justice Thomas suggested it also might violate the Ex Post Facto Clause. Id. at 538-39 (Thomas, J., concurring). Justice Kennedy believed the statute was unconstitutional but applied a due process analysis to reach his result. Id. at 547-50 (Kennedy, J., concurring in judgment and dissenting in part). The remaining four Justices voted to uphold the statute after applying the Due Process Clause. Id. at 556-58, 567-68 (Breyer, J., dissenting). Given the Supreme Court's fractured reasoning regarding retroactivity, it is perhaps not surprising that courts disagree about the source of the constitutional protection for existing uses. For a review of different constitutional prohibitions against retroactivity and their limitations, see Eule, supra note 195, at 427-34.
401. For example, if the government were to remove the home mortgage tax deduction it would have an enormous impact on the value of people's past investment decisions, even if the deduction were only repealed prospectively. Jill E. Fisch, Retroactivity and Legal Change: An Equilibrium Approach, 110 HARV. L. REV. 1055, 1067 (1997); see also Eule, supra note 195, at 435-36 (considering same example)
402. Tax law provides a frequent source of discussion of retroactivity. See generally Kyle D. Logue, Tax Transitions, Opportunistic Retroactivity, and the Benefits of Government Precommitment, 94 MICH. L. REV. 1129 (1996) (arguing for transition relief in certain tax situations).
403. Fisch, supra note 199, at 1067-69; see SHAVIRO, supra note 9, at 26 (identifying retroactive effect of "nominally prospective" changes); TROY, supra note 195, at 2 ("[A]lmost all legislation may be characterized as 'retroactive' [because] the operation of almost all legislation depends on antecedent facts."); see also FILLER, supra note 195, at 59-61 (discussing "the most difficult problem of all, that of knowing when an enactment should properly be regarded as retrospective"). This identification problem is particularly serious for land use regulations, because the land itself always preexists the regulation. See Holly Doremus, Takings and Transitions, 19 J. LAND USE & ENVTL. L. 1, 11-12 (2003) (arguing that "new property rules can never be wholly forward-looking," because while "they can be applied only to new activities, they can never be applied to new land").
404. See Fisch, supra note 199, at 1070 (explaining that describing "retroactivity as a spectrum or range of temporal options rather than as a binary construct provides a better description of the nature and consequences of legal change"); see also Logue, supra note 199, at 1133 ("Transition losses can occur whether the new tax law or new interpretation applies nominally retroactively or nominally prospectively").
405. See, e.g., Stephen R. Munzer, Retroactive Law, 6 J. LEGAL STUD. 373, 383 (1977) (explaining that retroactivity may be either strong or weak and that "the difference lies in how the impact of a retroactive law on earlier acts in the period prior to its creation is understood");
406. cf. TROY, supra note 195, at 8 (describing Justice Scalia as distinguishing between primary and secondary retroactivity, which "roughly correlate" with strong and weak retroactivity);
407. W. David Slawson, Constitutional and Legislative Considerations in Retroactive Lawmaking, 48 CAL. L. REV. 216, 216 (1960) ("[Retroactive] is used both (1) to describe the particular basis of selection for the direct imposition of legal effects and (2) as a description of particular kinds of effects which may occur when a new law is imposed on society.").
408. Munzer, supra note 202, at 383.
409. See Fisch, supra note 199, at 1084 ("It is typically thought that prospective laws are more fair and that retroactive laws are more efficient.");
410. David Frisch, Rational Retroactivity in a Commercial Context, 58 ALA. L. REV. 765, 794 (2007) ("Traditional normative criticism of retroactivity has rested on two related assertions: Fairness mandates giving people the opportunity to know in advance what laws will govern their affairs and prohibits changing the rules in midstream, and retroactive laws defeat the legitimate expectations of the persons affected." (internal footnotes omitted));
411. see also Landgraf v. USA Film Prods., 511 U.S. 244, 265 (1994) ("[T]he presumption against retroactive legislation ... embodies a legal doctrine centuries older than our Republic. Elementary considerations of fairness dictate that individuals should have an opportunity to know what the law is and to conform their conduct accordingly; settled expectations should not be lightly disrupted." (internal footnote omitted)).
412. See TROY, supra note 195, at 18-19 (arguing that notice is fundamental to fairness, rule of law, and moral choice);
413. see also Fisch, supra note 199, at 1085 ("Notice enables people to predict the consequences of their transactions and increases the influence of legal rules upon primary conduct.").
414. See Fisch, supra note 199, at 1088 ("The view that the new rule improves the operative legal principles supports the application of that rule to as broad a class of cases as possible.").
415. Id. at 1089 ("The objectives of a new legal rule may also be undercut if people are able to avoid its application by rushing to complete transactions prior to enactment."). This is a familiar application of moral hazard and is considered in more detail in Part IV. A, infra. See Baker, supra note 40, at 239 ('"[M]oral hazard' refers to the tendency for insurance against loss to reduce incentives to prevent or minimize the cost of loss.");
416. Albert C. Lin, Size Matters: Regulating Nanotechnology, 31 HARV. ENVTL. L. REV. 349, 401 (2007) (defining moral hazard as "the temptation to behave differently because of the existence of insurance or other incentives").
417. See infra Part IV.A; see also Kaplow, supra note 9, at 529 ("[T]he encouragement resulting from the assurance that compensation or other protection will be provided in the event of change results in overinvestment.").
418. See Doremus, supra note 200, at 14 ("Changing the rules after people have adjusted their conduct on the basis of those rules often seems unfair, because we generally think that people are entitled to, and indeed should, govern their behavior according to the existing rules."); Frisch, supra note 204, at 765-66 (describing intuition that "there is something fundamentally unfair about government altering the rules that govern past conduct");
419. Matthew P. Harrington, Foreword: The Dual Dichotomy of Retroactive Lawmaking, 3 ROGER WILLIAMS U. L. REV. 19, 19 (1997) ("On the face of it, there is something unsettling about the possibility that lawmakers might change the rules whilst the game is in progress."). In a leading article, Joseph Singer offered an entire reliance-based theory of property law.
420. See generally Joseph William Singer, The Reliance Interest in Property, 40 STAN. L. REV. 611 (1988). It may be important to ask whether theories of reliance actually have any place in property law, but that question is far beyond the scope of this project.
421. See, e.g., Kupchak et al., supra note 115, at 24 ("[T]he policy underlying zoning estoppel is two-fold: hold the government to its commitments, and treat property owners who rely fairly."). Zoning estoppel can be applied to prevent the government from changing zoning regulations on which a property owner has reasonably relied, but only if the government has given assurances that the zoning will not change. Id.
422. See Michelman, supra note 154, at 1233 ("[A] ban on potential uses not yet established may destroy market value as effectively as does a ban on activity already in progress.")
423. This kind of example is common in the case law. See, e.g., Savvidis v. City of Norwalk, No. FSTCV054004143S, 2007 WL 2938522, at *4 (Conn. Super. Ct. Aug. 8, 2007) (granting writ of mandamus on behalf of property owners that spent significant sums on development in reliance on approval of zoning application).
424. Cf. Peter Huber, The Old-New Division in Risk Regulation, 69 VA. L. REV. 1025, 1065 (1983) (contrasting consequences of regulation of new products versus regulation of existing products).
425. See SHAVIRO, supra note 9, at 23 ("People tend to over-weight out-of-pocket costs relative to pure opportunity costs such as foregone gains. . . . Accordingly, out-of-pocket losses and those that result in a perceived transaction loss may tend to be more salient than others . . . .").
426. See Russell Korobkin, The Endowment Effect and Legal Analysis, 97 Nw. U. L. REV. 1227, 1228 (2003) ("[P]eople tend to value goods more when they own them than when they do not.").
427. See generally SHAVIRO, supra note 9, at 23 (discussing endowment effects);
428. Daniel Kahneman et al., Experimental Tests of the Endowment Effect and the Coase Theorem, 98 J. POL. ECON. 1325 (1990) (demonstrating experimentally that endowment effect persists even in market setting with opportunities to learn).
429. See Michael Heller & Rick Hills, Land Assembly Districts, 121 HARV. L. REV. 1465, 1479-80 (2008) (discussing endowment effects and noting that "[h]umans have a wellverified psychological inclination to value their current endowments more than identical items that they currently lack but could purchase");
430. Kahneman et al., supra note 215 (making same point).
431. See Jeffrey J. Rachlinski & Forest Jourden, Remedies and the Psychology of Ownership, 51 VAND. L. REV. 1541, 1558 (1998) ("[S]ubjects actually have to feel and touch [the object] to make it theirs-the right to [an object is] not endowed.");
432. see also id. at 1559 (describing further psychological study);
433. Doremus, supra note 200, at 23 ("The [endowment] effect does not seem to attach to expectations. The right to collect a commodity does not give as strong an effect as even brief possession of the commodity itself. . . .").
434. See Michael A. Strahilevitz & George Lowenstein, The Effect of Ownership History on the Valuation of Objects, 25 J. OF CONSUMER RESEARCH 276 (1998) (publishing findings from studies showing endowment effect increasing over time). Responding to this same phenomenon, some have proposed increasing compensation for condemnation the longer property has been owned by the condemnee.
435. See, e.g., Mo. ANN. STAT. §523.039(3) (West. 2009) (offering higher compensation for properties held by same family for fifty or more years), cited in Daphna Lewinsohn-Zamir, Identifying Intense Preferences, 94 CORNELL. L. REV. 1391, 1409 n.88;
436. John Fee, Eminent Domain and the Sanctity of the Home, 81 NOTRE DAME L. REV. 783, 814-17 (2006) ("For example, eminent domain law might require government to pay homeowners market value plus X percent of the home's market value, where X depends on how long the owner has lived in the home."). It may, however, be difficult to move from controlled psychological experiments involving tangible and low-value property to real property.
437. See Jennifer Arlen, Comment, The Future of Behavioral Economic Analysis of Law, 51 VAND. L. REV. 1765, 1768-71 (1998) ("The classic experiment illustrating the endowment effect involved Cornell coffee mugs.").
438. O.W. Holmes, The Path of the Law, 10 HARV. L. REV. 457, 477 (1897).
439. In support of this intuition, Daniel Troy cites a text on child development that stresses the importance of knowing applicable rules ahead of time. See TROY, supra note 195, at 1 (citing H. CLAY TRUMBULL, HINIS ON CHILD TRAINING 216 (1890)).
440. Henry J. Friendly, "Some Kind of Hearing," 123 U. PA. L. REV. 1267, 1296 (1975), cited in Greenholtz v. Inmates of the Neb. Penal & Corr. Complex, 442 U.S. 1, 10 (1979). Presaging the economic discussion that follows, Friendly continued, "Revocation of a license is far more serious than denial of an application for one; in the former instance capital has been expended, investor expectations have been aroused, and people have been employed."
441. Id.
442. For further discussion, see Susan H. Herman, The New Liberty: The Procedural Due Process Rights of Prisoners and Others Under the Burger Court, 59 N. Y.U. L. REV. 482, 514 (1984).
443. Christopher Serkin, The Meaning of Value: Assessing Just Compensation for Regulatory Takings, 99 Nw. U. L. REV. 677, 700-01 (2005).
444. See Id., at 701 n.110 (citing cases);
445. see also Lee Anne Fennell, Taking Eminent Domain Apart, 2004 MICH. ST. L. REV. 957, 993-95 ("It is difficult to know how much value someone places on a property, and resort to proxies such as percentage bonuses will generate inaccuracies in both directions.").
446. For a proposal for self-assessment of property values tied to property taxes and sales prices, see Abraham Bell & Gideon Parchomovsky, Takings Reassessed, 87 VA. L. REV. 277, 300-04 (2001). Richard Epstein has suggested applying some extra percentage increase to compensation at least partly to account for subjective value.
447. Richard A. Epstein, A Clear View of The Cathedral/ The Dominance of Property Rules, 106 YALE L.J. 2091, 2114-15 (1997).
448. For a discussion of the possibility of self-assessment in other contexts, see generally Saul Levmore, Self-Assessed Valuation Systems for Tort and Other Law, 68 VA. L. REV. 771 (1982).
449. See supra Part I (describing property and land use doctrines protecting existing uses).
450. See infra Part III.B.4 (discussing personhood).
451. See Dana, supra note 40, at 685 ("The costs of undoing an existing development, moreover, are typically much greater than the costs of preventing development.");
452. cf. Lior Jacob Strahilevitz, The Right To Destroy, 114 YALE L.J. 781, 796 (2005) ("Concern about wasting valuable resources is, by far, the most commonly voiced justification for restricting an owner's ability to destroy her property.").
453. See supra note 214 (discussing such overweighting). This also resembles at least some characterizations of the sunk cost fallacy in that it unduly privileges money that has already been spent.
454. See Susan Block-Lieb & Edward J. Janger, The Myth of the Rational Borrower: Rationality, Behavioralism, and the Misguided "Reform" of Bankruptcy Law, 84 TEX. L. REV. 1481, 1534 (2006) ("Cognitive research also finds that individuals are reluctant to walk away from sunk costs, irrationally ignoring the marginal costs and benefits of additional action.");
455. Mark Seidenfeld, Cognitive Loafing, Social Conformity, and Judicial Review of Agency Rulemaking, 87 CORNELL L. REV. 486, 500 (2002) ("When making investment decisions, the old economic adage advises that one should ignore sunk costs, but people intuitively tend to let such costs influence their choices.").
456. That loss includes both the costs of tearing down the theater and the lesser value of the property as low-income housing in relation to the higher-valued movie theater.
457. For a discussion of endowment effects, see supra notes 216-18 and accompanying text. This waste analysis will not hold true if eliminating the existing use imposes an intergenerational externality. See Strahilevitz, supra note 227, at 793-94 (identifying problem with property destruction as imposing "intergenerational consequences, for better or worse"). By the same token, a regulation can also impose an intergenerational benefit. There is no reason, in the abstract, to suspect that existing uses will be more valuable in the future than the kinds of regulatory benefits the government might seek to obtain by eliminating an existing use. Unless there is some kind of systemic valuation failure for existing uses, the present value of existing uses should capture their value in the future.
458. Shavell, supra note 17, at 57-64.
459. See id. at 47 ("[A] party ought to continue with its period 1 precaution in period 2 if the cost of the new conventionally optimal precaution for period 2 harm would exceed the marginal reduction in expected harm that would be accomplished by a change to this precaution.").
460. See, e.g., Scott Hershovitz, Two Models of Tort (and Takings), 92 VA. L. REV. 1147, 1152 (2006) ("[T]he law aims to place liability on the least-cost avoider. The least-cost avoider is frequently the party best able to control a situation.");
461. Eric Rasmusen, Agency Law and Contract Formation, 6 AM. L. & ECON. REV. 369, 380 (2004) ("The least-cost avoider principle, broadly stated, asks which party has the lower cost of avoiding harm, and assigns liability to that party.").
462. This kind of reasoning is reminiscent of the "last clear chance" doctrine in torts, which "allowed plaintiffs to prevail despite their being the cheaper precaution taker against their injury." Robert H. Heidt, When Plaintiffs Are Premium Planners for Their Injuries: A Fresh Look at the Fireman's Rule, 82 IND. L.J. 745, 771 (2007). This doctrine has been replaced in most jurisdictions by comparative fault regimes.
463. Ehud Guttel, The Hidden Risk of Opportunistic Precautions, 93 VA. L. REV. 1389, 1418 n.62 (2007).
464. See infra notes 278-90 and accompanying text (discussing transitions literature).
465. For examination of the complexities of identifying the least-cost avoider in another context, see Oren Bar-Gill, The Behavioral Economics of Consumer Contracts, 92 MINN. L. REV. 749, 791 (2008), which discusses the asymmetrical positions of consumers and sophisticated sellers with regard to the ability to avoid mistakes.
466. See Margaret Jane Radin, Property and Personhood, 34 STAN. L. REV. 957, 965-66 (1982) (discussing whether people have property interest in their bodies).
467. See Margaret Jane Radin, Market-Inalienability, 100 HARV. L. REV. 1849, 1907-09 (1984) (describing application of market-inalienability theory to personhood).
468. Radin, supra note 237, at 972-75 (discussing Hegelian theory).
469. As Radin describes it, "Hegel's property theory is an occupancy theory; the owner's will must be present in the object." Id. at 973. The primacy of the object's existence, then, is essential to Radin's personhood perspective on property. Extrapolating from the "notion that the will is embodied in things," Radin concludes that "[t]he idea of embodied will... reminds us that people and things have ongoing relationships which have their own ebb and flow, and that these relationships can be very close to a person's center and sanity." Id. at 977. But see Radin, supra note 161, at 1692 (suggesting people may have personhood interests in plans to build residence).
470. Radin, supra note 237, at 959-60 (describing fungible property as opposite of personal property). Radin argues that "[t]he opposite of holding an object that has become a part of oneself is holding an object that is perfectly replaceable with other goods of equal market value. One holds such an object for purely instrumental reasons." Id.
471. Id. at 1004.
472. Individual owners of small businesses may well have their identities bound up in their commercial property. For a pleasant example, see Donna Paul, Fashion's Just a Job; Baking's a Destiny, N.Y. TIMES, Sept. 28, 2007, at F3 (describing young couple buying bakery that appeared far more important to them than their house). Line drawing is nevertheless hard, if not impossible. In an interesting new article, Professor Stephanie Stern questions whether personhood interests are actually at stake in the home or whether "residential protectionism" is simply the result of interest group capture.
473. See Stephanie M. Stern, Residential Protectionism and the Legal Mythology of Home, 107 MICH. L. REV. 1093, 1096 (2009).
474. See, e.g., Carol M. Rose, The Shadow of The Cathedral, 106 YALE L.J. 2175, 2187 (1997) ("The usual roles of property rules-defining rights and identifying rights-holders-. . . encourage individual investment, planning, and effort, because actors have a clearer sense of what they are getting.");
475. see also Abraham Bell & Gideon Parchomovsky, A Theory of Property, 90 CORNELL L. REV. 531, 573 (2005) ("The stability in ownership afforded by the law creates the possibility for developing new kinds of value in, and uses of, property that would otherwise be unavailable.");
476. Thomas W. Merrill & Henry E. Smith, Optimal Standardization in the Law of Property: The Numerus Clausus Principle, 110 YALE L.J. 1, 64 (2000) ("A rule that has been around a long time and is relatively unchanging is more likely to be understood because actors ... are more apt to have encountered the rule in the past and to have made some previous investment in comprehending the rule.").
477. See, e.g., Craig Anthony (Tony) Arnold, The Reconstitution of Property: Property as a Web of Interests, 26 HARV. ENVTL. L. REV. 281, 325 (2002) ("[Property] may involve a 'double bind' between reinforcing the status quo by compromising ideals and making very little real progress toward change, and reinforcing the status quo by insisting on Utopian ideals and making no progress toward change.").
478. See, e.g., Richard A. Epstein, International News Service v. Associated Press/ Custom and Law as Sources of Property Rights in News, 78 VA. L. REV. 85, 108 (1992) (arguing that distribution of property rights is " functional" and "forward-looking" and suggesting that "the central task is to develop that initial distribution of rights that leads to the shortest path for the productive use of natural resources-that is, to some form of allocative efficiency").
479. This may also be what Michelman was suggesting in the quotation accompanying note 162, supra.
480. The harm-prevention exception for regulatory takings liability clearly demonstrates that property is regularly put to a use that is, or later turns out to be, unreasonable. See, e.g., Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1026 (1992) (articulating nuisanceprevention defense); Hadacheck v. Sebastian, 239 U.S. 394 (1915) (upholding law barring operation of brick mills in residential areas).
481. See supra Part I.C (discussing vested rights doctrine).
482. See supra notes 132-56 and accompanying text (discussing investment-backed expectations prong of Penn Central test).
483. See Serkin, supra note 222, at 689-92 (discussing highest and best use as component of fair market value).
484. See Katrina Miriam Wyman, The Measure of Just Compensation, 41 U.C. DAVIS L. REV. 239, 250-51 (2007) (problematizing what it means for compensation to make property owners whole).
485. Carol Rose offered the following examples of such tradeoffs and concessions: A community might ask a developer to provide park space as a tradeoff for permission to build a new development, or to preserve a familiar community landmark in exchange for permission to build at a higher density; or the tenants of a low income area, through the local government as mediator, may negotiate with a highrise developer for low-income housing to offset the loss of inexpensive residential hotel space.
486. Rose, supra note 46, at 891 (footnotes omitted).
487. For a discussion of the Penn Central factors, see supra Part II.B.
488. See supra note 158 and accompanying text (discussing diminution in value test for takings liability).
489. WILLIAM A. FISCHEL, REGULATORY TAKINGS 139 (1995) [hereinafter FISCHEL, REG ULATORY TAKINGS].
490. See generally WILLIAM A. FISCHEL, HOMEVOTER HYPOTHESIS (2001) [hereinafter FISCHEL, HOMEVOTER HYPOTHESIS] (arguing that in face of homeowners' political power, developers and owners of undeveloped property need greater protection of property rights). Dean Treanor adopted a similar approach in his leading historical treatment of the Takings Clause, arguing for a political process-based interpretation focused on the political protection of property.
491. Treanor, supra note 165, at 708-10; see also Doremus, supra note 200, at 40 ("More searching review is appropriate where only a minority will bear the regulatory burden .. ..");
492. Saul Levmore, Takings, Torts, and Special Interests, 77 VA. L. REV. 1333, 1344-45 (1991) ("[W]hen ... the government's aims could have been achieved in many ways but the means chosen placed losses on an individual or on persons who are not part of an existing or easily organized political coalition, then we can expect to find a compensable taking.").
493. NEIL K. KOMESAR, LAW'S LIMITS 61 (2001) (explaining advantage of "groups with small numbers but high per capita stakes," whose members "have greater incentive to expend the effort necessary to recognize and understand the issues" over "groups with larger numbers and smaller per capita stakes").
494. Id. ("[F]or larger groups, the cost of participation depends heavily on the cost of organization, which in turn depends on both the size of the group to be organized and the difficulty of identifying and convincing potential allies.").
495. Id.
496. See supra Part III.C.2 (discussing subjective value).
497. See Einer R. Elhauge, Does Interest Group Theory Justify More Intrusive Judicial Review?, 101 YALE L.J. 31, 37 (1991) (predicting that "small groups with concentrated (high per capita) interests in lawmaking will come closer to their optimal level of petitioning than large groups with diffuse (low per capita) interests");
498. Amnon Lehavi & Amir N. Licht, Eminent Domain, Inc., 107 COLUM. L. REV. 1704, 1719 (2007) ("[Public choice theory] points to the disproportionate influence that special interest groups, and chiefly politically powerful real estate entrepreneurs, have over governmental decisions in land policy issues."). For further discussion of the insights of public choice theory and its implications for property protection,
499. see generally Daryl J. Levinson, Making Government Pay: Markets, Politics, and the Allocation of Constitutional Costs, 67 U. CHI. L. REV. 345 (2000),
500. and Christopher Serkin, Big Differences for Small Governments: Local Governments and the Takings Clause, 81 N.Y.U. L. REV. 1624, 1637-43 (2006).
501. See, e.g., Elhauge, supra note 261, at 39 (characterizing "[l]arge diffusely interested groups" as underrepresented and as having "a harder time collecting the resources necessary to monitor and evaluate developing issues, make campaign contributions, [and] present information to voters or officials").
502. For an account of those costs, see Serkin, supra note 261, at 1677-79.
503. FISCHEL, REGULATORY TAKINGS, supra note 256, at 139, 282;
504. see Hanoch Dagan, Takings and Distributive Justice, 85 VA. L. REV. 741, 777 n.119 (1999) (interpreting Fischel as supporting judicial intervention to protect undeveloped land from local governments);
505. Carol M. Rose, Takings, Federalism, Norms, 105 YALE L.J. 1121, 1126 (1996) (book review) (same);
506. see also William A. Fischel, Exploring the Kozinski Paradox: Why Is More Efficient Regulation a Taking of Property?, 67 CIII.-KENT L. REV. 865, 866 n.7 (1991) ("In many cases, however, zoning imposes burdens on one set of owners (e.g., owners of undeveloped land) to benefit another set of owners (e.g., owners of already-developed homes).").
507. See ALBERT O. HIRSCHMAN, EXIT, VOICE & LOYALTY: RESPONSES TO DECLINE IN FIRMS, ORGANIZATIONS, AND STATES 3 (1970).
508. For a thoroughgoing account of the role of exit and voice in local governments, including a description of Hirschman's theory,
509. see Vicki Been, "Exit" as a Constraint on Land Use Exactions: Rethinking the Unconstitutional Conditions Doctrine, 91 COLUM. L. REV. 473, 476 (1991).
510. See FISCHEL, REGULATORY TAKINGS, supra note 256, at 139 ("Owners of property whose services are elastic in supply can protect themselves from myopic local regulation by threatening to leave the jurisdiction. The remaining category, regulation of immobile property by independent local governments and state agencies, requires most of the attention of judges in regulatory takings cases.").
511. For a discussion of rent-seeking in land use regulations, see Abraham Bell & Gideon Parchomovsky, Compensating Against Corruption 3 (Mar. 3, 2008)
512. (unpublished manuscript, on file with the New York University Law Review) (arguing takings compensation is justified because it reduces profitability of rent-seeking behavior).
513. This claim comes with a substantial caveat: Some uses can be moved relatively easily. For example, many businesses do not depend on a specific location.
514. Cf. SHAVIRO, supra note 9, at 77 ("[T]here plainly would be a strong argument for allowing ex post facto criminal legislation, but for a concern about singling out.").
515. FISCHEL, HOMEVOTER HYPOTHESIS, supra note 256, at 87-96 (developing median voter model).
516. Serkin, supra note 261, at 1648.
517. Id.
518. FISCHEL, HOMEVOTER HYPOTHESIS, supra note 256, at 9 (discussing NIMBYism).
519. See Serkin, supra note 261, at 1661-64 (arguing that homeowners' political power dissipates at state and federal level).
520. The prescriptions arising from this likely political failure are discussed in more detail in Part IV.C, infra. Here, it is enough to repeat Professor Fischel's argument that in the takings context, judicial resources should be focused only on those situations where property owners are unlikely to have a meaningful political remedy. See Fischel, supra note 264, at 911-12.
521. Principal among those statutes are the Clean Air Act, the Clean Water Act, the Wilderness Act, the Americans with Disabilities Act, and a number of state statutes, each of which provides special treatment for existing uses. See supra notes 12-24 and accompanying text.
522. For a sampling of this literature, see generally Mitchell N. Berman, Constitutional Decision Rules, 90 VA. L. REV. 1, 10 (2004), which argues that decision rules are central to judicially-created constitutional doctrine;
523. Evan H. Caminker, Miranda and Some Puzzles of "Prophylactic" Rules, 70 U. CIN. L. REV. 1, 9 (2001), which argues that where risk of false negatives is high, a prophylactic rule might protect constitutional values;
524. and David A. Strauss, The Ubiquity of Prophylactic Rules, 55 U. CHI. L. REV. 190, 207-09 (1988), which defends constitutional rules based on institutional propensities.
525. See Nash & Revesz, supra note 10, at 1725 ("[R]elief from a transition in legal regimes is ordinarily inadvisable because it creates an incentive for societal actors not to anticipate changes in the governing law."); see also Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1070 n.5 (Stevens, J., dissenting) ("In the face of uncertainty about changes in the law, developers will overinvest, safe in the knowledge that if the law changes adversely, they will be entitled to compensation."); Serkin, supra note 222, at 677 & n.102 (citing further sources and giving example).
526. Dana, supra note 40, at 677-81 (describing "race to develop");
527. see also Joseph William Singer, The Ownership Society and Takings of Property: Castles, Investments, and Just Obligations, 30 HARV. ENVTL. L. REV. 309, 325 (2006) ("[Property owners ... should be forced to internalize [the risk of]... foreseeable new regulations designed to protect the public from the harms attendant on the cumulative effects of individual acts of ownership.").
528. See supra Part III.A (discussing inefficiency in terms of antiretroactivity laws).
529. 862 N.Y.S.2d 358 (App. Div. 2008).
530. Id. at 359-60.
531. In his careful taxonomy of retroactive effects, Professor Shaviro identifies instances in which retroactive application of rules will not enhance efficiency. SHAVIRO, supra note 9, at 47-53 (looking specifically at retroactive application of taxes).
532. Id. ; see also Logue, supra note 40, at 235-45 (identifying situations in which anticipation of legal change is desirable).
533. SHAVIRO, supra note 9, at 48-51; see also Logue, supra note 40, at 236-39 (discussing legal "disasters").
534. See Logue, supra note 40, at 239-42 ("[I]f the transition is undesirable, the optimal transition policy . . . would be a norm that actually discourages anticipation of the law change and encourages reliance on old law . . . .").
535. See id. at 236 (arguing that desirability of legal rule matters less when regulation destroys property values entirely and irreversibly). For discussion of the problem of social waste, see supra Part III.B.3.
536. Kaplow, supra note 9, at 529.
537. See id. at 529-31; see also Dana, supra note 40, at 679-80 (describing Kaplow's argument).
538. See Kaplow, supra note 9, at 528-30; see also SHAVIRO, supra note 9, at 49 ("Suppose I am considering building a house on a site where the government may at some point exercise its power of eminent domain in order to extend a highway. When and if the highway comes, should I be compensated for the value of my improvements? Here, my incentives will be better if the answer is no."); Levmore, supra note 40, at 1677-79 ("But if the government pays for losses suffered as a result of regulation, then the factory owner has no incentive to anticipate these regulations and to facilitate the move to better and safer methods."); Logue, supra note 40, at 237 ("To ensure that the individual has the ex ante incentives (that is, to force her to internalize the cost of her decision to build on this site), the consequentialist or economic framework would counsel against compensation . . . .").
539. It is, in fact, sufficiently complex that it demands considerably more treatment than it can be given here. In particular, different regulatory contexts may afford different opportunities for owners to modify their behavior in anticipation of government action. This is a topic that must be reserved for more comprehensive treatment in future work.
540. See, e.g., Doremus, supra note 200, at 16 ("Another efficiency concern is the worry that an unstable regulatory climate will inhibit investment, particularly investment that takes a long period of time to mature."). In the tax context, Logue has argued persuasively that failure to provide transition relief will result in taxpayers demanding a "default premium"-that is, more of a tax benefit in the future to induce such investments to account for the possibility of retroactive change. See Logue, supra note 199, at 1139-41.
541. See, e.g., Dana, supra note 40, at 694-95 & n.107 (collecting examples of accelerated development to beat regulatory clock).
542. For this reason, economist Robert Innes has argued that developed and undeveloped property should receive equal treatment for takings purposes. See Robert Innes, Takings, Compensation, and Equal Treatment for Owners of Developed and Undeveloped Property, 40 J.L. & ECON. 403, 406-07 (1997).'
543. See Serkin, supra note 261, at 1666-73 (describing governments' risk aversion).
544. See Innes, supra note 294, at 406 ("[T]he least valuable undeveloped land should be taken first, which implies that, if takings are not compensated, landowners have an incentive to develop their land early in order to reduce their risk of government appropriation.").
545. I credit Professor Fischel with this interesting suggestion.
546. This concern is often voiced in the zoning and land use literature. See supra note 7 (citing sources).
547. Favoring existing uses over potential future uses may also privilege a particular kind of property use. Criticisms of labor theories of property point out the harms of privileging active uses of property over passive ones. See, e.g., Jedediah Purdy, Property and Empire: The Law of Imperialism in Johnson v. M'Intosh, 75 GEO. WASH. L. REV. 329, 336 n.36 (2007) (describing Western accounts of property used to "justify colonial expropriations"). The labor theory, in turn, has justified such pernicious acts as the expropriation of land by early European settlers from Native Americans, whose use of land was not perceived as being sufficiently active to warrant legal protection. See generally id. It may continue to privilege buildings over open space, farmed land over conserved fields, and the like, although perhaps the definition of "use" can be made sufficiently capacious to encompass non-intensive uses such as conservation.
548. See supra Part III.D (discussing political economy of existing uses).
549. See Serkin, supra note 261, at 1666-67 (explaining why small local governments might be more risk averse than larger governments).
550. See id. at 1666-67, 1672-74.
551. The costs of monitoring local governments are typically much lower than the costs of monitoring larger governments. Id.
552. See supra notes 76-82 and accompanying text (discussing Prince George's County v. Sunrise Development Ltd. Partnership, 623 A.2d 1296 (Md. 1993)).
553. See supra note 92 and accompanying text (noting that distinction between preventing harm and conferring benefit is unsettled).
554. See City of Gaylord v. Maple Manor Invs., No. 266954, 2006 WL 2270494, at *5 (Mich. Ct. App. Aug. 8, 2006) (finding that home rule cities have authority, under police power, to require homeowners to connect to city's sewer system and cease use of wells).
555. For a thoroughgoing discussion of sophisticated cost-benefit analysis in government decisionmaking, see generally RICHARD L. REVESZ & MICHAEL A. LIVERMORE, RETAKING RATIONALITY: HOW COST-BENEFIT ANALYSIS CAN BETTER PROTECT THE ENVIRONMENT AND OUR HEALTH (2008).
556. for a sophisticated analysis of the systemic effect of grandfathering provisions in environmental regulations, see generally Nash & Revesz, supra note 10. For a formal model developed by Shavell to evaluate the effect of grandfathering provisions generally, see Shavell, supra note 17, at 57-67.
557. See Nash & Revesz, supra note 10, at 1712 ("In general, the question whether grandfathering combined with more stringent regulation of new sources will lead to more pollution is an empirical one."). There are, of course, competing and less rational accounts of how governments actually make decisions. See supra note 261 and accompanying text (discussing public choice theory).
558. See supra note 181 (citing sources discussing substantive due process).
559. These are summaries of the leading takings and due process tests, discussed in Part II, supra.
560. See supra note 168 (citing sources discussing economic substantive due process).
561. See supra Part I.D (discussing nuisance exception).
562. See supra Part IV.A (discussing incentives created by grandfathering).