As the economy improves, development is slowly making a comeback to Orange County. However, the Orange County that developers face today is much different than the developer friendly world that existed for decades through the OC’s golden age of building and development. Today, a developer will face a slew of opposition to its proposed development. Many times the opposition is started by strong anti-development community and political opposition to a proposed development. This is known as the so-called NIMBY effect (Not In My Back Yard). But Cities, knowing that a political disapproval is unsupportable, hide these political motives by couching their lack of approvals on what they believe are legally supportable grounds such as environmental effects, geologic hazards, or traffic congestion.
When a City acts unreasonably in the approval process, then the developer may assert a “regulatory taking” claim. A regulatory taking claim is based on the constitutional right contained in both the U.S. Constitution (5th amendment) and the California Constitution (Article 1, Sec. 19) that the government cannot take your property without due compensation. Because of budget constraints, Cities do not want to purchase a property, so, instead, they simply pass regulations to make it impossible to build. The impossibility created by the onerous regulations is akin to taking your property without paying for it hence the term “regulatory taking.”
There are two types of taking claims established by the United States Supreme Court. One is known as a Lucas taking which occurs when the government through regulation deprives you from all economically beneficial use of your property. I, along with attorney Stuart Miller, hold the distinction of being the only attorneys ever in the history of California to win a Lucas regulatory taking case. In Monks v. City of Rancho Palos Verdes, families owning 16 pristine, ocean view lots were denied by the City the ability to construct their dream homes. The lots were large and for years had doubled as a sort of parkland for existing residents. There was strong community opposition to the construction, and, so the City denied the building approvals based on (yes, you guessed it) environmental and geologic concerns. In holding that the City’s regulations constituted an unlawful taking of our clients’ properties, the California Court of Appeals stated that “[g]overnment authorities, of course, may not burden property by imposition of repetitive or unfair land-us procedures,” and “may not engage in endless stalling tactics” in the approval process.
The remedies for our clients included not only obtaining their permits, but also, significant compensation in the millions of dollars for the delay the City took in granting the permits.
The lesson to be learned is this. When a City says no to your proposed project do not stop there. You may have a regulatory taking claim which will not only get you your approvals, but also may entitle you to substantial compensation.
Scott W Wellman Attorney, © 2013