Janice Smyth’s parents purchased some land in Falmouth, Massachusetts in 1975, hoping to one day build a retirement home there. Unfortunately, they died before they could commence building and the land passed to Janice. For 40 years, the land has been zoned residential and either Janice or her parents paid property taxes. Janice herself paid $70,000 to various professionals to prepare plans and applications to develop the property.
The city of Falmouth had different ideas, however. Being a coastal community, the city passed the Falmouth Wetlands Protection Bylaw in 1998, creating various “no disturbance zones” around wetlands and coastal banks. In 2008, the city strengthened its bylaw and, as a result, the only developable part of Mrs. Smyth’s land is a 115 square foot section in the northwest corner. Mrs. Smyth applied for variances and even agreed to build a house half the size of the original plan, but the city wouldn’t budge. Her property that had been worth $700,000 was assessed at $60,000, a 91.5 percent reduction in value.
Mrs. Smyth sued, alleging that the denial of the permit was a regulatory taking under the Fifth Amendment. Regulatory takings are different from the simplest form of a taking—that is, when the government just takes physical possession private property. Regulatory takings, by contrast, occur when various regulatory actions strip substantial value from a piece of property. They’re a little harder to define, and it doesn’t help that the Supreme Court’s jurisprudence on regulatory takings is muddled.
Read more at https://www.cato.org/blog/when-regulatory-taking-total-taking
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