Brief Fact Summary. A man bought land near a beach with the intent of constructing residences on the property. A statute was enacted which prevented him from doing so.
Synopsis of Rule of Law. When a landowner has been deprived by the state of all economically viable use of his property, this constitutes a taking which requires just compensation.
Issue. If a person had been deprived of all economical use of his property by an act of the state, has a taking occurred?
While property may be regulated to a certain extent, if regulation goes too far, it will be a taking. A regulation can be a taking when it denies all economically beneficial or productive use of land. The Fifth Amendment is violated when land-use regulation does not substantially advance legitimate state interests or denies an owner of all economically viable uses of his land.
When the owner of real property has been called upon to leave his property economically idle in the name of the public good, he has suffered a taking.
When the state seeks to sustain a regulation that deprives land of all economically beneficial use, we think it may resist compensation only if the logically antecedent inquiry into the nature of the owner’s estate shows that the proscribed use interests were not part of his title to begin with. The property owner must expect the use of his property to be restricted, from time to time, by various measures newly enacted by the state in legitimate exercise of its police powers.
In the case of land, we think the notion that title is somehow held subject to the implied limitation that the state may subsequently eliminate all economically valuable use is inconsistent with the takings clause.
When a regulation that prohibits all economically productive or beneficial uses of land goes beyond what the relevant background principles would dictate, compensation must be paid to sustain it.
If the state does not want to compensate Petitioner, it must identify background principles of nuisance and property law that prohibit the uses it now intends in the circumstances in which the property is presently found.
(Justice Harry A. Blackmun) The finding that the property lost all economic value is erroneous. Petitioner can still enjoy other attributes of ownership, such as the right to exclude others. The government has the ability to regulate property without compensation no matter how adverse the financial effect on the owner may be. The state has full power to prohibit an owner’s use of property if it is harmful to the public.
(Justice John Paul Stevens) The Court’s new categorical rule requiring compensation when an owner is denied economically viable use of his land is wholly arbitrary. The holding freezes the state’s common law, denying the legislature much of its traditional power to revise the law governing the rights and uses of property.
Concurrence. It is curious to find that a beachfront property loses all value because of a development restriction. The finding of no value must be considered under the takings clause by reference to the owner’s reasonable, investment-backed expectations. The takings clause, while conferring substantial protection on property owners, does not eliminate the police power of the state to enact limitations on the use of their property. The state should not be prevented from enacting new regulatory initiative in response to changing conditions, and courts must consider all reasonable expectations whatever their source. The takings clause does not require a static body of state property law.
Discussion. The court has imposed a bright line rule, which states that a taking is deemed to have occurred when an owner has been deprived of all economically viable use of his land. Banning any building on land is enough to deny an owner all economically viable use of the land.