When a State 'Takes' Property

July 05, 1992

The Supreme Court has ruled that a state's refusal, on environmental grounds, to allow someone to build a beach house on his own property may require the state to pay the owner the full value of his land. This ruling is being hailed by property-owner groups. Some say the ruling flatly forbids states from stopping development along waterfronts and on non-tidal wetlands without paying compensation.

If that interpretation of the court's ruling were correct, virtually all land-use planning as well as environmental protection laws and policies would be seriously compromised. States and localities simply could not afford to pay the economic costs involved in so-called "regulatory takings": situations in which a property owner does not lose his or her property (such as when a highway is built on it) but loses the most valuable use of it. Fortunately, this is not what the Supreme Court said.

The case involved a South Carolina developer whose two oceanfront lots were ruled unfit for houses by the state. The state was alarmed that erosion accelerated by oceanfront development was posing a threat to other property owners, to the natural habitat and to tourism. The developer argued that this amounted to a total taking of his property. Even worse in the view of some property-rights advocates, the law was passed after the developer bought the property.

As we read Justice Antonin Scalia's opinion, what the court said was quite narrow: If a state denies a property owner (1) "all economically viable use of his land" and (2) if the law is a new one that is not consistent with the general land-use principles the state had been following in the past or clearly responsive to changed conditions, then and only then would the owner be eligible for compensation. We doubt either "if" is true in the South Carolina case. (The Supreme Court sent it back for state courts to decide.)

We have no doubt about the effect this decision will have on Maryland's Critical Area law and other land-use restrictions. There will be no effect. The state almost never forbids any building on a property, even in the most sensitive of settings, and the law allows waivers to build when indicated. The law is also consistent with long-existing conservation laws and practices.

Private property rights are highly esteemed in this country, properly so. But those rights have always been subject to modification in the public interest. Indeed, the idea of "regulatory taking" is a 20th century concept. There was never compensation for such regulatory impact before the 1920s. Had there been less beachfront development in South Carolina in 1989, Hurricane Hugo would have caused far less loss of life and property damage. States have a right -- a responsibility -- to do what they can to protect lives, property and natural resources. That is especially true of states like Maryland, with its magnificent but vulnerable bay and ocean coastline.

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