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Land Matters: Property Rights and Wrongs

It’s easy to see where the relationship between Coy Koontz and the state of Florida went off the rails almost 20 years ago. Koontz had 14.9 acres he’d bought in 1972 next to two busy roads in an Orlando suburb. He wanted a permit to develop 3.7 acres close to one of the roads for a shopping center and put about 11 acres aside in a conservation easement. But the regional water management district (one of five created by the state, also in 1972, to stop the destruction of wetlands) said it would let him develop one acre and conserve nearly 14 acres; alternatively, he could have it his way if he also paid for an offset, some ditch or culvert project nearby that would help sustain 50 acres of wetlands. Koontz did not find either option to his liking. He did not get a permit, and this situation eventually led, on June 25, to the most momentous property-rights decision by the Supreme Court in at least a generation.

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It became a constitutional matter for the court under the Takings Clause of the Fifth Amendment, on the grounds that the state was preventing Koontz from exploiting his property’s value to the extent of his wishes unless he parted with money to do good works elsewhere on state land at the state’s behest. The Supreme Court, in a 5–4 majority opinion written by Justice Samuel Alito, ruled in favor of Koontz. Alito called the state’s demands “extortionate.” The opinion expanded on previous rulings on takings, declaring, in effect, that Florida’s denial of a permit can be as much an infringement on property rights as a permit that requires conditions, as earlier decisions had found. (The case was considered unusual because Koontz never lost any money or property, so in this takings case, there was no taking.) The decision puts into question many of the conditions and impact fees that localities impose, in return for the right to develop, to prevent environmental harm, and to pay for schools, infrastructure, streetscapes, parks, and various services. Any of these conditions or fees may potentially see challenges in court from now on.

Advocates for property rights are thrilled by the decision. The National Association of Home Builders, real estate groups, building owners, the Farm Bureau, shopping center advocates, and the U.S. Chamber of Commerce, among others, filed friend-of-the-court briefs in favor of Koontz and his few acres of development. (Koontz died in 2000; his son, Coy Koontz Jr., has continued the case.) The home builders called the decision a “huge victory” because it “gives landowners ammunition to fight permitting officials that attempt to hold up approvals until the landowner surrenders to their extortion.”

So there’s one end of the reason spectrum—ammunition and extortion and that whole mess. On the other end, the American Planning Association, understandably, is less happy. It called the Koontz decision “an unnecessary blow to state and local governments attempting to reduce development impacts on the environment.” The association’s CEO, W. Paul Farmer, said in a statement that the court’s decision allows property owners to decide the level of mitigation they’ll accept from regulators, wielding the threat of lawsuits on their side. Other observers have said it will hurt developers by encouraging planning officials to reject permits outright rather than quibble over whether the conditions attached to a permit are fair.

Justice Elena Kagan warned in her dissenting opinion that Alito’s ruling will broadly disrupt many of the routine rules and conditions that localities use to balance development and its ill effects. Other critics of the decision have been plaintively returning to the fact that the state didn’t take anything from Koontz but rather was giving him a couple of choices.

Looking back on those choices, though, they seem rather meager. To a guy who either way was willing to conserve 75 percent of his land, the state said he could develop one acre at no additional cost or develop three if he paid as much as $100,000 to save more than 15 times as much land. That’s not a choice so much as an intelligence test. Koontz cut his losses, as it were, and he also cut his gains, and the state came out no richer financially or environmentally. What could have become a genuinely good faith transaction, with a little more compromise applied by the state, has two decades later brought about a legal mood in the land-use world where spite and distrust are much more likely to hold sway, and that’s bad for anyone who cares about the prudent use of land.


Bradford McKee
Editor

Comments
richard.g.drum@usace.army.mil July 30, 2013 8:31 AM
Good article Mr. McKee -- not such a good decision by the high court though. As a property owner, I too am a champion of property rights, but without some ability by governments to set rules for land development and to establish guidelines for mitigation of anticipated impacts, our environment is at risk from predatory developers. Its interesting that Justice Alito didn't look carefully at some of his own federal agencies that hold critical projects at bay by exacting heavy mitigation penalties on other agencies, but wouldn't let a state protect their environment through a mitigation process. Besides that, Mr. Koontz didn't lose the complete value of the property, that should have triggered a taking.
rumiislam02@gmail.com October 20, 2013 12:04 PM
I have enjoyed reading your articles. It is well written. It looks like you spend a large amount of time and effort in writing the blog. I am appreciating your effort.
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