George's Information and Comments

Growth Impact Action Committee

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THE “TAKINGS ISSUE” – WHAT CONSTITUTES A “TAKING?”

8/22/06 Update from the 8/21 submission at the author's request.

The author of this illuminating article prefers anonymity, but it is extremely important that communities, individuals and political leaders understand, that for any legislative issue, there is absolutely no legal requirement to allow an owner to get the maximum profit from his property. "[C]ardinal is the principle that what is best for the body politic in the long run must prevail over the interests of particular individuals."

THE “TAKINGS ISSUE” – WHAT CONSTITUTES A “TAKING?”

WOULD DOWNZONING AN EXISTING RESIDENTIAL SUBDIVISION TO A LOWER DENSITY ZONING DISTRICT CONSTITUTE AN UNLAWFUL TAKING OF LAND?

Background:  Some public officials when discussing a request to downzone existing residential subdivisions and their commercial golf courses to lower density classifications are making statements to the affect that if Horry County Government changes the zoning rules and regulations applying to the use of private property the County is committing an unlawful act and would be guilty of a “taking of land.” 

Question:  What is a taking of land, and what is the law?   

The law on the “taking of land”:  The American Law of Zoning, 2^nd Edition, Vols 1-5. Robert M. Anderson, New York, The Lawyers Co-Operative Publishing Co. is a classic professional legal reference work on zoning from which the following information is cited.  In Vol.1, Section 3.26-Confiscation of Land, the author states that “a zoning ordinance which deprives a landowner of the entire use value of his property is unconstitutional.  Such an ordinance is said to be confiscatory.  It effects a taking of property without due process of law, in violation of the Fourteenth Amendment to the Constitution of the United States, and without compensation in violation of provisions found in the constitutions of several states.”   “It is clear that a zoning ordinance is not unconstitutional simply because it denies to a landowner the highest and best use of his land, nor is such an ordinance unconstitutional merely because it reduces the use value of a particular parcel of land, provided that the regulation bears a reasonable relation to the public health, safety, morals, or welfare.  But an ordinance which confiscates land is a taking proscribed by the Constitution.  The problem is to fix the point where permissible reduction in use value ends and an unconstitutional taking begins.”  “A zoning ordinance is confiscatory which so limits the use of land that all feasible uses are proscribed.  Property is taken without due process of law where it is unusable for any purpose permitted by the applicable zoning restrictions.” 

In Section 3.27 The Factor of Financial Loss, the author states that “examination of a representative group of cases in which the courts specifically mentioned proof of the value of the subject land if used for a permitted purpose, as compared with its value if used for a purpose outlawed by the ordinance, did not yield a precise formula for determining where regulation crosses the line and becomes confiscation.  If any conclusion is warranted by this sampling, it is that financial loss is a relevant consideration, but not a single decisive one.”

In Section 3.24 Highest and Best Use, the author states that “it does not follow that a zoning ordinance is invalid simply because it does not permit or require the most profitable use of each parcel of land.  A zoning ordinance is not unconstitutional, as applied to particular land, merely because it prohibits a use which is demonstrably the ‘highest and best’ use of the land in question.  If, for example, a landowner can prove that the ‘highest and best’ use of his land would be for the construction of apartment houses, but that the zoning ordinance permits only single-family dwellings, this is insufficient proof that the ordinance is unconstitutional.” 

Summary Comments:  There is no statutory law, either state or federal, regarding the taking of land or inverse condemnation via downzoning.  The law is determined by the state and federal courts on a case-by-case basis.  Case law on zoning has been building since the classic landmark U.S. Supreme Court case in 1926 Euclid v. Ambler Realty Co. that established the right of local governments to establish comprehensive community zoning ordinances.  The author states that “zoning generally, and the standard components of zoning ordinances, have not experienced a major judicial disapproval since 1926…”   The author emphasizes the principle of balancing of public and private interests by quoting the New York State Supreme Court which wrote that “zoning laws, enacted as they are to promote the health, safety and welfare of the community as a whole, necessarily entail hardships and difficulties for some individual owners.  No zoning plan can possibly provide for the general good and at the same time so accommodate the private interest that everyone is satisfied.  While precise delimitation is impossible, cardinal is the principle that what is best for the body politic in the long run must prevail over the interests of particular individuals…There must, however, be a proper balance between the welfare of the public and the rights of the private owner.”

Example =  Property Owners Request Downzone From R-7 to R-3:  There are 220 acres of land within Example Subdivision and it contains 423 lots/homes.  Each lot contains at least 15,000 square feet (SF) of land (100’ x 150’).  The net density of homes is 2.9 lots/homes per acre and the gross density (including the street rights-of-way and drainage ponds but excluding a community golf course) is 1.9 homes/lots per acre.  The streets and homes are designed to fit within a series of golf course fairways in a linear pattern that matches and compliments the golf course.  Example Subdivision was platted as a low-density golf course community and is governed by private deed restrictions enforced by its Property Owners Association via the local courts. 

The current Horry County zoning of the area is the R-7 district allowing: (1) single-family dwellings on 6,000 SF lots, (2) two-family (duplex) dwellings on 8,000 SF lots, (3) golf courses, (4) accessory uses, (5) churches, (6) publicly owned buildings, (7) utility substations, (8) water towers, (9) private education facilities and day care centers, (10) accessory living quarters within the dwelling or in separate structure, and (11) bed and breakfast establishments.   Many of the permitted uses in the mixed-use R-7 zoning district are prohibited uses under the deed restrictions.  Of special note is the allowance of residences in two-family (duplex) dwellings on 8,000 SF lots.  The allowable net density in the R-7 district is 7 - 6,000 SF single-family lots per acre and/or 10.8 - 8,000 SF duplex lots per acre.  The Horry County Zoning Ordinance R-7 district is not compatible with the intent of the legal covenants and deed restrictions on the properties within Example Subdivision (an error in the original zoning designation) because it will allow the redevelopment of the commercial golf course (also zoned R-7) as a medium-density residential development intermingled directly into the existing low-density single-family community.  The redevelopment should be compatible with the existing lot sizes/uses.

The Example Subdivision property owners are requesting that the entire tract of land encompassing the 423 existing lots plus those golf course fairways that are intermingled with the existing single-family low density residential area be rezoned to an R-3 residential district in order to correct the original zoning error and preserve the low-density nature of the community to the greatest extent possible for the health, safety and general welfare of the current property owners and residents. The R-3 residential district allows for the same mixed list of residential and commercial uses with the notable exception of the elimination of the medium-density small lots and the 2-family or duplex dwellings.  The commercial golf course is still a permitted use in the R-3 district. 

The possibility of the redevelopment of the existing commercial golf course is clearly an unwanted event according to the property owners.  Example Subdivision was developed and sold as a golf course community and redevelopment and elimination of the golf course will undoubtedly have a negative impact on the marketability of existing homes in the community and also their value.  The entire environment and ambience of the golf course community with its beautiful trees and ample open spaces and walking trails (which made the lots marketable and added value) will be destroyed by the redevelopment of the golf course.

Would Downzoning Example Subdivision From R-7 to R-3 Constitute a Taking of Land by the Zoning Ordinance for the Golf Course Owner?    In fact, the new golf course owners have purchased a commercial (profit-making) golf course.  They are operating the golf course today and they clearly have a legal right to continue to operate the commercial golf course.  Rezoning the golf course land that lies within Example Subdivision to R-3 low-density single-family residential to match the existing 423 single-family lots will in no way impact the golf course owner’s property rights to operate a commercial golf course.  The commercial golf course is the only permitted land use to which the new owner has a “right” at this time.

If the new golf course owner should choose to request from the County Government permission to end the commercial golf course use and convert the land to another allowable land use the owner must follow the development rules and regulations in effect at the time of the County’s approval of the development permit.  The new South Carolina Vested Rights Act clearly states that the developer acquires its vested (non-changeable) right to develop the property only after meeting all of the development requirements of the County Government and receiving official permission to develop.  Based on the author’s discussion above of “the law of takings” there is no discernable grounds for the new golf course property owner to claim a taking of land by downzoning a R-7 to a R-3 district.  Diminution of possible future land development profits does not qualify as a legitimate cause for a taking of land according to the author of the American Law of Zoning.  Property owners of Example Subdivision believe that rezoning the subdivision  from the R-7 district to a R-3 district will correct the County Government’s original zoning error (the existing subdivision meets R-3 standards) and provide the proper balance between the welfare of the public and the rights of the private property owners.