By Cat Lazaroff

WASHINGTON, DC, April 24, 2002 (ENS) - The Supreme Court has ruled that federal restrictions on property development do not always amount to a taking of private property, for which the government must compensate landowners. The ruling will make it harder for property owners to seek compensation for environmental regulations that restrict land use.

The six to three decision came in the case of Tahoe Sierra Preservation Council vs. Tahoe Regional Planning Agency (TRPA), in which property owners along the shores of Lake Tahoe had sought millions of dollars in compensation for a temporary moratorium on new development. It represents the first major defeat handed to property rights advocates by the Supreme Court in 15 years.

Justice John Paul Stevens wrote the Supreme Court's majority opinion. (Photo courtesy Collection of the Supreme Court of the United States)

"A rule that required compensation for every delay in the use of property would render routine government processes prohibitively expensive or encourage hasty decision making," Stevens wrote. "Such an important change in the law should be the product of legislative rule making rather than adjudication."

The Tahoe Sierra Preservation Council, a nonprofit property rights advocacy organization representing some 400 business and development interests in the Lake Tahoe area on the Nevada/California border, challenged a temporary development ban ordered by TRPA to allow time for the study and drafting of development standards to prevent the pollution of Lake Tahoe.

The TRPA was concerned that runoff from rampant development was polluting the world renowned clear waters of Lake Tahoe. In 1960, just 500 houses ringed the lake. By 2000, 19,000 homes were crowded into the same area.

In 1981, a temporary moratorium on development was imposed to allow the TRPA time to study the pollution problem and develop a long term plan for sustainable land use.

Lake Tahoe, located on the California - Nevada border, is among the most popular tourist destinations in either state. (Photo by Alexander Evans. Two photos courtesy U.S. Geological Survey)

"But the Constitution contains no comparable reference to regulations that prohibit a property owner from making certain uses of her private property," wrote Justice Stevens.

The American Planning Association (APA) and the U.S. government both filed briefs in support of TRPA, a bi-state organization created in 1969 to protect Lake Tahoe and the surrounding environment in California and Nevada.

The APA argued that planners need to have the ability to use interim development controls and temporary bans on development to avoid making decisions that could harm the natural environment and human communities.

"Without the use of a temporary moratorium, the public would effectively exchange the right to think about development before breaking ground for impatience," said Jeff Soule, policy director for APA. "The property rights of Lake Tahoe include the right to remain unpolluted, scenic and reasonably planned."

The view from Tahoe City on Lake Tahoe. (Photo by Dale Boland)

However, they upheld a decade old decision that represents one of the Supreme Court's most important taking opinions. In Lucas v. South Carolina Coastal Council, the court determined that land use restrictions that permanently restrict development, depriving landowners of all income from the land, are "categorical takings" that must be compensated under the Fifth Amendment.

Justice Stevens wrote on Tuesday that compensation must still be given in "the extraordinary case in which a regulation permanently deprives property of all value."

However, the categorical takings concept should not apply to any and all land use restrictions imposed by federal regulations, Stevens said.

"Land use regulations are ubiquitous and most of them impact property values in some tangential way - often in completely unanticipated ways," wrote Stevens. "Treating them all as per se takings would transform government regulation into a luxury few governments could afford. By contrast, physical appropriations are relatively rare, easily identified, and usually represent a greater affront to individual property rights."

View from Christopher's Loop above Sand Harbor on the Lake Tahoe Rim Trail between Mount Rose and Spooner Summit. (Photo by Wolfgang Kohz, courtesy Tahoe Rim Trail Association)

The Community Rights Counsel filed a brief in the Tahoe case for the National Governors Association, the Council of State Governments, and the National League of Cities, among others, supporting the Tahoe Regional Planning Agency.

Property rights groups that supported the Tahoe Sierra Preservation Council in its quest for compensation criticized the court ruling.

"The nation's home builders ... fear that the Supreme Court's decision could have a pernicious side effect: moratorium mania," said Gary Garczynski, president of the National Association of Home Builders. "The development moratorium is the most draconian of governmental actions in the land development review system and is most susceptible to great abuse by a local government."

Land use restrictions, even temporary ones, could "inflate housing prices by limiting supply," wrote Garczynski, a builder/developer from Woodbridge, Virginia, just outside the rapidly growing Washington DC region. "This is bad news for working families in search of affordable new housing, bad news for builders trying to provide that housing and bad news for communities wishing to house and employ all segments of society."

Sand Harbor on Lake Tahoe. (Photo by Alexander Evans, courtesy U.S. Geological Survey)

The Supreme Court decision will allow land managers to continue to slow or restrict development around Lake Tahoe and other sensitive areas across the nation.

The Supreme Court's majority and minority decisions are available at: http://www.supremecourtus.gov/