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Supreme Court decision protects private property rights: 'extortionate demands' common in local jurisdictions, too.

While the news media is atwitter about the U.S. Supreme Court's decision on gay marriage, those of us interested in property rights were handed a great decision in the case of Koontz v. St. Johns River Water Management District.

Previous Supreme Courtlandmark rulings have established what is commonly called the Nollan-Dolan doctrine, which essentially says an agency or local government cannot demand improvements that are not necessary as a direct result of the development under consideration.

In Washington state, this idea is codified in state law and further demands that it is up to the jurisdiction requesting such an exaction to demonstrate it is "reasonably necessary as a direct result of the development."

This decision is interesting in that, it not only reaffirms the Nollan-Dolan doctrine, but amplifies it. The local jurisdiction in this case took the position that if they simply required an exaction so egregious that the landowner was forced to comply or have his permit denied, they could avoid the issue. In other words, they felt that if they simply denied the permit, there would be no taking and thus they could escape.

The Supreme Court disagreed and used some very strong language in their interpretation. (It was a 5-4 decision, but even the dissent agreed on the principle just discussed.)

Notably, the Court used terms like "extortion" to describe what these agencies and local jurisdictions do:

"Extortionate demands for property, in the land use permitting context, run afoul of the Takings Clause--not because they take property, but because they impermissibly burden the right not to have property taken without just compensation."

BNCW has long asserted that the local jurisdictions' habit of requiring road improvements and dedications of right-of-way is way out of bounds, and this decision confirms and amplifies that notion.

Douglas County is the most famous for killing projects by demanding these exactions, and equally famous for completely ignoring the Nollan-Dolan doctrine.

Here's how it works:

Joe Landowner applies to, say, subdivide his property. The county says that in order to get the subdivision approved, Joe must improve the streets leading to his property, even without any demonstration on the part the county, whatsoever, that those improvements are "reasonably necessary as a direct result of the project."

They simply ignore that principle and Joe is faced with a very unfair predicament--he either abandons the project because the costs of these improvements make it financially unfeasible, or he knuckles under and makes the improvements--because --he makes a business decision that he shouldn't have to make.

Is it better to abandon the improvements or pay for them, or is it better to challenge the county, legally, and not only pay the expense of the legal challenge, with an uncertain outcome, but find his project delayed for years? This is what the Supreme Court refers to in their decision as "extortive behavior." And that's exactly what it is, and the county staffers know they can get away with it.

Fair? Legal? Moral?--none of those. It is outright extortion and there is no way to sugar-coat that fact. We can only dream that these local jurisdictions will pay some notice to this most recent SCOTUS decision.
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Title Annotation:Building![TM] North Central Washington MEMBER MESSENGER
Publication:Wenatchee Business Journal
Date:Aug 1, 2013
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