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Land Use Permits Must Be Reasonable

Not So Fast. Land Use Permit Conditions Must Be Reasonable

By: Harry Malka, Esquire

Your Construction Law Firm TM

In Koontz v. St. Johns River Water Management Dist. 77 So. 3d 1220 (2013), Coy Koontz, Sr. (“Koontz”), sought permits to develop a section of his property from the St. Johns River Water Management District (“District”). As required by Florida law, Koontz offered to mitigate the environmental effects of his proposed development by agreeing to deed nearly three­ quarters of his property to the District to use as a conservation easement. The District rejected Koontz’s proposal and informed him that it would approve construction only if he (1) reduced the size of his development and deeded the remaining (larger) portion of his property to the Dis­trict or (2) paid for contractors to make improvements to District-­owned wetlands several miles away. Believing the District’s de­mands to be excessive, Koontz filed suit under a Florida law that provides for money damages when an agency’s action is an “unreasonable exercise of the state’s police power constituting a taking without just compensation.”

The Trial Court and the Court of Appeals both found that the District’s actions were unlawful because they failed to follow the requirements of two cases previously decided by the United States Supreme Court (Nollan v. California Coastal Comm’n, 483 U. S. 825, and Dolan v. City of Tigard, 512 U. S. 374). Those cases held that the government may condition the approval of a land ­use permit on the owner’s relinquishment of a portion of his property, only where there is a “nexus and rough proportionality” between the gov­ernment’s demand and the effects of the proposed land use. In other words, there must be a sufficient relationship between the intended use of the property and the demands made by the District to justify those demands. However, the Florida Supreme Court reversed the lower courts, finding that the Nollan and Dolan cases did not apply because (1) the District denied Koontz’s application, and (2) a demand for money cannot give rise to a claim under Nollan and Dolan. Koontz appealed the Florida Supreme Court’s decision to the United States Supreme Court.

The U.S. Supreme Court accepted the case, and reversed the Florida Supreme Court’s decision, holding that the government’s demand for property from a land-use permit applicant must satisfy the Nollan/ Dolan requirements even when (1) it denies the permit and (2) demands money instead of real property. The U.S. Supreme Court reasoned that the “Takings Clause” of the Fifth Amendment to the U.S. Constitution prohibits the government from coercing people into giving their property to the government without “just compensation”. The standards set out in Nollan and Dolan reflect the danger of governmental coercion in this context while accommodating the government’s legitimate need to offset the public costs of development through land use exactions. The Court held the District’s demands for property and/or money in exchange for granting the land-use permit­ violated the Fifth Amendment’s “Takings Clause” because they violated Koontz’s right not to have property taken without just compensation. It did not matter that the District might have been able to deny Koontz’s application outright without giving him the option of securing a permit by agreeing to spend money improving public lands.

This case demonstrates that the government’s power to limit the use of one’s property is not unlimited. This case, along with the Nollan and Dolan cases, shows that the law will protect property owners from the risk that the government may deploy its substantial power in land-use permitting to unlawfully take the property of its citizens. Although the government has the authority to impose reasonable conditions when issuing land-use permits, those conditions must be reasonably related to the proposed use. The government may not impose conditions that simply serve governmental goals not reasonably related to the potential effects of the proposed use of the property at issue.

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