Pillsbury Winthrop Shaw Pittman

US Supreme Court expands protections for permit applicants under the Takings Clause

On 25 June 2013, the US Supreme Court, in a 5–4 decision in Koontz v St Johns River Water Management District, extended the ‘nexus’ and ‘rough proportionality’ standards of its landmark Nollan and Dolan decisions. Those standards now apply to conditional permit denials by government agencies and to ‘monetary exactions’ imposed as conditions of permit approvals.

The seminal cases of Nollan v California Coastal Comm’n and Dolan v City of Tigard prohibit the government from conditioning approval of a land use permit on the applicant/owner’s relinquishment of a portion of his or her property unless there is an ‘essential nexus’ and ‘rough proportionality’ between the agency demand and the effects of the proposed land use.

Both decisions stemmed from a permitting authority using its substantial power and discretion to overreach in demanding concessions that were not adequately tied to project effects, but rather served the agency’s broader public objectives. The court held that these agency decisions diminished the applicant’s property value without justification, thereby violating the Takings Clause, which protects land use permit applicants from an unfair allocation of public burdens…

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