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~ Ill [ I Ill AUGUST 1994 AMERICAN PLANNING ASSOCIATION Tigard planner Liz Newton exhibits the digital maps the city uses to plan its bi©,cle trails ,md floodplains. Deciding Do/an: A New "Rough Proportionality" Test B)' W/ark S. Dennison Well, the U.S. Supreme Court has done it again. On June 24, in Dolan v. CiO, of Tigard, the Court wrote yet another chapter in its continuing saga about the degree to which land-use regulations may curtail private properry rights. In a case involving development exactions, the Court has taken its furthest step ever toward protecting landowners from government regulation of property by creating a new "proportionality" standard for evaluating the necessary "nexus" between the condition imposed and the public need created by the proposed land use. Local government planners and regulators will need to exercise greater caution in imposing exactions, impact fees, and conditions on development approvals in light of this decision. In order to understand fully Do/an's ramifications for local land-use regulation, it is important to examine both the factual and legal contexts. Although the case's implications may be discussed in terms specific to environmental law, zoning regulation, or land-use planning, these areas are so closed related, that they will be referred to here under the broader heading of land-use regulation. Regulatory Takings Law Before analyzing Do/an, it is helpful to review prior rulings by the U.S. Supreme Court concerning regulatory takings law. In general terms, a regulatory taking results when a governmental regulation places such a burdensome restriction on a landowner's use of property, that the government has for all intents and purposes "taken" the landowner's property. The debatable issue is exactly how much the regular:on must interfere with private property rights before it is deemed a "taking." Property owners and regulators have found it difficult to glean much guidance on regulatory takings from the U.S. Supreme Court's decisions. With no set formula to follow, state and federal courts have likewise struggled to apply any meaningful standards. The Supreme Court has basically taken an ad hoc approach, which evaluates the individual facts and circumstances of each particular case in light of three general factors: (1) the nature of the government action; (2) the regulation's economic impact; and (3) interference with the landowner's reasonable investment- backed expectations, as in Penn Central Transportation Co. v. City of New York, 438 U.S. 104 (1978). However, no case requires lower courts to rely on alt three factors to determine whether a regulatory taking has occurred. Consequently, the law remains unsettled in manx, respects. Development exactions and building permit conditions are often given the most scrutiny under the first factor, which says that regulation must substantially advance a legitimate state interest. Over the years, state court rakings challenges to development conditions, exactions, and impact fees rarely have succeeded. Conditions of development approval requiring on-site improvements closely related to the needs created by the proposed project have generally survived taking challenges based on the nature of the government regulation. Off-site exactions, on the other hand, are much more problematic because it is often unclear how a particular development project creates the need for off-site public improvements and facilities. The U.S. Supreme Court's recent pro-property rights alignment has, however, placed a much greater burden on regulators ro prove the legitimate need for specific building