Agenda - Planning Commission - 09/07/2017

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August 10, 2017 I Volume 11 I Issue 15 Zoning Bulletin The Takings Clause of the Fifth Amendment of the United States Constitu- tion provides that private property shall not "be taken for public use, without just compensation." The Takings Clause is made applicable to the States through the Fourteenth Amendment. Generally, the Takings Clause requires private property owners be compensated when their property is acquired by the government for a public purpose. Courts have also recognized that govern- ment regulation may be so onerous as to constitute a taking, such as: when a regulation "denies all economically beneficial or productive use of land;" and when a regulation "impedes the use of property without depriving the owner of all economically beneficial use." Still, courts recognize that "[t]he complete deprivation of use will not require compensation if the challenged limitations `inhere . . . in the restrictions that background principles of the State's law of property and nuisance already placed upon land ownership.' " Here, the Murrs contended that the state and county regulations deprived them of all economically beneficial or productive use of Lot E, which they submitted was appraised at a value of $40,000. The State of Wisconsin ("Wisconsin") and St. Croix County (the "County") (hereinafter, collectively, the "Respondents") countered that in looking at the issue of whether there was a regulatory taking here, the two lots had to be considered as a single whole lot due to their merger under the regulations. Respondents submitted appraisal values of: $698,300 for the two lots together as regulated, and $771,000 for the lots as two distinct buildable properties; and $373,000 for Lot F as a single lot with improvements. Finding there were no issues of material fact in dispute, and deciding the matter on the law alone, the County Circuit Court granted summary judgment to the Respondents. The court found that the relevant regulations did not con- stitute a regulatory taking because the Murrs could still build a new cabin on either lot or across both. The court also found that the Murrs had not been deprived of all economic value of their property, because the decrease in mar- ket value of the unified lots as compared to the lots had they been distinct buildable properties was less than 10 percent (e.g., $771,000 vs. $698,300). The Murrs appealed. The State Court of Appeals affirmed. The court held that the regulatory takings analysis properly focused on Lots E and F together and that, using that framework, the merger regulations did not effect a taking. The Murrs again appealed. The Supreme Court of Wisconsin denied discretionary review. The Supreme Court of the United States granted certiorari. DECISION: Judgment of Wisconsin Court of Appeals affirmed. The Supreme Court of the United States held that the state and county regulations challenged by the Murrs did not work a regulatory taking on the Murrs. The Court explained that because a test for regulatory taking requires a court to compare the value that has been taken from the property with the value that remains in the property, the court must, critically, determine how to define the unit of property "whose value is to furnish the denominator of the fraction." Again, here, the Murrs had argued that the "denominator" was Lot E, such that with the value of Lot E as both the numerator and denominator- 4 ©2017 Thomson Reuters