Agenda - Planning Commission - 10/07/1997

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'-! Tahoe Agency Loses Suifum Case A May 27 decision by the U.S. Supreme Court has given a landowner the right to sue for damages for a regulatory taking over her inability to develop a restrictively zoned lot near Lake Tahoe with a house. The Court ruled in her favor despite the availability of a complex scheme that potentially allowed her to transfer her development rights to other property in the area. In Suitum v. Tahoe Regional Planning Agenry (No. 96-243), the Court unanirnously held.that Bernardine Suitum's takings claim was ripe for adjudication because she had received a "final decision" from the agency regarding the application of its regulations to her property. Suitum and her late husband bought an undeveloped lot in Washoe County, Nevada, in 1972. The land was in the jurisdiction of the Tahoe Regional Planning Agency (TRPA), created through a 1969 interstate compact between California and Nevada to regulate development in the Lake Tahoe Basin. The compact was amended in 1980 with the approval of . Congress, which must ratify such agreements under the U.S. Constitution. The compact required the agency to adopt a plan barring any development exceeding specific "environmental threshol~ carrying capacities" as the regional agency might find appropnate. The agency adopted a new regional plan in 1987. That plan provided for an "Individual Parcel Evaluation System" (IPES) to rate the suitability of vacant residential parcels for building and other modifications. Under this system, any property must attain a minimum IPES score in order to qualify for construction, but an undeveloped parcel in certain areas that carry runoff into the watershed-known as Stream Environment Zones (SEZ)-automatically receives an IPES score of zero. With a few exceptions, the agency's rules permit no additional land coverage or other permanent land disturbance on such a parcel. In order to blunt the sharpness of the restrictions, the agency grants the property owners transferable development rights (TDRs) that may be sold to owners of other parcels eligible for construction, subject to the agency's approval based on the receiving parcel's eligibility for development. (The Court noted that the Lake Tahoe plan otherwise "does not provide for the variances and exceptions of conventional land use schemes.") There are three types ofTDRs: (1) a "Residential Development Right" to place a residential unit on a buildable parcel (owners of land in a SEZ could also obtain and transfer. up to three bonus Residential Development Rights); (2) a "Residential Allocation" to begin construction in a given year, but which expires at year's end; and (3) a "Land Coverage Right" for each square foot of impermeable cover placed upon land. SEZ owners, like other property owners, can apply for Residential Allocations, awarded by local governments in random drawings each year. In 1989, Suitum obtained a residential allocation through Washoe County's annual drawing. When she applied to the regional agency for permission to build a house on her lot, the agency determined that her property was located in an SEZ, assigned it an IPES score of zero, and denied her permission to build. She appealed the denial to the agency's governing board, which also denied relief. After TRPA turned down her request for relief, Suitum did not attempt to transfer any of the TDRs that were hers under 4 the 1987 plan. The Court noted that "there is no dispute" that Suitum still had a Residential Development Right, plus Land Coverage Rights for 183 square feet that she got as the owner of 18,300 square feet of SEZ.land, as well as the potential to receive the three "bonus" Residential Development Rights. Even though her Residential Allocation had expired, said the Court, the agency maintained that if she applied for a new one, she undoubtedly would receive it. Suitum instead sued TRPA under Section 1983 of the Federal Civil Rights Act of 1871, claiming that its decision to deny her the'right to construct a house on her lot deprived her of" all reasonable and economically viable use" of her property and thus was a taking without JUSt compensation under the Fifth and Fourteenth amendments. TRP A responded that Suirum had not obtained a "final decision" on the amount of development that could be allowed by the TDR program. (An appraiser for the agency had valued Suitum's rights at from $30,000 to $35,000). Because she had failed to seek the agency's permission to sell her TDRs to other property owners and had instead sought compensation for a constitutional violation, TRPA maintained, the taking claim was not ripe for federal court review. Suitum responded that the TDR program was a "sham," and that there either was no market for TDRs or the procedure for transferring one particular right would restrict the opportunity to transfer a remaining right. The agency's argument prevailed in both U.S. District Court and the Ninth Circuit Court of Appeals, but didn't persuade the U.S. Supreme Court. Action on possible application by Suitum to transfer her TDRs was not the type of "final decision" that its previous decisions on this point of law required, said Justice David Souter, writing for the Court. Because both parties agreed to the type ofTDRs to which Suitum was entitled and because there was no further discretionary action by the agency concerning the application of the regulations to her lot (such as the determination of the use that would be permitted on the property or whether the lot was in fact in an SEZ), Suitum could bring her taking claim. She did not have to seek permission from the agency to transfer the TDRs before litigating. A concurring opinion by Justice Antonin Scalia (joined by Justices Sandra Day O'Connor and Clarence Thomas), who is known for his consistent rulings in favor of private property rights, pointed out that the availability ofTDRs has "nothing to do with the use or development of the land to which they are (by regulatory device) 'attached'." A TDR does not reduce the degree of a taking, he said. Rather, it is a "new right" that the landowner, whose right to use and develop his property has been "restri~~ed or extinguished," can employ to "extract money from others. Scalia characterized the "marketable TDR" as a "peculiar type of chit which enables a third parry not to get cash from the ~~~~~y~~ Justice Antonin Scalia characterized the "marketable TDR" as a "peculiar type of chit which enables a third party not to get cash from the government but to use his land in ways the government would not otherwise permit." 106'