19. Land Use Law and Property Rights

19. Land Use Law and Property Rights


I want to continue talking
about property rights today. And I’m going to also address
most of the lecture to the problem of takings and when the
government has the right to take private property for public
purposes and under what kinds of circumstances compensation is
required. You recall the Fifth Amendment
of the Constitution, that private property can’t be
taken without compensation if it’s going to be used for public
purposes. Before we get there,
I want you to think about the way that property rights are
fractured by law, but also by jurisdictional
boundaries. And I wanted to just spend a
moment to give you a sense of the kinds of problems that are
experienced out in Wyoming in the northwestern corner known as
the greater Yellowstone ecosystem.
And this is an extraordinary
area. It’s one of the last great
tracts of forest lands in the northern Rockies.
And it also is a habitat to a
variety of large mammals, many of which are either
threatened or rare or endangered.
And the jurisdictional
boundaries are really complicated and I think very
interesting. There are several national
parks: the Yellowstone National Park,
also the national forests, the Grand Teton National
Forest, several other national wildlife
refuges are also in this area. Several Native American
reservations are in this area as well.
And what you see on the right
hand side of this slide is just one example of one species of
wolves that cross these different boundaries.
So the purpose of this chart is
to give you a sense that there are a wide number of laws that
are at play that give implementation authority to
different agencies, such as the Forest Service,
the Bureau of Land Management, the National Park Service,
the Fish and Wildlife Service, and also complimentary state
agencies. And there are also a large set
of private landowners that own huge tracts of land.
So that it’s a mixture of
public and private rights that have a complexity that often
does not fare well for the natural resources in the area.
And the area is also rich in
natural gas as well as oil reserves that create some other
types of conflicts. So timber harvesting,
oil extraction, water rights,
all of these different resources need to be managed
very carefully. And the central problem
represented by this map is that certain kinds of resources,
such as wolves or grizzly bears or complexes of species,
transcend these jurisdictional boundaries.
And the Forest Service may have
a very different policy than the National Park Service in
determining how they’re managed. So the same species of unusual
timber might exist on Forest Service land,
and the Forest Service may be giving out leases to extract
those timber resources, whereas the Park Service would
not do so. And I mentioned the problem of
fire crossing these jurisdictional boundaries as
well, and having the Forest Service
have a policy of fire suppression,
as opposed to the Park Service’s policy of “let it
burn.” So that the fundamental problem
here is that these resources are spanning the jurisdictional
boundaries and there is inconsistency in the mission and
intent of these different agencies.
I want you also to think just a
moment about the grizzly bears. Grizzly bears are found in
Yellowstone. They’re found in Canada and
Alaska as well. But consider that this bear was
really a common property resource in legal terms.
It basically would cross from
one area to another. This bear would be protected if
it happened to be wandering through National Park lands.
But if it had wandered on
National Park lands say, up in Alaska that were also
Native American lands that had been dedicated by the Native
Claim Settlement Act that applies to Alaskan lands,
then this bear would be appropriable.
In other words,
Native Americans that lived in that area would have the right
to hunt this bear. So I mean, think also about the
idea of fish, in addition to mammals such as
this. They are public resources until
they’re killed. So if you get the right to go
hunting, once you kill the animal,
then it becomes your private property,
unless of course it’s a rare, threatened,
or endangered species. But even they may be
appropriable or shot or caught under some provisions of Native
populations’ rights. So also think about the way
that we allocate fishing rights. In class, I was asked in
section about the boundary that surrounds nations and where the
rights are to fish, and can a different country
come into the waters of the United States,
the jurisdictional boundary of the United States.
And we have a 200-mile limit as
do other nations within which we have the right to exclude other
parties or other groups from coming in and fishing for
valuable species. I also want you to think about
the Maine coast for a moment. This is an island.
I had an opportunity to become
a steward or a manager of a Nature Conservancy preserve when
I was a Ph.D. student here.
And I actually had writing
block, I was having a hard time writing my doctoral
dissertation. And I called a friend who I
knew was managing some lands for the Nature Conservancy,
and asked if they had a reserve that they needed help with for a
period of about six months. And I’ll never forget her.
She was delighted to offer me a
chance to sit on this island, which is about 250 acres,
it has a population of zero. So I would be the only person
there. And that was my house for six
months. I had a picnic table that
looked out over these waters. This little shed was right
about there, the picnic table sat right there.
And so I cranked– no
electricity, no running water, just a little outhouse,
and the only person on the island.
And I had a little Smith Corona
non-electric typewriter. So I cranked out 350 pages of
my Ph.D. sitting there looking out to
sea. It was really quite an
experience. But I also learned a lot about
property rights and how rights are allocated to fishermen on
the Maine Coast. And, you know,
lobster is a valuable resource. So how are fishermen allowed to
set traps? How is this regulated?
It turns out that it’s
regulated differently by different local governments,
and it’s regulated in a variety of ways.
Each of these different buoys
represented by the different colors you see here basically
are allocated to individuals. So a color is assigned to a
single individual. They have a legal right to fish
via a license that is provided by a local community.
And it’s a license that is not
gained easily. In most of these communities,
you are not allowed to get a license unless you’ve lived
there for a good part of your life or unless your parents or
grandparents have also fished in the area.
And they also regulate the
number of traps that are allowed to be put on a line.
So the deal is that you have a
buoy here, it’s tied by a rope to one of
these traps, and that is linked by rope to
another trap, and maybe nine, ten traps.
In times of lobster scarcity or
during certain seasons of the year, they may restrict the
number of traps. So you stuff the bait inside
the trap and then you throw it overboard, and you have a buoy
on either end. Well some lobstermen are
fishing without licenses. And it’s kind of curious that
the culture in Maine is extremely protective of property
rights. If you look out across the
water in the Maine area, you see the coastline literally
dotted by these different buoys. And it’s very common for one
boat to run over another boat’s line and basically cut the trap
from the buoy. That’s why they have two buoys
to protect against the loss, basically reduces the risk in
half. But what happened in the
instance that I’m going to tell you about when I was on the
island was that there was a newcomer,
a young guy about eighteen years old,
who wanted to set traps in this area that had been formerly
allocated to different members of the community.
He wasn’t from that town.
He was thought of as an
outsider. They saw the new colored buoys
and they decided that they would teach him a lesson.
So that first thing that they
did was they cut the line to one of the buoys.
And they cut it cleanly so he
would recognize that this was an intentional cut.
If a propeller runs over one of
these lines, it basically frays the end of it and it looks like
it’s not been cleanly cut. So he didn’t go away.
He came back, reset his traps.
And so they cut the second buoy
off in addition to the first buoy.
So he lost all of his traps.
Each one of these traps costs
about $200. So if you have five or six of
them, which he had, it’s not a minor investment.
So he came back.
The same color buoys popped up
in the area, a little bit further out to sea.
So they decided that they were
going to have to take further action.
One lobsterman pulled up and
pulled a gun out and shot over his bow, a warning shot over the
bow, but literally a shot over the bow.
And that didn’t seem to work
either. So one night they found where
he kept his boat in the evening, and they unscrewed one of his
sparkplugs from his engine and put the sparkplug inside his gas
tank. So he showed up the next
morning and turned over his engine and the boat was blown to
smithereens. Luckily, he was not seriously
injured. So that basically taught him
the lesson that this was not his territory and that he should
move on. But what’s curious about this
is that they have this belief in tradition,
this belief in custom, and belief that they had right
to fish in that area and no one else should come in this area.
And the local government
doesn’t have the capacity to monitor or police this,
nor does the state government or the Coast Guard or the
National Marine Fisheries Service,
so they take the law into their own hands.
So now, if you ever are around
a coastal area, including the Connecticut
coast, and you see these lobster buoys out there,
you’ll know that they are territorial boundaries that have
really important economic and legal significance.
Think about the case of
national forests. Every time I fly to California
and I look down at the Rocky Mountains,
I shake my head thinking that most of the lands that I’m
looking at that look like they’re denuded of forest are
national, public domain.
And they’ve been basically
denuded, and the soils have washed off the steeper parts,
such as this example on the Tongass National Forest in
Alaska. And they have no capacity to
regenerate. And this is because the Forest
Service gave out leases to timber companies to clear cut on
lands that really did not have the capacity to sustain that
form of timber harvesting. Clear cutting may be okay if
lands are flatter and you would not have this likelihood of loss
of soil and organic matter that literally prevents any form of
sustainable timber harvesting. So that hundreds of thousands
of acres in these steeper areas at higher elevations now are
incapable of supporting timber because of the pressure that’s
been put on the Forest Service to give out these property
rights in a sense, these timber harvesting rights.
I’d like to switch gears for a
moment, and I’m going to begin talking
about a number of cases that involve how we manage coastal
development and coastal resources.
And I’d like you to think for a
moment about the California coastline.
And this is being managed under
the California Coastal Act of 1976 that created the California
Coastal Commission. And what’s unusual about this,
and important, is that they basically took the
idea that’s invented in the Adirondack Park Agency Act,
the idea of zoning, restricting density,
of trying to cluster development in areas that have
existing services. And then take areas that were
undeveloped and apply rules that demanded very large acreages
before new development could occur.
So this area lies within
roughly about a quarter- to a half-mile of the California
coast. And it demands that the state
get involved in permitting, just the way that the state
gets involved in permitting new development up in the
Adirondacks. So that California is unusual
in its history of public ownership of much of the
coastline, either as state parks or county
parks, or in some instances,
such as the Point Reyes National Seashore that was
carved out from lands that I’ll speak about in just a moment.
So think about the diverse set
of tools. What strategies could you use
to manage coastal development? Well, the government might just
go in and buy up the land, exercise their right of eminent
domain. Take it out of the private
sector, bring it into the public domain, which they did at the
Point Reyes National Seashore. They also did this at the Cape
Code National Seashore, Fire Island National Seashore,
Assateague Island in Maryland, and also Padre Island in Texas.
So this idea of going in and
buying up private land in the coastal zone should have strong
interest to us here in New Haven,
given our proximity to Long Island Sound.
But if you put this idea of
protecting resources in the coastal zone in the context of
what we now know about climate change and the probability of
sea level rise and the increased frequency of storms that are
severe and increased severity of storms,
then you should begin to think about the degree of liability
that we face collectively as a nation,
about the intensity of development that we have allowed
in the coastal zone. So these coastal zone
management strategies bear a lot of attention.
They’re worth thinking about.
What works in protecting
critical resources? What doesn’t, and why?
And how property rights might
be allocated in different ways. And remember the idea that
rights are not unitary, they are a bundle.
They can be allocated a variety
of different ways. So that the Point Reyes
National Seashore that lies right next to the San Andreas
Fault is a wonderful area to go out and camp on,
hike on, bike on. But it also is a really
interesting example of this idea of buying up part of the bundle
of rights. So the Park Service went into
this area that was owned by farmers that had fairly large
tracts of land, some hundreds or thousands of
acres in size. But because of its proximity to
San Francisco, property values were increasing
quite rapidly during the 1960s and 1970s,
and there were a variety of different condominium
development plans that the Park Service began worrying about.
And this increase in
development pressure coincided with the Park Service’s intent
to create more recreational opportunities in coastal areas.
Why would they do that?
Well, in part because there
were not many National Parks in coastal areas,
but also in part because the U.S.
population is concentrated more
heavily in coastal areas than it is in the interior part of the
country. And they could expand their
political and thereby economic base of support if they located
them in areas such as Massachusetts or Texas or
California. So they would enjoy a larger
budget, they would have a more diverse set of supporters in
Congress. So in this case,
they bought up the development rights to these farms.
Some twenty different farmers
agreed to sell the land. And when the Park Service does
this, they may come in and offer you X amount of dollars for your
development rights. Or they may tell you that if
you don’t agree to this deal, then we’re going to exercise
eminent domain in full and we’re going to take over your lands.
So in this case,
all the farmers eventually agreed to sell the development
rights. In part, the idea was to
protect the open space agricultural character of the
area, which is really quite unique.
You see these rolling pastoral
landscapes, and if it were in the form of a
traditional National Park, where timber would not be
allowed to be harvested, no timber leasing,
no mineral extraction in National Parks,
no leasing of grazing rights, and no farming.
So that these restrictions
inside a National Park made this split of the bundle of rights
kind of an interesting strategy to maintain the pastoral
character of the area. I’d also like you to think
about a different kind of problem that we face with
respect to mining. And the Mining Law of 1872 was
quite curious and important in environmental history.
And it basically states that
all valuable minerals in and on lands belonging to the U.S.
are free and open to
exploration and purchase by U.S. citizens.
So that you could go out and
try to stake a claim to mine on public lands,
provided that they were not National Park lands or
designated Federal Wilderness lands,
and try to make your fortune. This was amended by the Mining
and Minerals Policy Act of 1970, and I’m not going to go through
all of this. But the intent and the purpose
was really to promote economic development on the public lands.
So if you think about the
public domain, many of you think of public
lands as being areas that the government is protecting and
managing for future generations. Well, most of the public lands
are thought of as economic development opportunities by
those that are responsible for their management.
Whether or not it’s mining,
whether or not it’s timber resources or grazing rights or
water resources, the public lands have long been
thought of as playing a critical role in the economic development
of the nation. This explains in part why the
underlying mineral rights or the oil and gas rights are separable
from the surface rights. And many people do not
understand this. So here’s an example of a
problem that we’re facing in the West right now.
They’re called coal bed methane
gas reserves. And from this hand-drawn map in
The High Country News, you can see that they’re
scattered from Arizona and New Mexico all the way up into
Montana and North Dakota. By the way, a plug for The
High Country News, one of Yale’s graduates,
Florence Williams, has been a reporter for The
High Country News, a Yale graduate back in I think
the early 1990s. But I commend that journal to
you if you’re interested in western environmental politics.
In this case,
what has happened is that those that own surface rights are
often not aware that the federal government has often sold off
the underlying oil and gas rights.
So that farmers are waking up
in the morning to notices that their lands are going to be
invaded by bulldozers, and roads are going to be
constructed to get mining equipment in that look like this
kind of a drilling rig. The technology is quite simple
actually. There are a variety of
different approaches to this. But basically,
the predominant method now used is that– forget about the
direction of these arrows for the moment.
If you want to extract the
methane gas out of a coal bed, and that gas sits in the
fissures, it’s often kept there by the water that’s also in
those interstices within the coal bed.
So one way of getting and
releasing the methane gas is to pump the water out of the area.
And the analogy that’s commonly
used is that it’s like opening a soda can, and you hear that pop.
So you release the pressure and
the gas comes up and is pumped into a storage area.
Well, what happens when you
pump a whole lot of water out of an area such as this?
And to give you an example of
the scale of this extraction operation in the West right now,
as of about five years ago, there were nearly 10,000 of
these extraction wells that were being actively used.
In Wyoming alone,
in the Powder River Basin especially, up near Sheridan.
And Ashley Roberts,
who graduated in the Environmental Studies major a
few years ago, wrote her senior essay on this
problem in Sheridan, Wyoming, and conducted her own
research that demonstrated that this groundwater extraction is
occurring at such an enormous rate that it’s causing a change
in the chemical composition and the biological diversity of this
region. So there are trillions of cubic
feet of natural gas beneath the surface here.
The scale of this operation is
really quite remarkable. And other firms,
looking at this diagram, now paying attention to the
arrows where the gas is being extracted this way.
The gas is being extracted in
this method by pumping CO_2 down into the
underlying coal bed. So this is thought of as a
win-win situation from a miner’s perspective in that
CO_2 is being injected and sequestered under this
hypothesis, while the natural gas is being
extracted. Here’s an example of one of the
unintended consequences from a rancher in southwestern Colorado
in La Plata County. “Well, in the late 1980s,
the kids started lighting the lemonade on fire,
so I knew something was going on.”
Why would the lemonade catch
fire? Well, it would catch fire
because the methane wasn’t completely extracted.
It would seep into the
groundwater resources, so that the lemonade had
methane that was flammable. Another example,
you may have read or seen the Horse Whisperer’s film or book.
So this is a story that has to
do with a Horse Whisperer’s complaint about coal bed methane
extraction on his property. The real Horse Whisperer,
the trainer, woke up one morning to
bulldozers carving a road across his property and he was
outraged. And he was one of the ranchers
that was not aware that the underlying mineral rights were
separable from the surface rights.
And he got his gun out and
thought that he could drive these people off the land.
And checking with authorities,
he found that they actually had purchased the lease to extract
the minerals from beneath the land.
So that he was basically left
with trying to figure out how he could minimize the damage.
So that he did not have a right
to stop them. They built the roads,
they built the wells, they extracted the gas.
The water that was pumped up
changed the chemical composition of water on his lands and in his
streams and drainage areas. And also the ditching and the
diking that was necessary to control the water made it
dangerous for him to run his cattle.
So a lot of the farmers are
experiencing a more dangerous situation to pursue their own
livelihood. So here’s another example of
what it looks like from the air now.
These patches,
this patchwork quilt of extraction sites.
So now tens of thousands of
things have been constructed across the western United
States. So one way to think about this
is to think about the law of nuisance,
an act, an object or practice that interferes with another’s
rights or interests by being offensive,
annoying, dangerous, obstructive,
or unhealthful. There’s a distinction between
what’s thought of as a public nuisance and a private nuisance.
So a public nuisance interferes
with the collective interest and criminal prosecution may be the
remedy. But a private nuisance may be
thought of as a tort or a civil wrong at any activity that
interferes with the enjoyment and use of one’s property,
i.e., the Horse Whisperer’s property.
And it may be the basis for
civil litigation. So the Horse Whisperer does
have, as would these other ranchers,
the opportunity to take the drilling company,
the gas company, the mining company to court.
But you know that form of
litigation often spans long periods of time.
So that to avoid litigation,
if you were the miner or the gas extractor,
what would you do? You would try to enter into
some sort of a legal agreement with each of the farmers that
you would pay them X amount of money if they would agree not to
litigate. So there’s a lot of legal
agreements that underlie these wells.
And another nuisance case from
the 1880s that has a bearing on this,
if land use is considered to be a nuisance,
it may be regulated without compensation.
Well, so that the damages in
this case might be regulated by a local government agency.
So local governments
traditionally have the role of adopting zoning and subdivision
regulations in a way that would control these kinds of
nuisances. So in one case,
this nuisance was defined by Mugler v.
Kansas, a Supreme Court
decision back in 1887, where the sale of alcoholic
beverages was believed to be a public nuisance and prevented by
regulation. And in this case,
compensation was not required. So not all rights to use the
land were removed, as the land could still be used
for other purposes. So the idea that government
could regulate land and not be required to compensate the
landowner, in this case,
the owner of the store that sold alcoholic beverages,
that’s an interesting idea. But the condition here is that
not all of the rights were removed and that he had other
opportunities to make economic use of that land.
So keep that in mind as you
think about takings law. Another famous case in takings
law history is Euclid v. Ambler.
The origin, this is a Supreme
Court decision from 1926 where a land use ordinance that
segregated residential and commercial districts was
challenged, its constitutionality was
challenged. And it was believed by private
interests that the restrictions on new development in each zone
was a taking because it removed the value of that property.
So if an individual was in a
residential zone and they wanted to build a store or a shopping
center or a casino, they would not be allowed to do
so. So that the authority of the
state or local governments acting on behalf of states to
restrict land use, to segregate land use,
to control density. This has been substantiated as
early as 1926. So the Supreme Court concluded
that state police power may be used to classify and regulate
land use to prevent nuisances. Another case that’s
interesting, and one that I’m sure all of you have been to,
is the case of Penn Central Transportation Company v.
The City of New York,
decided in 1978. So the question here surrounded
Grand Central Station. Now, Grand Central Station at
that time was managed by the Penn Central Transportation
Company. And the City of New York
decided that it wanted to designate Grand Central Station
as an historic landmark and thereby prohibit development
above the terminal. Now, would this constitute a
taking of property without compensation?
So here’s another kind of right.
So the right to subsurface
resources, such as oil and gas needs to be considered.
The right associated with
building on the surface needs to be considered.
But this is an argument about
air rights. So if you own the surface
rights, do you also own the air rights?
Or could the government come in
and restrict your ability to build to an infinite height?
Well, zoning ordinances
commonly have building height restrictions.
And in this case,
it was a bit unusual because the district that Grand Central
Station is in, I mean, you walk out and you
see the Yale Club. The Yale Club is just about as
high as Grand Central Station. But then look around you and
you see office buildings that are towering,
dozens and dozens of stories in height.
And in this case,
the Supreme Court affirmed that the restrictions imposed by the
New York City’s landmark preservation law on Penn
Central’s right to construct an office building above the
terminal do not constitute a taking of private property.
So that it upheld the
legitimacy of the designation of the site as an historic landmark
and the authority of New York to regulate air rights.
So one cannot presume that they
have a kind of infinite freedom to build to a greater height.
I want to bring another Supreme
Court case to your attention that’s curious.
This is Hawaii Housing
Authority v. Midkiff,
decided in 1984. Now, Hawaii is really an
unusual state. And prior to this time,
ninety-six percent of the state was owned by seventy-two land
owners or the state or the federal government.
Just think about that for a
moment. So ninety-six percent of the
state was owned by just a handful of landowners.
So that in 1967,
the Hawaii legislature approved the use of eminent domain to
condemn residential lots and sell land to existing tenants.
Now, if there are only
seventy-two landowners in Hawaii,
and I don’t know what the population of Hawaii was at that
time, but let’s just say for sake of
argument that it was a million people,
basically that meant that most of those people,
the overwhelming majority of them, would be forced into a
tenancy relationship with the landowner so that they would
have to enter into a lease agreement.
But the legislature said,
“Well we basically want to break up this oligopoly,
even if the landowners object. And we should have the right to
do that.” So they literally went in and
appropriated the land, but they compensated the
landowners, so that these seventy-two
landowners did receive compensation.
And then they sold the land
back to the existing tenants. So this is really a fairly
dramatic act on the part of any state government.
And it also raised questions
about the use of eminent domain. And the Supreme Court in this
case found that this was a legitimate use of the
constitutional right that the government has to exercise
eminent domain, and that it’s not a taking.
That the single most important
criterion to justify the use of eminent domain is the nature of
the public use. And a public use is created
even when immediately turned over to private hands.
And in this case,
the public use, or the key public interest,
was defined by the breakup of the land oligopoly.
Another take on what public use
is was decided just several years ago right here in
Connecticut, about forty miles away in New
London in a case known as Kilo v.
City of New London,
where the Supreme Court found that the use of eminent domain
in that case by the City of New London,
because it wanted to encourage redevelopment of an area that
was in private ownership, it decided that it would use
eminent domain and then it would sell the land back to a private
developer. So that as in the Hawaii case,
either the large landholding was broken up and then
redistributed to willing buyers. In this case,
the developer was already known to the City of New London,
so that the private rights were transferred first to the city
but then back to the private development organization.
And the court found that if an
economic project creates new jobs,
increases taxes or other city revenues and revitalizes a
depressed urban area, then that qualifies as a public
use and it’s a legitimate exercise of eminent domain and
does not require compensation. Now this was decried by many
who argued that the Supreme Court really had lost its
bearing. And this cartoon gives you a
sense of that. And this cartoon is the Supreme
Court sitting on its front steps with a wrecking ball sitting in
front of it with a caption, “Thanks to your ruling on
eminent domain, we can finally level this
building to make way for a Chuck-E Cheese.”
So that the decision about when
a taking has occurred is often dependent upon when a regulatory
action renders property to be valueless.
So I’ll take you back to the
Adirondacks for a moment and have you think about the way
that the Adirondack Park was regulated.
So rewind back to 1972,
before the Park Agency existed. Just assume that you had a
hundred acres of land and you had intended that you were going
to sell off one acre per year, and that was really going to
also provide retirement for you and your family.
In 1973, the state legislature
passes a law, and lo and behold,
you’re in the green area. So that means that you require
forty-two point three acres for a new building.
Now, shouldn’t that constitute
a taking? So that your expectation that
you could sell off a hundred lots under the old zoning
ordinance was being dashed, and now you could only sell off
two lots. Shouldn’t the government have
the obligation to compensate you for that loss in right and that
loss in value? Well, the Supreme Court has
argued across a wide diversity of cases that if you are left
with a property right that has some lingering remnant value,
then a taking has not occurred. This was established back in
1922 in a case that’s quite interesting, Pennsylvania
Coal Company v. Mahon.
A statute that prohibited the
mining of coal underground in a manner that causes subsidence of
homes on the surface went too far and did constitute a taking.
So imagine if a coal company
started digging under your family home and the extent of
the digging or the instability of the geology caused your land
surface to subside and cave in and harm your property,
does the government have the right to prohibit a mining
company from digging underground?
Well, in this case,
the court had argued that the prohibition of mining did
constitute a taking. Why?
Well, because the underlying
mineral rights became worthless. All the value was taken away
from the underlying mineral value.
Oliver Wendell Holmes wrote:
“While property may be regulated to a certain extent,
if regulation goes too far, it will be recognized as a
taking.” So the key question in most of
these regulatory cases is when has it gone too far?
I’ll give you another example
from the Adirondacks from a personal experience.
There was a developer that
wanted to build on a river area that was designated under the
New York State Scenic and Recreational Rivers Act.
And this developer wanted to
build about a hundred new units right along the river.
The Park Agency came along and
decided that it would damage the floodplain, it would cause
physical structures to sit in the floodplain.
The floodplain,
for those of you that don’t know the term,
is an area that’s designated by a boundary that sits at the
location and elevation of a probable one hundred year flood,
so that it’s probable that that intensity of storm will not
occur except once every hundred years.
By the way, New Haven and my
home experienced almost a hundred year storm just last
week. So all of the low-lying lands
were flooded in the area. Connecticut River is just
cresting now from a storm last week.
So that many people aren’t
aware of this hundred-year flood plain.
So in this case,
the decision was made not to allow the development in the
flood plain and basically to permit the land to be used for a
different kind of a purpose. In that particular instance,
it was a campground that was allowed.
So that the property owner went
to court and claimed that his property rights and his value
had been taken by the government and that he demanded
compensation. And in New York State,
the Supreme Court found that no, it was not taken.
In fact, he was left with a
perfectly viable economic use, which would be the continuance
of his campground. I’ll give you another example
here from a coastal area in California, Nolan v.
The California Coastal
Commission. Nolan had leased property
in Ventura, California. He leased it with the option to
buy, but it was conditioned on the replacement of a 500 square
foot bungalow. And it required a permit from
the agency I mentioned a few moments ago, the California
Coastal Commission. The Coastal Commission found
that the new house would block the ocean view,
contributing to the development of a wall of residential
structures that would prevent the public psychologically from
realizing a stretch of coastline that exists nearby that they
have every right to visit. So to give you some sense of
this case, here’s an aerial shot looking down at the Nolan
bungalow here. And you can see that all these
structures are actually sitting at the base of a cliff north of
Los Angeles. And like many of the California
coast area that is privately owned, you find these houses
separated only by several feet, these bungalows.
So what would be the effect of
Nolan building higher? Well, the California Coastal
Commission was concerned about the obstruction of the view from
the public. So in effect,
it was a question about psychological or visual access.
The court found that the new
house would increase private use of the shorefront and would
cumulatively burden the public’s ability to traverse to and along
the shorefront. So the Coastal Commission
granted a permit requiring a public access easement.
So this is kind of interesting.
So that the problem that they
found was blocked visual access, but the remedy that they
required was physical access. Now, you may not understand
that in California, physical access to the coastal
area is thought of as a very important public right.
So Nolan, the person who had
bought the option to buy, looked at the access condition
as a taking. He didn’t want to provide
access across his property for the public.
He didn’t want to worry about
the public traipsing over his land or concerns about security.
And the Supreme Court listened
to the case and it said that California wants an easement
across Nolan’s property, it must pay for it.
This constituted a taking
without compensation. And this is the definition of
what’s come to be known as the “nexus argument.”
So that the projected damage,
in this case, the lack of visual access from
a higher building, was being remedied by an
easement demand on the part of the state to provide public
access. So the court looked at that and
said, you know, there’s no real connection
between the remedy and the hypothetical damage.
So that in cases where there is
a damage that is being claimed by a private landowner,
this would demand that any successful attempt to seek
compensation look to this, the quality and the strength of
the nexus argument. I’m going to leave you with one
final case here. And this is the case of Florida.
And given my earlier comments
about climate change and the vulnerability of coastal
environments, I can think of almost no other
state in the Union that has more property value that is
susceptible to loss than the state of Florida.
And the state of Florida has a
very active beach renourishment program.
So in the face of storms and
hurricane damage, one of the responses is to–
I’m going to scoot ahead here. One of the responses is to park
barges offshore and pump sand from offshore areas onto the
beach. For those of you that are
interested in geology, there’s kind of a very
interesting science about grain size.
And they test very carefully
the grain size of the sands offshore,
and they know that some of the larger grains are more stable
than the smaller grains, so that they would be less
prone to erosion. So just think about what you’re
looking at here. This is sitting on a barrier
island. It’s a strip of land that
literally is no more than a quarter of a mile in width,
and behind it lies a bay. This is typical of barrier
islands in the United States. And in this case,
you probably have hundreds of millions of dollars of real
estate value that is highly vulnerable.
So that in the face of sea
level rise, we’re going to be basically looking at coastal
areas as those in the Netherlands have.
In other words,
thinking about how to keep the coast safe,
how to push back the water, how to reflect the wave energy
by building dikes or sea walls, or in this case,
beach nourishment. There’s another example of
buildings almost sitting in the water and the erosion that is
occurring following storms. So and here’s another example
of what the state of Florida is doing to build up that
beachfront. So just a quick version here.
In Walton County,
Florida wanted to renourish the shorefront with sand under the
provisions of Florida’s Beach and Shore Preservation Act that
was recently adopted. It fixed a boundary between the
publically owned land and privately owned land.
So that imagine that this is
your house, and imagine that you have a
thin strip of sand between your house and the ocean,
which is this open area in front of the stage here.
And then imagine that the state
wants– and you think of yourself as
being a shorefront owner and that the public has no right of
access across your area because the mean high watermark sits
down a ways from where you are. Now, supposing that the state
comes through and decides they want to nourish the beach.
They’re going to build up that
area. So that the state literally set
a boundary between the private land and the public land.
And the property owners,
the private property owners, argued that that was a taking.
That was a taking of their
property right to own shorefront,
because now there was private land up to the edge of the
stage, and then beyond that,
where the sand had been deposited,
that was a strip of public land that was open for public access.
So that these landowners wanted
exclusive right to control that area.
Well, they alleged that the
Florida Supreme Court violated the due process and takings
clauses by suddenly and unpredictably changing state
substantive law that deprived these owners of their private
property without compensation. And the Florida Supreme Court
ruled that beachfront property owners had no right to their
property to continue contact with the water,
nor any vested right of future breach accretion.
So the court argued that
basically they didn’t know what was going to happen in that area
that is now open water, that the private landowner
doesn’t have any right of expectation that their land
would just simply extend all the way down to the mean high
watermark if the state kept dumping sand in front of it.
So that this has become a very
popular case that’s pending before the Supreme Court now.
And it may be decided in the
next week or so. So it’s stop the beach
nourishment versus the county, and a coalition of twenty-six
states have supported amici briefs,
including the Obama Administration.
So that during the argument in
front of the Supreme Court, it was interesting,
because the Solicitor General that represents the United
States government in the Supreme Court made a case in favor of
the state’s rights to renourish the lands.
Every state in the country that
has coastal property has an interest in this because they do
not want to have to compensate private landowners for any
activity that they take to try to prevent additional property
damage. I’m going to zoom ahead here
and then we’ll conclude in just a minute.
But remember also that
pesticide regulation raises the questions of property rights and
takings. Because the government’s
required– in a case where the government
bans a chemical that is already licensed–
it’s required to purchase existing stocks of newly-banned
products. So that even though they find
that a chemical is more dangerous than they thought and
they had previously licensed it, if they’ve gotten new evidence
of risk and they take away the right to market that product,
the chemical companies can successfully argue and have
argued that that constitutes a taking that is compensable.
So there are 23,000 of these
registrations out there. I’m going to conclude with one
final thought, and that is that among all
these strategies that might be applied to protect public
resources and also to protect against private damage to the
environment, the use of regulation is an
extremely important opportunity for state and local governments.
So that if you apply a strict
standard against takings, in other words,
if you demand that taking of all property value be required
prior to the grant of compensation,
that offers the greatest opportunity for governments to
be effective in pursuing environmental agendas.
So we’ll come back and talk a
bit more at the end of the week about several alternative
strategies, particularly marketing of
ecosystem service payments. Thank you.

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