The facts of the case are straightforward, as we explain in our brief:
The North Carolina Department of Transportation (DOT) created
“transportation corridors” on private land pursuant to the state’s Map Act. Within these corridors, “no building permits shall be issued for any building or structure or part thereof . . . nor shall approval of a subdivision . . . be granted.” N.C. Gen. Stat. §§ 136-44.50 to 136-44.54 (2013). There is no time limit on the resulting, de facto moratoria imposed in the designated transportation corridors and, as a result, the DOT has been able to freeze large tracts of land for years without condemning them or paying compensation to their owners.
All told, the government of North Carolina thought it could freeze about 4500 different properties, with a value of around $600 million dollars, indefinitely, and then decide when to build its highway through those properties sometime in the next—wait for it—sixty years (according to a state planner). Meanwhile, the state would buy the properties frozen by the Map Act and its transportation corridors, at its convenience and on its own time-table. PLF and CLF argue in the brief that the impact on the use and value of the owners’ property amounts to an unconstitutional taking of that property.
The Fifth Amendment requires the government to compensate a property owner when it takes property from a private landowner. To get around the requirement of paying “just compensation,” government entities often get creative. One trick is to depress property values prior to taking the land by excessively regulating land or by announcing an intent to later build something that would discourage buyers and development. Sometimes this works, but fortunately it did not work today.
Today, a North Carolina appellate court held that the state transportation agency effected a taking when it tried to freeze or depress property values of land that it might later use for a road. To keep land prices from increasing while the agency was deciding whether to build the road, the agency also passed regulations that made it very difficult for landowners to develop the affected land. The agency did not put a time limit on its decision-making process or on the restrictions on the affected landowners.
The court saw through this charade and held that the agency’s action amounted to a taking without just compensation. The taking occurred when the agency imposed the restrictions and announced that it might later take the land. You can read the decision here.
Just so. Let’s hope the North Carolina Supreme Court likewise sees through the charade, and affirms the lower court’s decision.
*PLF thanks Elliot Engstrom of CLF for his contributions to the brief and for serving as local counsel in North Carolina.