In Koontz v. St. Johns River Water Management, PLF won one of the most important property rights decisions in decades. As we have described in more detail elsewhere, the victory means that the government can no longer use the permitting process as an opportunity to shake down property owners for money, land, or other goods. The government may only demand payments that are roughly proportional and closely related to the negative impact that an applicant’s project will have on the community. In other words, the government is allowed to require a developer to “internalize the negative externalities of their conduct,” as the recent opinion in Koontz said.
Yet, some environmentalists have complained that Koontz will be the end of “sustainable development” because it stops the government from requiring that developers fund environmental pet projects that are disproportionately burdensome or unrelated to the developer’s actual impact. Alternatively, they argue that government will merely reject developments altogether, rather than risk making an unconstitutional extortionate demand in exchange for a permit. (Never mind that carte blanche rejection of all development would also run afoul of the Takings Clause). The same contingent made the same complaints after PLF’s Supreme Court victory in Nollan v. California Coastal Commission. Their concerns never materialized after Nollan, and aren’t likely to occur as a result of Koontz. The complaints are belied by the fact that many jurisdictions already had rules in place that limited government authority to exact money and other property from landowners. And none of those jurisdictions saw development grind to a halt, or the alternative wild-west all-holds-barred development.
However, these predictions do implicitly point to another important point: it is extremely difficult for the government to accurately predict the actual impact a development will have on others. Fortunately, there are other ways to protect those who are harmed by the negative externalities caused by a development. Reaffirming the property rights of those who are actually harmed by a development can protect the environment and those individuals who are actually hurt by a development. LearnLiberty.org has a helpful video explaining more about how private property rights can better measure and limit the harm caused by private actions.