Land Use Exactions, Takings and Impact Fees Peter M. Friedman Holland & Knight, LLP 2017 Municipal Attorneys Spring Seminar Illinois Municipal League Friday, March 31, 2017 DoubleTree Hotel, Bloomington, Illinois

Impact Fees/Exactions Distribute the costs of added infrastructure (and other improvements) more directly to the eventual beneficiaries Extract from Real Estate Developers the cost of public services (both direct and indirect) that result from land development

Governmental Exactions Land dedication Fee in Lieu Impact Fees / Linkage Fees

Takings (Per Se and Beyond) FIFTH AMENDMENT "NO PERSON SHALL... BE DEPRIVED OF LIFE, LIBERTY OR PROPERTY WITHOUT DUE PROCESS OF LAW; NOR SHALL PRIVATE PROPERTY BE TAKEN FOR PUBLIC USE WITHOUT JUST COMPENSATION.”

Regulatory Takings Pennsylvania Coal Co. v Mahon, 260 U.S. 393 (1922). The birth of regulatory takings. While property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking.

Takings physical taking Lucas-type “total deprivation” regulation Penn Central-style taking Land-use exaction that acts as a taking

Regulatory Takings Lingle v Chevron U.S.A. Inc, 544 U.S. 528 (2005)

Traditional (Per Se) Regulatory Takings A Government Taking can be found under these circumstances: 1. Where the regulation amounts to a permanent physical invasion Loretto v Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982)

Traditional (Per Se) Regulatory Takings 2. Where the regulation deprives the owner of "all economically beneficial use of her property“ Penn Central Transportation Co. v. City of New York, 438 U.S. 104 (1978) Yee v. City of Escondido, 503 U.S. 519 (1992) Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992) First English Evangelical Lutheran Church v County of Los Angeles, 482 U.S. 304 (1987)

Land Use Exaction Regulatory Takings land use exactions - building/development conditions Nollan & Dolan Shifting burdens and standards

NOLLAN v. CALIFORNIA COASTAL COMMISSION (1987) A governmental exaction or requirement amounting to a physical use of property must have an “essential nexus” to (or must be “substantially advanced by”) a legitimate state interest

Dolan v. City of Tigard, 512 U.S. 374 (1994)

Dolan Two pronged analysis What is the nature of the condition? Is there a legitimate public interest? Does the Nollan “essential nexus” exist? 2. If so: What is the “required degree of connection” between the exactions and the projected impact of the development?

Dolan “Rough Proportionality” Test City must make same sort of “individualized determination” that the required dedication is related (roughly proportional) to the impact of the proposed development

Coy Koontz, Jr. v St. Johns River Water Management District (No. 11-1477) (June 25, 2013) Permit Denial Non-property monetary exactions

Koontz Justice Alito: “Extortionate demands for property in the land use permitting context run afoul of the Takings Clause not because they take property but because they impermissibly burden the right not to have property taken without just compensation.”

Murr v. Wisconsin Penn Central Revisited The Denominator Question U.S. Supreme Court (Argued March 20, 2017) Penn Central Revisited The Denominator Question

The Plaintiffs

The House