1. Chapter 19 Constitutional Issues in Real Estate

2. Key Amendments 2 Fourth Amendment. Protects against unreasonable searches and seizures. Fifth Amendment. – Depriving people of property without due process – Taking property without just compensation Fourteenth Amendment – States may not deprive people of property without due process – Equal protection clause (e.g. prohibits states from passing racially discriminating real estate laws) – Shelley v. Kraemer, 334 US 1 (1948) Held void a private contract not to sell to “any person not of the Caucasian race” 5 th Amendment Excerpt “…nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation. 4 th Amendment The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.. 14 th Amendment Excerpt “…nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws”

3. Eminent Domain: Takings 5 th Amendment Proper purpose: public purpose – Economic development issues – Kelo case Taking or regulating Just compensation

4. Kelo v. City of New London (#1) 545 US 469 (2005), p. 538 City took property to give to a developer. 4 The house was moved to this location. Development larger for Pfizer and it pulled out in 2009 – pulling 1,400 jobs out of the area. Used as a dump after hurricane Irene.

5. Takings Clause 5 End of chapter Q 2:, p. 554: State takes property for an overpass to benefit a developer and it hurts other property owners. Portion of Revised MN law post Kelo

6. Other Constitutional Issues Zoning Annexation What is fair market value when project itself drives up cost? Consider 19.2, p. 543.

7. Nollan v. California Coastal Commission (#2) 483 US 825 (1987), p. 541 Nollan leased property with an option to buy conditioned on demolishing the bungalow. The California Coastal Commission denied the permit to build. – The house would block the ocean view – The house would inhibit the public psychologically from using the beach A taking? 7 The house was moved. Faria Park Nollan’s Land The Cove Park Proposed House E a s e m e nt m

8. Potomac Development v. DC The house was moved. DC told landowners that their property would be taken to build a bridge in 2006. The bridge was not built by 2009 and landlords sued for taking. Could not rent or improve the property. Value went up from $14 million to $20 million in those years because of the stadium.

9. Taylor v. Rancho Santa Barbara (#X) 206 F3d 932 (9 th Cir 2000), p. 545 (Age 55 restriction in mobile home park.) The house was moved. HOPA – Housing for Older People Act Taylor bought home at age 41 but only 55 year olds allowed. 80% occupied by someone over 55, Why 55? 100% for people over 62. Rationale Government interest in protecting housing for older people Safe, supportive environment Smaller Low cost land (no need for nearby schools/employment) Thinner walls/units closer together

10. Meyer v. Holley (#3) 537 US 280 (2003) Discrimination by agent – does that make the owner of the agency liable? Respondeat Superior. The house was moved.

11. Fair Housing Act Categories protected by the statute: – A handicap is a mental or physical impairment that limits one or more major life activities. – Impairments in sight, mobility, and hearing – Mental illness, heart disease, cancer, cerebral palsy, multiple sclerosis, diabetes, AIDS, HIV, and treatment for substance abuse – Not covered: smokers and current drug abusers

12. Fair Housing Act Exemptions – Owner – Religious organizations – Senior citizen age restrictions

13. Fair Housing Act Consider 19.3 a) “Spacious 1- & 2-bedroom apartments in quiet mature complex. No pets, please.” b) “2-person limit.” c) “Adults pref.” d) “No children.” e) “Mature Christian handyman wanted to share house.” f) “Ideal for professionals.” g) “Mature setting.” h) “Within walking distance.” i) “Handyman’s dream.” j) “No alcoholics.” k) “Female tenant wanted.” l) “Near church.” m) “Desirable neighborhood.” n) “Call Betsy.” o) “No pets.”

14. Fair Housing Act Prohibited Activities Steering Blockbusting Redlining (applies to lending, appraisal, and insurance as well)

15. Discrimination Consider 19.4. Denying Navajo land loans based on high default rates. The house was moved. End-of-Chapter 4, p. 557: Insurance denied because of high rates of vandalism, arson and theft in the neighborhood. Cincinnati Neighborhood End-of-Chapter Q7, : Property given “… so long as used for municipal parks…for whites only.”