John J. Costonis

Development Rights Transfer: An Exploratory Essay

Chicagos Old Stock Exchange Building, a 13-story architectural landmark of international stature, was demolished in 1972 to make way for a pedestrian 45-story office tower on one of the Chicago Loops prime business locations. In Manhattan, the Tudor Parks, described by The New York Times as two quiet green islands, suspended above the compacted chaos of East 42nd Street in the privately-owned Tudor City development, are targeted as the site of luxury high-rise buildings. Puerto Ricos Phosphorescent Bay, a unique ecological resource whose waters explode at dusk with the luminescence of billions of tiny dinoflagellates, is threatened with imminent degradation by industrial development on the still virgin lands that encircle the Bay. These and countless other imperiled resources seem to have little in common at first glance. Some are man-made, others natures own. Their locations run from bustling downtown sites to once remote rain forests and nature preserves. They are cherished for purposes as diverse as landmark preservation, open space maintenance, and protection of the natural environment. Each is vulnerable, however, because it is a low density resource situated where the marketplace demands a high density use. This clash between resource protection and the development juggernaut defines the contours of a national land use dilemma. The recurring failure of conventional land use practice2 to accommodate these warring forces has resulted in demands for reform that, all too often, are nurtured more by apocalyptic rhetoric than by deliberate reflection. For most of this century constitutional jurisprudence exacerbated

Law and Aesthetics: A Critique and a Reformulation of the Dilemmas

Effort de determination de laire pertinente de regard du droit et de la politique culturelle sur le champ de lesthetique, notamment de la beaute visuelle (p. ex. lenvironnement).

Fair Compensation and the Accommodation Power: Antidotes for the Taking Impasse in Land Use Controversies

definition of its quiddities, but by what it enables government to do better than either of these other powers. From this perspective, I view it as a vehicle for fair compensation, and I advance it only because fair compenxad sation cannot find a predicate in either of the traditional powers, at least as conventionally understood. Were it otherwise, I would have been pleased to avoid the cutting edge of Occams Razor, which advises against needless mulxad tiplication of concepts, and to take the less exposed route of folding fair compensation into one of the existing powers. In fact, an argument can be made that it could find a home in the much enlarged police power of contemxad porary times. 3 Nonetheless, I have chosen t o use the accommodation power label because, in addition to my belief that it is conceptually necessary, it also dramatizes both the inadequacies of current police power/eminent domain doctrine and the fruitlessness of the debate now raging between police power enthusiasts and private market adherents over the future course of land use governance in America. By breaking the logjam stymying current doctrine and debate, the acxad commodation power opens the way to a land use system that can effect strinxad gent public governance where necessary while, at the same time, dealing equitably with those landowners who are sharply disadvantaged by that govxad ernance. My argument is developed in three sections. The first critiques the viewpoints of commentators who urge undue reliance respectively on either the police or the eminent domain power as the foundation of public land use governance. Extensive consideration is given to both schools in the convicxad tion that their all-or-nothing proclivities best illustrate the underlying tenxad sions that beset compensation jurisprudence today. The second details the unhappy consequences and multiple ironies of that jurisprudence. Singled out for special discussion is the evolution of eminent domain doctrines dexad fining the highest and best use standard as the polestar of just compensation. This development, though intended to protect private rights, has instead all but guaranteed governments recourse to the police power in situations where that powers use not only is unfair but tends overall to defeat the successful implementation of public governance schemes. The third section offers a functional analysis of fair compensation and its accommodation power predixad cate, addressing both the relationship between that power and the Reasonable Beneficial Use standard and the institutional a rrangements that its employxad ment requires. 3. See text accompanying notes 152-67, 175-85 infra. 1024 COLUMBIA LAW REVIEW [Vol. 75:1021 I. THE POLICE POWER ENTHUSIASTS AND THE PRIVATE MARKETEERS: A COMPARISON AND CRITIQUE A. The Police Power Enthusiasts4 . . . [A] regulation of the use of land, if reasonably related to a valid public purpose, can never constitute a taking.5 So write the authors of The Taking Issue in their common drive with other police power enthusiasts to be rid of the irritant of compensation which attends stern land use regulation. The assumption of these authors that any regulation stopping short of actual physical appropriation may be founded exclusively on the police power is a noble sentiment, superficially appealing at a time of widespread despair over the destructive legacy of ill-regulated private development. Regrettably, howxad ever, it pays little heed to the fairness or feasibility of achieving sound land management on a wholly uncompensated basis. The economic consequences of noncompensatory regulation are disdained as a matter of indifference6 or ignored altogether, thereby shunting aside considerations of fairness to private landowners who become forced contribxad utors to the common weal, and to government when its actions create windxad falls it cannot recover under existing practices. Positions assumed to be antixad thetical, moreover, often are not. We are told, for example, that belief in the continued vitality of compensation practice commits one to the myth that the taking clause protects this right of unrestricted land use regardless of its impact on society,7 or, what may be the same thing, to the view that ownership of property necessarily implies a government guarantee to profit from it when and as the owner in his sole discretion wishes . . . . 8 Their strawmanship9 only detracts from the commentators otherwise thoughtful appreciation of failing governmental leadership in land use affairs and of emerging attitudinal and doctrinal trends that promise to modify the nations long-standing bias unduly favoring private rights. Nor do they choose to address the repeated failure of police power-based 4. That less space is devoted in text to a critique of the police power enthusiasts position than to that of the private markete ers is not reflective of the writers assessment of the relative � . erits of the two positions. Instead, �t is explained by his earlier preparation of lengthy critiques of the former, see Costoms, Transferable Development Rights: Perspectii1cs for the Future at 57 passim (ASPO PAS Report No. 304 Mar. 1975): Costonis, Deve�opme11t Rights Transfer: 4n Exploratory Essay, 83 YALE L.J. 75, 82-85 (1973), as a gainst the absenc� of a� eqm yalently. con;ipreh�nsive critique by the writer or other commentators of the mcreasmgly mftuent1al v1ewpomt of the private markete ers in land use affairs. 5. _F. BosSELMAN, D. CALLIES & ]. BANTA, THE TAKING ISSUE 238 (1973) [hereinafter cited as TAKI NG]. 6. Sax, Takings, Private Property and Public Rights, 81 YALE L.J. 149, 172 (1971). 7. TAKI NG, supra note 5, at 2. 8. Sax, supra note 6, at 169. 9. There _is, of course. a ral?ge of positions intermediate between those of the police power enthusiasts and of the private marketeers. See generally text a ccompanying notes 125-30 infra; cf. text accompanying notes 211-29 infra. 1975] ACCOMMODATION POWER 1025 controls to tame discordant market forces. The sorry record of the last halfxad century is plain for those who care to read it . In mockery of well-intentioned police power programs, cherished landmarks fall, prime agricultural land and open space vanish, sprawl compounds, and comprehensive land use plans unxad ravel. Disregarded b y police power enthusiasts are stubborn political and administrative obstacles, frequently traceable to market forces, that cannot be dissipated by deft legal argument or by appeal to the intrinsic rightness of proper land management practice. Wishful thinking also seduces the enthusiasts into overreading land use portents. Much has been written in recent years, for example, about new · moods, quiet revolutions, and other myth-destroying trends that foretell better days ahead. Only the most obdurate cynic, of course, can doubt that American land use attitudes, institutions and practices are indeed i n ferment. But he might properly observe that while the conception of property rights nurtured by William Blackstone, Adam Smith and John Locke is now susxad pect, no firm consensus has yet crystallized to take its place. The zig-zag fortunes of innovative land use measures in such j urisdictions as New Y ork,10 Oregon,11 Vermont12 and Puerto Rico13 manifest that the pendulum has not and is not likely to swing over toward a consensus supporting noncompenxad satory regulation regardless of its economic impacts. Oregon Ex-Governor Tom McCall adverted to the self-defeating tensions that indiscriminate police power programs have g.enerated in these and other jurisdictions when he opined in 1974 that compensatory zoning was the nations next great landxad related issue.H Also regrettable is the penchant of these advocates for shoehorning the complexities of the compensation question into a single box and then resolving them by sweeping formulae. The Taking Issue quotation that opens this secxad tion affords one example. Professor Sax offers another in his proposition that the only appropriate question in determining whether or not compensation is due is whether an owner is being prohibited from making a use of his land 10. Compare Golden v. Planning Board, 30 N.Y.2d 359, 285 N.E.2d 291, 334 N.Y.S.2d 138 (1972) (sustaining restrictions on subdivision development for up to 18 years ) , witli Lutheran Church in America v. City of New York, 35 N.Y.2d 121, 316 N.E.2d 305, 359 N.Y.S.2d 7 (1974) ( invalidating landmark designation of the J.P. Morgan Mansion as a taking); Fred F. French Inv. Co. v. City of New York, 77 Misc. 2d 199, 352 N.Y.S.2d 762 (Sup. Ct. 1973) ( invalidating the Tudor Parks protective transferable development rights prog ram as a taking ) ; and Penn Central Trans. Co. v. City of New York, Index No. 14763/69 (Sup. Ct. N.Y. Cty. 1975) (invalidating landmark designation of Grand Central Terminal as a taking). 11. See Williams, Oregon: The Fight for Survival, SATURDAY REVIEW WoRLD 1, Nov. 16, 1974. 12. See Trillin, U.S. Journal: Vermont, Act 250 and Beyond, 50 NEW YORKER, Oct. 1974, at 128. 13. See J. CosTONIS & R. DE VoY, THE PuERTO Rico PLAN : ENVIRONMENTAL PROxad TECTION THROUGH DEVELOPMENT RIGHTS TRANSFER (Conservation Trust of Puerto Rico & Urban Land Institute 1975) [hereinafter cited as PUERTO Rico PLAN]. 14. Address by Tom McCall, Governor, State of Oregon, Middle Atlantic Regional Conference, Mar. 29, 1974, on file at the Columbia Law Review. 1026 COLUMBIA LAW REVIEW [Vol. 75 :1021 that has no conflict-creating spill-over effe cts.15 Despite the finality or elexad gance of these ukases, they are unlikely to ex orcise the taking demon. Against them must be posed Professor Philbricks sage observation that the concept of property never has been, is not, and never can be of definite content.16 Nowhere is this comment more vividly apt t han in land use law which is, above all, a law of contexts. Even Proscrustes, I suspect, would shrink from confronting with a single measuring rod areas a s diverse as gro

The Disparity Issue: A Context for the Grand Central Terminal Decision

Transferable development rights programs, while they represent an important new means of land use regulation, are of unsettled constitutional validity. The recent decision of the New York Court of Appeals in Penn Central Transportation Co. v. City of New York upheld such a program restricting the development of the Grand Central Terminal property and granting its private owner nondollar compensation in the form of transferable development rights. In this Comment, Professor Costonis focuses on the doctrinal significance of this decision in forging a middle way of land use reguilation between the paths of police power and eminent domain.

Narrative as Lawmaking: The Anti-Kelo Story

Abstract A mood of disquiet settled into the hearing chamber as the Louisiana House’s Civil Law Committee conducted its May 6, 2006, hearing on Senate Bill 859, which would eventually pass. The bill—the state’s response to Kelo v. City of New London creates amendments to the Louisiana Constitution to disable eminent domain as a tool for urban redevelopment; it disqualifies “economic development” as a public purpose. Facially, it bans transfer of the ownership or use of expropriated property to private entities for any purpose. It shrivels the universe of “blighted” parcels to those creating a “threat to health and safety caused by their existing use or disuse” and appears to restrict condemnation to only blighted parcels within a redevelopment area. As legislators in the reddest of the red states, the committee members were more than predisposed to approve SB 859. But their disquiet was tangible nonetheless because they remained stunned by the destruction visited on southern Louisiana by hurricanes Katrina and Rita several months earlier.