Takings

Esthetic regulation of property may be a taking when not connected to historic preservation

/ Historic Preservation Law, Takings

The Fifth Circuit Court of Appeals held that esthetic regulation of the appearance of property may constitute a regulatory taking under the Fourteenth Amendment. Money v. City of San Marcos, 2025 WL 429980 (5th Cir. 2025). The façade of the home in an historic district had  the initial (a “Z”) of a prior owner who was associated with the Ku Klux Klan. The current owners wished to remove the emblem and sought permission to do so from the city’s historic commission. When the commission denied their request, they sued, claiming a taking of their property without just compensation. The home is in an historic district but the home itself is not designated as an historic home. The historic district regulations prohibit altering any visible portion of the property without consent of the historic commission, which it refused to give in this case. The homeowners argued that the ordinance requirement that …

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Impeding access to one’s land is a taking but changes in traffic patterns are not

/ Takings

The Indiana Supreme Court affirmed a well-established rule that, while it would a taking of property requiring compensation to block an owner’s established access to a public road, it is not a taking if a government entity alter roads or closes an intersection in ways that affect traffic patterns. That is so even if those changes in traffic patterns harm a business by reducing its customers. Indiana v. Franciscan Alliance, Inc., 245 N.E.3d 144 (Ind. 2024). The court reasoned that the owner has no property interest in traffic patterns while the owner does have an interest in using existing driveways and roads to get direct access the owner’s own land.

Police damage to house not compensable under the takings clause

/ Takings, Trespass

In an upsetting but not surprising decision, the Sixth Circuit has held that damage to property caused by police in the course of their duties, including finding and apprehending those who committed or are suspected of having committed a crime, is not compensable as a “taking” of property within the meaning of the Takings Clause of the US Constitution. Slaybaugh v. Rutherford Cnty., 2024 WL 4020769 (6th Cir. 2024). In this case, a mother and son were in her house and she could not convince him to give himself up to the police. She exited the home and they fired 35 tear gas cannisters into the home, causing $70,000 of damage to the house and the contents inside. The insurance company would not cover the loss because it was “self-inflicted” and the owner’s suit against the city failed because the longstanding rule is that the police cannot be hampered in …

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Denial of right to build a per se taking

/ Takings

The Nevada Supreme Court held that denial of a building permit was a categorical taking when the city did not provide the owner with any viable alternative ways to develop the land. City of Law Vegas v. 180 Land Co., LLC, 546 P.3d 1239 (Nev. 2024).

No regulatory taking when property is destroyed by police to apprehend a suspect

/ Takings

In a recurring, painful issue, the Fifth Circuit agreed with the majority approach in finding that it was not an unconstitutional taking of property to damage a landowner’s house when that was necessary to apprehend an armed criminal intent on shooting it out with the police. Baker v. City of McKinney, 84 F.4th 378 (5th Cir. 2023), reh’g denied, 93 F.4th 251 (5th Cir. 2024). This was an “active emergency” that made it “objectively necessary’ to damage or destroy the property to prevent imminent harm to persons. Public emergency allows the government to damage or destroy property without compensation. The Fifth Circuit justified the result as based on history and longstanding tradition, as well as precedent both before and after adoption of the Constitution.

Tax foreclosures violate the takings clause if they government entity retains proceeds beyond the unpaid taxes

/ Real Estate Transactions, Takings

In an important case, the Supreme Court held in Tyler v. Hennepin County, 143 S.Ct. 1369 (2023), that it violates the takings clause for a municipality to foreclose on property for nonpayment of property taxes and to retain the value of the property that exceeds the unpaid taxes (with costs). The purpose of a tax foreclosure is to pay off the taxes owed. The equity in the property beyond that belongs to the homeowner (and/or the lender). In one sense, the ruling is unexceptional and tracks the goals of tax foreclosure laws (and other foreclosure laws in general). In a different sense, the opinion goes beyond other cases that have been held to be takings and could have significant consequences for mortgage foreclosures that are effected through court proceedings (judicial foreclosures). Most foreclosures do not result in paying of fair market value for the property, thereby (in my view, improperly) shifting …

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Municipal prohibitions on short-term rental of property not a taking of property under the fourteenth amendment

/ Takings

Two federal courts have held that municipal ordinances that prohibit or regulate the ability of owners to rent their properties to short-term tenants did not unconstitutionally take the owners’ property rights without just compensation. Nekrilov v. City of Jersey City, 45 F.4th 662 (3d Cir. 2022); Hignell-Stark v. The City of New Orleans, 46 F.4th 317 (5th Cir. 2022)

Second Circuit upholds rent control against a takings challenge post-Cedar Point

/ Leaseholds, Takings

In one of the first important cases to gauge the consequences of the Supreme Court’s physical takings decision in Cedar Point Nursery, the Court of Appeals Second Circuit, in two linked cases has upheld recent amendments to New York City’s rent stabilization law against a claim that is a facially invalid violation of the takings clause applicable to the states through the fourteenth amendment. Community Housing Improvement Program v. City of New York, 2023 WL 1769666 (2d Cir. 2023); 74 Pinehurst LLC v. City of New York, 2023 WL 1769678 (2d Cir. 2023). The court ruled that the law, at least on its face, was neither a physical taking under the Loretto/Cedar Point line of cases nor a regulatory taking under the Penn Central line of cases. The physical taking claims were that the law (the New York City Rent Stabilization Law, as amended in 2019 in the Housing Stability and Tenant Protection Act …

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