The municipality in Koontz conditioned the approval of a land-use permit on the payment of a fee, but the excaction was unlike typical taxes and fees, which the court affirmed were not takings, because it was tied to a specific property interest apart from the money itself. The Koontz court found a per se taking occurred because the monetary exaction required as a condition of the land-use permit approval did not satisfy the requirments of Nollan and Dolan, even though instead of granting the permit with a condition, the government instead denied the requested permit while also suggesting approval could be obtained if Koontz agreed to the exaction. Thus, while Koontz represented an expansion of the takings doctrine, Symes suggests that federal courts may be willing to stretch the doctrine even further, provoking renewed consideration of the interplay between federal constitutional supremacy, state police powers, and home rule authority.
The Sixth Circuit Court of Appeals had the opportunity to elaborate in F.P. Dev., LLC v. Charter Twp. Of Canton, 16 F.4th 198 (6th Cir. 2021). In that case, a municipal ordinance required that property owners obtain permission to remove trees on their own property (absent limited exceptions), and mandated removal mitigation of either the installation of trees elsewhere or payment into a town tree fund. The court discussed rough proportionality as a “required relationship” that need not be “exacting[,]” but cannot be merely “generalized.” Id. at 206 (quoting Dolan, 512 U.S. at 389–90). The municipality “must make some sort of individualized determination that the required dedication is related both in nature and extent to the impact of the proposed development.” Id. The Charter Township of Canton did nothing to demonstrate that F.P.’s tree clearing degraded the surrounding area, nor made individualized assessment of whether some other mitigation might in fact be more environmentally beneficial on the property. The court noted that “[a]ccording] to Canton’s own representaitve, F.P.’s removal of regulated trees triggers the mitigation requirements, regardless of the specific impact caused by their removal,” and determined Canton did not make the necessary individualized determination in holding Canton imposed an unconstitutional condition. Id. at 207.
However, governmental bodies can have fairly wide discretion to impose monetary fees, depending on how such fees are imposed. In Ballinger v. City of Oakland, 24 F.4th 1287, 2022 U.S. App. LEXIS 2862 (9th Cir. 2022), the Ninth Circuit Court of Appeals characterized municipally imposed tenant relocation fees (required from property owners who stopped renting their properties for good cause) as a “wealth-transfer” provision, but not an unconstitutional taking, exaction or seizure. “The Supreme Court ‘has consistently affirmed that States have broad power to regulate housing conditions in general and the landlord-tenant relationship in particular without paying compensation for all economic injuries that such regulation entails.’” Id. at *7. The Ninth Circuit determined that the provision constituted a fee, but distinguised the relocation costs from the fees in F.P. or Knight.
Rather, the court found that these relocation costs required by the City of Oakland did not constitute a taking because the city’s ordinance imposed a “general obligation to pay money and does not identify any specific fund of money[.]” Id. at *13. If money is “taken from known persons in the form of a specific, identified property interest to which those persons were already entitled” then it may constitute a taking. Id. at *14. Of course, the fees demanded in Ballinger were in a sense related to a piece of property, but no more so than are taxes or user fees, which are “not generally compensable under the Fifth Amendement because taxes and user fees are collected in exchange for government benefits to the payor.” Id.
Meanwhile, what might also be characterized as a “wealth transfer” was treated as an impermissible taking in Levin v. City & Cty. of S.F., 71 F. Supp. 3d 1072 (N.D. Cal. 2014). In Levin, a city ordinance required landlords who wanted to withdraw their “rent-controlled property from the rental market to pay a lump sum to displaced tenants.” Id. at 1074. The ordinance at issue “require[d] that property owners pay the greater of a relocation payment due under a 2005 Ordinance or the new, ‘enhanced’ amount: twenty-four times the difference between the units’ current monthly rate and an amount that purports to be the fair market value of a comparable unit in San Francisco, as calculated by a schedule developed by the Controller’s Office.” Id. The city argued that the payout amount satisfied the Nollan and Dolan requirements because “the property owner’s withdrawal of a unit from the housing market ‘causes’ the evicted tenant to be exposed to market rents.” Id. at 1086. The district court disagreed and concluded that “the Ordinance is a monetary exaction that ‘lack[s] an essential nexus and rough proportionality to the effects of the proposed new use of the specific property at issue.’” Id. at 1088–89 (quoting Koontz, 570 U.S. at 614).
This area of the law is complicated, to say the least. Symes is yet another in a long line of cases that are continually setting the ever-shifting contours of takings law—and it has not even been fully adjudicated; the Symes decision was rendered in response to a Federal Rules of Civil Procedure 12(b)(6) motion to dismiss. Even though zoning and land-use regulatory law are, generally, the creatures of state statute and local ordinance or bylaw, these decisions show that the Constitution nonetheless can and does matter in local permitting proceedings.
