(PSBJ – July 26 2013) Following the June 25 U.S. Supreme Court decision in Koontz v. St. Johns River Water Management District, local, state and federal governments must demonstrate a ‘nexus” and “rough proportionality” when requiring property owners to make payments in exchange for land-use permit approvals.
The Koontz ruling is especially significant for Washington state shoreline property owners because of a 2011 state Supreme Court decision that exempted conditions under a local government’s shoreline master program from meeting a similar standard in a state statute.
The Koontz decision fills the gap created in 2011 and has the potential to change how shoreline permits are issued in Washington State.
In the September of 2011, I contributed a piece to this paper titled “ Shoreline residents swamped by regulations.” In the piece, I provided an overview of how the Shoreline Management Act of 1971 requires cities and counties to work with the state Department of Ecology to develop shoreline master programs to regulate the use of shorelines within their boundaries. I also outlined how costly, complex regulations associated with some shoreline master programs place an undue burden on shoreline property owners and create a disincentive for them to go through the permitting process to make changes to their land. The effect of the 2011 decision was to open the door to potentially overreaching, if not well-intentioned, shoreline regulations. So in Washington state, the Koontz decision changes the legal landscape in particular for shoreline property owners.
In Koontz, the U.S. Supreme Court re-examined the applicability of its “nexus” and rough proportionality” test to situations where the government demands that a property owner spend money on infrastructure or mitigation to offset the impacts of development.
‘Mindful of the special vulnerability of land use permit applicants to extortionate demands for money, “ the Supreme Court removed any doubt that the constitutional protections for private “property” did not only apply to “real property.”
For the last 15 years or so, many government agencies and courts applied the “nexus/proportionality” test solely to conditions that required dedication of real property and not to monetary conditions or other types of required mitigation.
The Koontz ruling clarifies past rulings and makes clear that the two-part test applies whenever a government demands payment as a condition of approving a land use permit. Perhaps most important, Koontz places the burden on the government to demonstrate both the “nexus” and the “proportionality” of such conditions.
The Koontz ruling simplifies the inquiry and levels the playing field. Existing shoreline regulations may, for example, allow some local governments to condition approval of modest exterior renovations – like a deck expansions or dock construction – by requiring property owners to rip out existing landscaping, replant native species, post bonds to ensure the plants survive and prohibit recreation in the newly planted area. Such a scenario is essentially a de facto conservation easement. These types of requirements may not meet the ‘nexus/proportionality’ standard under Koontz, and the burden will now be on the local government to show they do if challenged.
On its face, the Koontz decision should help shoreline property owners and developers avoid what the U. S. Supreme Court called “extortionate demands” of local governments in the form or overreaching mitigation conditions.