Legal Features

Property Rights are Guaranteed but Not Absolute

By H. Clark Leming
From the Freelance Star

Search the Bill of Rights for a provision establishing your right to hold and convey property and you will not find it. Instead, the Bill of Rights - specifically, the Fifth Amendment - provides that the federal government cannot deprive a citizen of his property (or his life or liberty) without "due process of law."

The Fifth Amendment goes on to prohibit the taking of private property for public purpose "without just compensation." Later, the Fourteenth Amendment imposed the same prohibition on the individual states.

Thus, rather than establishing a fundamental right to own or control property, the Bill of Rights, and especially the Fifth Amendment, merely prevents the government from taking property except under limited circumstances.

So, what is "property" and how does one obtain property rights? Actual property rights are generally bestowed by common law or by state government, rather than by the federal Constitution. "Property" means an intentional right of domination lawfully obtained over a particular material or object with the unrestricted ability to use, enjoy and dispose of it.

Property comes in two basic forms: "intangible," such as trade secrets, intellectual creations and reputation - and "tangible," which refers to things permanent and fixed, such as lands, tenements and chattel.

Traditionally, a landowner held title to not only the actual soil but to everything attached to it - trees, vegetation, water, structures. Even the manure that fell upon the soil was considered part of the land.

The modern term "property rights" is shorthand for the assertion by a landowner of his ability to use his land in a manner unfettered by government. Property rights cover many sorts of individuals: a developer who wants to build a shopping center, a homeowner who seeks to add on a deck, a high-security operation that wants to establish an anti-terrorist training facility.

GOVERNMENT'S UPPER HAND

While this legal tradition is generally alive and well in America, in two important areas the government's interest legally outweighs individual property rights, namely confiscation - or taking - and land-use regulation. A fundamental principle established by the Fifth Amendment is that government cannot take private property without just compensation.

Most takings occur in the context of condemnation or the acquisition of private property by the government, usually for some form of infrastructure such as roads, utilities or public recreation - although the U.S. Supreme Court ruled recently that the government also can take property for private development, provided that a public purpose can be articulated.

Generally, the government's right to take property for a lawful public purpose is absolute. The only legal issue is the amount of payment due the property owner.

In recent years, a new form of taking has evolved - "regulatory taking," which occurs when government regulation deprives a landowner of his land's economic viability. Then, the courts have ruled, the owner must be fairly compensated, just as in a traditional condemnation.

Despite judicial concerns about regulatory takings, private property is subject to the government's proper exercise of its constitutional police power through zoning. Such regulation is not viewed as a taking and does not breach the constitutional prohibition against uncompensated takings so long as 1) a legitimate state interest is advanced; and 2) the landowner retains the ability to profit from his land.

The purpose of zoning is to strike a balance between a) broad community policy objectives - such as clean air and water, good schools, adequate infrastructure and recreation - and b) established private-property rights.

The ability to use property profitably and the "predictability" of property-development opportunities have major implications for the economy.

Often, citizens unfamiliar with the labyrinth of legal principles that limit government regulation are frustrated by local governments' inability to prevent growth and its unwelcome cousin, congestion. The appearance of inaction, however, is more related to the legal limits on zoning regulation than politicians' failures. Efforts by local government to control growth cannot so fundamentally alter property rights that the line is crossed between regulation and taking.

A PAIR OF HANDCUFFS

In many states, one or two important legal principles constrain local elected officials from curbing unwanted growth: "Dillon's Rule" and "vesting."

Dillon's Rule, based on a 19th-century treatise by Judge John F. Dillon of Iowa, limits the power of local governments to those granted by the state legislature. In many states, local government cannot, for example, simply decide to stop issuing building permits, charge builders for the financial impact new homes have on schools, or refuse to let new homes tie into utility services.

Meanwhile, vesting prevents a local government from amending old zoning approvals that may be outmoded. While such old zonings may fail to mandate necessary infrastructure or cash proffers to offset the present-day financial impact of development on a community, the owners of such properties are, even so, entitled to proceed with their development as originally approved.

The strong suit of local government is controlling, through zoning, the location and quality of certain kinds of development - even as market conditions dictate the basic demand for development. Compromise and cooperation between localities and property owners are the best ways to foster reasonable growth while providing necessary infrastructure.

Also, government's acquisition of property rights through direct payment - for example, in the form of conservation easements - and the authority to sell and transfer density may be other lawful means of balancing the needs of localities with established property rights.

A fuller appreciation for property rights guaranteed under the Fifth Amendment may help localities define their role in regulating land use and creating a better plan for responding to growth. In any case, property rights are here to stay.

Leming is a land-use attorney in Stafford County near Washington, D.C.