• Paul Peter Nicolai

Three-year Reservation of Lots May be a Taking

Updated: Mar 28

A developer was required to reserve five building lots for potential municipal use for three years as a permit condition. A federal judge has ruled this was enough to allege an unconstitutional taking.

The developer had applied for the final approval of an 18-lot subdivision plan. The town conditioned approval with a requirement that the developer reserve two lots for potential future use as a public park and another three as potential future affordable housing sites. The town prohibited any work on the parcels while it decided whether to purchase them. The town argued that the restriction was valid because it was temporary.

Why This Is Important . . . Since Supreme Court decisions in 1987 and 1994, courts are starting to recognize a third category of unconstitutional taking: neither a physical taking nor a total regulatory taking but one based on land-use exactions. The takings in prior cases demanded that a developer dedicate a permanent property easement. This court joined others rejecting the argument that government action must be permanent to qualify as a taking, opening the door to broader property rights.

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