Knick v. Township of Scott - Real Estate ramifications in the long term

I'd been watching this case for a long time and the SC finally released their opinion today.

https://www.supremecourt.gov/opinions/18pdf/17-64…

What this case just cemented is the removal of a 1985 doctrine set by Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City. In the Williamson case, the supreme court created the "ripeness doctrine", which in essence meant a property owner must first exhaust state level remedies before they could make a federal takings claim.

To elaborate, the above is why you seldom see laws like rent control, inclusionary housing, and in lieu fees make their way to the federal courts. A prime example of this is the case of 616 Croft Ave., LLC v. City of West Hollywood.

Case background: West Hollywood's inclusionary housing policy states that a developer must include affordable units or pay an in-lieu fee as an alternative. The plaintiff in this case thought that was bullshit (justifiably, if you ask me) and filed suit alleging the policy violated the constitution's 5th amendment takings clause: "The Takings Clause of the United States Constitution provides that “private property [shall not] be taken for public use without just compensation."

616 Croft Ave, LLC filed this claim sometime in 2012.

Unfortunately, with the "ripeness doctrine" in effect this meant they had to go through the California court system first, before they could appeal to the federal judiciary. Naturally, the California courts didn't care about 616 Croft's claim and sided with West Hollywood every step of the way. Finally, four years later after going through the trial courts, appellate courts, and finally reaching the California supreme court thus exhausting all of their state remedies, the plaintiff's case was finally "ripe" enough for a federal ruling.

Unfortunately, the US supreme court decided not to hear the case, but nonetheless the above serves as an excellent example for how the "ripeness doctrine" created an exhausting, costly, and if you ask me an otherwise punishing process for any property owner attempting to find 5fth amendment relief. As you might imagine, there have been tons of other similar cases that ended up in litigation hell, stuck in the property owner's own state judiciary unable to make its way to federal courts.

This brings me back to Knick V. Township of Scott. The opinion released today wholly, and with prejudice I might add, removed the "ripeness doctrine". Using the West Hollywood case as an example, what this means is that if the plaintiff where to file the same suit today, they could avoid the 4-year process of exhausting their state remedies and go straight to federal judiciary from the start.

While nothing will change in the immediate I suspect, over the next 5-10 years I am absolutely positive we are going to see rent control, inclusionary housing, in-lieu fees, and hell even overly restrictive zoning regulations make their way directly to a conservatively packed supreme court bench.

 
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The issue is that precedent is on the side of zoning boards. Euclid long ago established that the state has a legitimate interest in regulating land use. Also, SCOTUS decided that rent control laws were Constitutional in times of housing shortage after WWII, and as long as owners receive a "reasonable" return, they don't qualify as a taking of property. Since owners clearly are still making reasonable returns, and zoning in general is a long-established use of municipal police powers, I don't see a major change coming.

I'm not sure what has changed that would cause even a conservative Court to throw away decades or even a century (in the case of Euclid) of precedent.

And just to be an inflammatory ass, I'll note the hypocrisy of conservatives immediately making "legislating from the bench" a priority once they have anything resembling a SCOTUS majority, let alone sticking to their guns on issues like allowing States to regulate themselves.

 

With the current supreme court's makeup, I don't think stare decisis is going to play much of a factor in their future opinions, even though the justices might lead you to believe otherwise.

For the most part, I agree with you, but I see this playing out the same way abortion did. Before Roe v Wade the supreme court really did not want to rule on abortion. In fact, they were pretty much okay with the states dealing with it, and they avoided it for quite a long time. It wasn't until Texas decided to over reach and criminalize it that they decided to finally intervene.

I see the same thing happening with property rights. Yes, the SC will stay away from rent control and land use for now, but city's like LA, San Fran, and West Hollywood have been REALLY pushing the boundaries in the last decade.

Eventually, just like with Roe v Wade, they’ll end up going too far for their own good (removing Costa Hawkins is my bet on that) which will lead the supreme court no choice but to intervene in a landmark property rights case. At least, that's my prediction.

 

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