Regulation of Use of Vacant Wetlands Constituted a Regulatory Taking—Analytical Criteria Explained

The Second Department determined that the regulations imposed on vacant wetlands constituted a regulatory taking of the land and affirmed Supreme Court’s evaluation of the taking.  The court included an in-depth discussion of the analytical criteria:

In a condemnation proceeding, a property restricted by wetlands regulations is valued pursuant to the restrictions imposed by the wetlands regulations at the time of the taking, unless the claimant can demonstrate a reasonable probability that “a higher or more productive use of the property would have been available by reason of a legislative rezoning or a judicial declaration of invalidity of the use restriction” … . “A landowner who claims that land regulation has effected a taking of his [or her] property bears the heavy burden of overcoming the presumption of constitutionality that attaches to the regulation and of proving every element of his [or her] claim beyond a reasonable doubt” … .

Generally, while property may be regulated to a certain extent, if regulation goes too far, it will be recognized as a taking … . Analysis of whether nonpossessory governmental regulation of property has gone so far as to constitute a taking involves factual inquires in which three factors of particular significance have been identified: (1) “[t]he economic impact of the regulation on the claimant”; (2) “the extent to which the regulation has interfered with distinct investment-backed expectations”; and (3) “the character of the governmental action” … .

As to the first factor, “the property owner must show by dollars and cents’ evidence that under no use permitted by the regulation under attack would the properties be capable of producing a reasonable return; the economic value, or all but a bare residue of the economic value, of the parcels must have been destroyed by the regulations at issue” … . Accordingly, standing alone, a serious and significant diminution of property value will typically not be deemed to constitute a regulatory taking … . * * *

Although the claimants admit that, at trial, they did not set forth any evidence with respect to the second factor …, under the circumstances presented here, such an omission is not fatal to their claim, especially upon consideration of the third factor. Under the third factor, generally, a property owner “must establish that the regulation attacked so restricts his [or her] property that he [or she] is precluded from using it for any purpose for which it is reasonably adapted” … . Matter of New Cr Bluebelt, Phase 4, 2014 NY Slip OP 08029, 2nd Dept 11-19-14