Eminent Domain Report

While there is a healthy debate over just how much the sea level will rise over the next 50 years, there is at least a general consensus that the sea level will rise.  What this means for those on the coast depends on the jurisdiction.  Some jurisdictions will attempt to armor the coast, protecting the structures that exist for as long as they can.  Others will pursue a policy of managed retreat, allowing the ocean to creep inward unabated.  In California, the Coastal Commission has expressed a preference for managed retreat.  However, because of the negative connotations associated with that particular phrase, the Commission will now often use the phrase "coastal resiliency."

What coastal resiliency generally means is that new private development is disfavored, and that if it is approved, the developer must agree as a condition of approval to waive the right to protect the new development from future sea level rise - for example, no sea wall to protect against bluff erosion.  Another condition that is becoming more common is the obligation to vacate the property when some amount of bluff erosion has occurred, or high-tide is within a certain distance from a structure. 

These conditions in essence limit what can be done with the property.  While property owners have historically pushed backed against such restrictions, filing takings challenges and achieving a modest amount of success, the courts as of late have been noticeably hesitant to find a taking.  In fact, over the past five years the courts in California have been utilizing a very deferential standard of review as opposed to the takings analysis established by the U.S. Supreme Court for exactions, which requires a showing of essential nexus and rough proportionality.  (See Nollan v. California Coastal Commission (1987) 483 U.S. 825; Dolan v. City of Tigard (1994) 512 U.S. 374.)  How you ask?

In 2015, the California Supreme Court held that San Jose’s inclusionary housing ordinance, which required that 15 percent of the for-sale units of a new development be sold to low or moderate income households, was merely establishing a land use restriction and not an exaction subject to the essential nexus and rough proportionality standard.  (Our discussion of California Building Industry Association v. City of San Jose is available here.)  As such, in order to be upheld, the City of San Jose merely had to demonstrate that the inclusionary housing ordinance was “reasonably related” to the City’s interest in promoting the health, safety, and welfare of the community.  A very deferential standard.  Not surprisingly, the California Supreme Court found that the inclusionary housing ordinance passed this test. 

In 2016, the California Court of Appeal, based on the City of San Jose decision, held that the City of West Hollywood’s affordable housing ordinance, which required a developer to pay more than $500,000 to build 11 condominiums, also did not amount to an exaction, and thus was only subject to the deferential “reasonably related” standard.  (See Rick Rayl’s discussion of 616 Craft Ave., LLC v. City of West Hollywood here.) 

Flash forward to November 30, 2020, and the California Court of Appeal has once again invoked City of San Jose to conclude that a permit condition – this one requiring a developer to maintain trees and vegetation on property in perpetuity – was not an exaction subject to the U.S. Supreme Court’s essential nexus and rough proportionality standard.  In Erickson v. County of Nevada, a property owner sought a permit to build a house and garage on their property.  Because of potential impacts to ridgeline views, the County prohibited the house and garage from exceeding a specified height limit, required existing native vegetation located south of the proposed structures to remain standing on the property, and required the property owners to agree in a recorded deed restriction that (i) trees in a designated area will not be thinned or removed unless a biologist concludes the tree is dead or dying or a fire district finds removal or thinning is necessary for fire safety purposes, and (ii) any dead or dying trees on the property that are removed will be replaced.  The property owner asserted that the vegetation and tree removal conditions amounted to an unconstitutional exaction due to their perpetual nature.  The Court of Appeal disagreed, finding that because none of the conditions interfered with the property owner’s exclusive possession of the property or required the conveyance of any part of the property, they did not amount to an exaction subject to the essential nexus and rough proportionality takings analysis.  

As noted above, the Coastal Commission is a fan of imposing restrictions on how property can be used and protected.  With a now well-developed line of cases concluding that similar restrictions on use are not subject to the U.S. Supreme Court’s essential nexus and rough proportionality standards, one can reasonably assume that the Commission will be further emboldened to invoke sea level rise as a basis for further restricting development in the coastal zone.