Takings Formalism and Regulatory Formulas: Exactions and the Consequences of Clarity

Abstract

A vocal minority of the U.S. Supreme Court recently announced its suspicion that lower courts and state and local administrative agencies are systematically ignoring constitutional rules intended to limit, through heightened judicial review, exactions as a land use regulatory tool. Exactions are the concessions local governments require of property owners as conditions for the issuance of the entitlements that enable the intensified use of real property. In two cases decided over the past two decades, Nollan v. California Coastal Commission (1987) and Dolan v. City of Tigard (1994), the Court has established under the Takings Clause a logic and metrics for constitutionally permissible exactions that requires concessions to have an essential nexus and be roughly proportional to the harms a proposed development is expected to cause. This Article argues that the Court's suspicions are well-founded, but that blame for judicial and administrative non-compliance lies with the Court's bifurcated approach to the Takings Clause. This approach, which the Court recently reaffirmed in Tahoe-Sierra Preservation Council v. Tahoe Regional Planning Agency, requires certain types of regulatory acts, including exactions, to be reviewed under a rule-formalist heightened scrutiny, while the majority of regulatory acts enjoy deferential treatment in an ad hoc balancing test. The Supreme Court's formalist efforts in Nollan and Dolan have failed to establish doctrinal clarity in, or regulatory control of, the dealmaking processes of local land use regulation. What the Article describes as the Court's takings formalism fails to constrain regulatory practices in its intended way, and results in constraints on the variable, locally situated, and intensely political context of local governance. These constraints, which include incentives for local governments to develop preconstituted regulatory formulas and disincentives against individualized, negotiated concessions, often promote neither the Court's preferred normative vision of strong property rights protection nor the Court's stated secondary concern for better, more efficient land use regulation. Most perniciously, the Court's limited doctrinal, normative, and utilitarian visions of takings law may block or even damage the essential political and social processes necessary to legitimate and functional local governance. At stake, ultimately, in Nollan and Dolan's failures is not only their unfortunate consequences for local land use regulation, but also the integrity and legitimacy of takings formalism and the wisdom of the Court's bifurcated approach to the Takings Clause.