In a landmark decision for land use and development, the United States Supreme Court has ruled under the Fifth Amendment of the U.S. Constitution that regulatory agencies cannot make “extortionate demands” on land-use permit applicants. In Koontz v. St. Johns River Water Management District, 517 U.S. __ (2013), the Court allowed a landowner to bring a claim for a Fifth Amendment takings, where the agency attempted to coerce him into providing what was considered excess or disproportionate mitigation as the “price” of getting land use approval.

Why Does This Decision Matter?

This decision is important because it signals that all government agencies—federal, state and local — will need to take greater care that the exactions and conditions they impose on permit applicants are fair and related to the purpose of the permit program. It also clarifies that an agency cannot deny a permit application because the applicant refuses to accept the agency’s unreasonable mitigation demands. Applicants can rely on the constitutional protections recognized by this decision as they negotiate their permit mitigation terms.

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