On June 25, 2013, the US Supreme Court issued a decision clarifying the limitations the constitution places on the power of governments to exact concessions from property owners when issuing development permits. It confirmed that its prior holdings in Nollan v. California Coastal Comm’n and Dolan v. City of Tigard, which held that a government entity may not condition the approval of a land use permit on the owner’s relinquishment of a portion of his property unless there is a “nexus” and “rough proportionality” between the government’s demand and the effects of the proposed land use, also apply (i) where the government denies the permit and (ii) even when the government gives the property owner the option of making a monetary payment in lieu of the relinquishment of property. Koontz v. St. Johns River Management District, 570 U.S. __ (2013), No. 11-1447, 2013 WL _____ (US January 15, 2013). A significant win for property owners, the Court’s decision will require permitting authorities to be more measured in the restrictions they impose, including financial exactions, if their development permits — and decisions to deny development permits — are to survive constitutional scrutiny.

Background -

Petitioner owns a 14.9-acre tract of land in central Florida that is bisected by a drainage ditch and that is classified by the state as wetlands.3 He sought to develop the 3.7 acre northern portion of the tract to make it suitable for a building, and in 1994 applied to the local water management district for two permits necessary for construction on wetlands. As mitigation, Petitioner offered the District a conservation easement on the southern portion of the property. The District informed Petitioner that it would approve construction only if he agreed to one of two concessions: either reducing the size of his development to one acre and deeding a conservation easement to the District for the remaining 13.9 acres, or proceeding as planned with construction on 3.7 acres, but also agreeing to hire contractors to make improvements to District-owned lands several miles away...

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