Government Need Not Satisfy Nexus and Proportionality Tests if Dedication Requirement Does Not Otherwise Constitute a Taking

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Landowners routinely have to give up something in return for a government agency’s granting a discretionary permit. However, there are limits, as the government agency cannot typically demand conditions that are not proportional or related to the impacts that would be created by the proposed project. These limits are referred to as the “nexus” and “rough proportionality” standards set forth in the well-known United States Supreme Court cases of Nollan v. California Coastal Commission (1987) 483 U.S. 825 and Dolan v. City of Tigard (1994) 512 U.S. 374.

In Powell v. County of Humboldt (January 16, 2014), the Court of Appeal held that before one even begins to analyze the nexus and proportionality standards, the condition being imposed must otherwise constitute an unlawful taking of property. In other words, if the dedication required would not constitute a taking if the government just “took” it from the owner outside the dedication context, Nollan and Dolan do not apply.

The Powells applied for a building permit for a covered porch and carport. Because their property was located near an airport, the property was situated within an “Airport Compatibility Zone,” requiring the Powells dedicate an overflight easement as a condition to the issuance of the permit. The Powells refused to execute the easement and filed a lawsuit, claiming the dedication constituted an unlawful taking since it was not related to the impact of the project, in violation of the nexus dedication standard set forth in Nollan.

Before determining whether the nexus and proportionality standards set forth in Nollan and Dolan apply, the Court examined the County’s overflight easement to determine whether it constituted a taking of the Powells’ property. The Court concluded that the easement did not completely deprive the Powells of all the beneficial use of their property or otherwise interfere with their investment-backed expectations. Thus, the Court was left with analyzing whether the overflight easement constituted a physical taking of property.

Under California law, a property’s ownership rights are subject to limitations when it comes to the use of airspace. (See Civ. Code, § 659.) Specifically, aircrafts are permitted to fly at altitudes of 1,000 feet over congested areas or over 500 feet in sparsely populated areas. (14 C.F.R. § 91.119(b), (c); Pub. Util. Code, § 21403, subd. (a).) And even flights within private airspace below the permitted altitudes may not constitute a taking unless they cause a measurable reduction in the property’s market value due to a substantial interference with the use and enjoyment of the property that is unique to the particular owner.

Based on this standard, the Court concluded that the County’s overflight easement did not constitute a physical taking of property since there was no evidence it would (i) permit flights within the Powells’ private airspace, (ii) substantially interfere with their use and enjoyment of the property, or (iii) cause a measurable reduction in their property’s value. As a result, the Powells were not entitled to compensation – regardless of the overflight easement’s relationship to the Powells’ porch and carport.