On November 20, 2023, NAR filed amicus briefs with the Supreme Court of the United States in two different cases in support of property owners facing unconstitutional violations of the Takings Clause under the Fifth Amendment. Costly and burdensome requirements imposed on property owners, such as obtaining land-use permits as a condition of using or developing their property that may be unrelated to the externalities of the development, may artificially increase the cost of real estate. Damage resulting from government action, such as the imposition of highway barriers that cause flooding of properties, but the injury goes uncompensated, also impacts fundamental property rights and potential development opportunities. At a time when many buyers are struggling to afford or find properties, government action must create certainty and stability in the housing market to promote development, support homeownership, and protect private property rights, which is why NAR is engaged in these various challenges.
In Sheetz v. County of El Dorado, California, a property owner applied for a building permit to construct a single-family residence on property that he owns and the County required a land use exaction of over $23,000 in exchange for the building permit, which helped the County finance road improvements. The homeowner paid the fee and challenged the exaction as unconstitutional under the Takings Clause and the unconstitutional conditions doctrine which, as applied here, would prohibit the government from conditioning the approval of a land use permit on the owner’s conveyance of real property or money unless there is an essential nexus and rough proportionality between the government’s demand and the effects of the proposed land use. The Supreme Court agreed to hear the case and NAR submitted an amicus brief urging the Court to adopt a robust reading of the Fifth Amendment’s Takings Clause to protect private property rights from unjust government regulation. NAR was joined on the amicus brief by the American Property Owners Alliance, the REALTORS® Land Institute, the California Association of REALTORS®, and Californians for Homeownership. Oral arguments in the case will be in January, with a decision expected by the end of June.
In Devillier v. Texas, a Texas highway project caused widespread flooding, but individual property owners were foreclosed from bringing an unconstitutional takings lawsuit against the state for compensation for the damage caused. The Constitution’s Eleventh Amendment grants states immunity from federal lawsuits brought by its own citizens, so the property owners filed their case in Texas state court, where Texas waived its immunity by removing the case to federal court. Once in federal court, Texas argued the inverse condemnation lawsuit should be dismissed because takings claims under the Fifth Amendment as applied to the states through the Fourteenth Amendment can only be brought against a “person” (under 42 U.S.C. 1983), which does not include a state. The Supreme Court will determine whether a person whose property is taken without compensation may seek redress under the self-executing takings clause of the Fifth Amendment, even if the legislature has not affirmatively provided them with a cause of action. NAR filed an amicus brief in this case alongside the American Property Owners Alliance and the Texas REALTORS®. The Supreme Court will hold oral arguments in January and a decision expected by the end of June.