The National Association of REALTORS® (NAR) filed two “friend of the court” briefs in support of property owners facing unconstitutional violations of the Fifth Amendment in cases pending before the Supreme Court.
In the first case, a homeowner paid thousands of dollars for a mandatory fee to obtain a land-use permit. The homeowner paid the fee for the permit even though it would go toward a purpose unrelated to the planned development, which may artificially increase the cost of real estate and impose costly, burdensome requirements on property owners. In the second case, residential properties were damaged by government action, and the homeowners lacked any legal avenue to seek compensation for that damage, impacting 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.
In Sheetz v. County of El Dorado, California, a property owner applied for a building permit to construct a single-family residence on his property, and the county required a land-use exaction of over $23,000 in exchange for the building permit to finance county road improvements. The homeowner paid the fee and challenged the exaction as unconstitutional under the Takings Clause and the unconstitutional conditions doctrine. The two challenges 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.
NAR’s amicus brief urged 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.
In Devillier v. Texas, a Texas highway project caused widespread flooding. Still, property owners were unable to bring 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. Therefore, the property owners sued the state directly, arguing the Takings Clause is applied to the states via the Fourteenth Amendment.
The U.S. Court of Appeals for the Fifth Circuit held in favor of the state. The court found that 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” and does not provide a private right of action against a state. The Supreme Court will determine whether a person whose property is taken without compensation may directly seek redress under the Takings Clause of the Fifth Amendment. NAR filed the amicus brief with the American Property Owners Alliance and the Texas REALTORS®.
The Supreme Court will hold oral arguments in January for these cases, with decisions expected by the end of June. Follow NAR’s engagement on these issues and more at nar.realtor.
