SCOTUS: Hawaii Regs Diminish Private Property Values - How Much is Unconstitutional?

WASHIINGTON, DC: Did you know that your property rights can vary depending on the location of your property? Under the current interpretation of the 5th Amendment’s Takings Clause, a property owner’s right to obtain compensation for a taking depends on several arbitrary factors, such as the property’s location. Apparently, our constitutional right to just compensation for a government taking can also be limited if the land has “residual investment use” – i.e., if the land can be resold to recover some of the investment value.

Although a 100 percent regulatory “taking” of all value in a property constitutionally triggers “just compensation” by the government, it remains woefully unclear through three decades of cases how much less than 100 percent of value likewise triggers just compensation.

Southeastern Legal Foundation, along with the Cato Institute, Owners’ Counsel of America, the Land Use Research Foundation of Hawaii, and the NFIB Legal Center, joins the amicus of Pacific Legal Foundation in support of a husband and wife that have been denied their constitutional property rights simply because of the property’s location and purported “residual investment use.” (Douglas Leone, et. ux. v. Maui County, Hawaii, et. al.)

SLF does not believe that the only time a property owner has a constitutional right to just compensation is when the land is deprived of all value. The current vague judicial standard that the government does not have to compensate a property owner after regulating property simply because the owner could resell the property at a loss or make use of the property in ways not intended by the owner fails to fulfill the constitutional right to full "use and enjoyment" of private property.

The Hawaii state court found that the land had value because the landowners could either resell the land at a loss or build a concession stand on the property, which was consistent with the government’s purpose of the lot but inconsistent with the landowners’ intentions. The government intended to create a park by purchasing 9 lots. Because the government could only afford 2 lots, 7 lots were sold to private parties. Now, through regulation, the government wants to have its cake and eat it too – it wants to put the now private lot to government use without having to pay!

Click here for Supreme Court amicus brief

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