Regulatory Takings Due To Historic Designations

1507 words - 6 pages

Historical buildings are undeniably important to the United States and its people. The law of the National Historic Preservation Act of 1966, or NHPA, was enacted specifically to protect such buildings. Many citizens appreciate the value of these buildings and take strong stances for their preservation. Such citizens include those of California, which will be the state on that this paper will be focusing on. The issue at hand is who takes the side of the private owners of such buildings when their private property is at the mercy of special interest groups and judicial proceedings? Specifically, owners are at risk of holding an economically defunct asset due to the ambiguous rulings on the matter of designating buildings as historically significant. This paper proposes to rid of that ambiguity and recommends that the Constitution of California be amended to ensure that loss of economic use of real property due to historic designation constitutes a taking and requires just compensation.
The Current State of the Law
The section of the California Constitution being proposed for amendment is Article I, Section 19, which states: “Private property may be taken or damaged for public use only when just compensation, ascertained by jury unless waived, has first been paid to, or into the court for, the owner." This clause usually covers condemnation of real property, also known as eminent domain. Eminent domain is generally understood to provide for compensation if the claim is for public use. To take this one step further is the relevant topic of a regulatory taking. This results when the police power of the governing body is applies regulations that deprive all reasonable use of the private owner’s use of the land. To reiterate, this paper is advocating for the clear definition and application as a regulatory taking when a property is burdened with historical designation.

The Need for the Amendment
The law needs to be transparent because it has the potential to unreasonably burden the private owner of a historical building. There have been multiple cases in various states for which the results are unfavorable to the property owner. The most notorious case is Penn Central v. New York City. The U.S. Supreme Court ruling on this case is that if a property owner is left with somewhat of a means of return on investment, the designation as a historical landmark and the prevention of demolition does not qualify as a regulatory taking. The Court also depended on the notion that the preserving such historical landmarks constituted a public benefit. Based on this precedent, owners must bear the task of maintaining historical structures as the current use for the public benefit, while only “gaining” the reputation of historical designation.

To further exemplify this argument, another case that shows detriment towards the private historical property owner is United Artists Theatre Circuit v. City of Philadelphia. In the case, the Boyd Theater was declared a...

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