It’s one thing to see the value of real estate plummet when the economy tanks and no one is buying. But having value decline, or even disappear altogether, because state government enacted a new regulation rightly inspires outrage.
But allowing landowners to sue the state to recover value lost through regulations, as is proposed in LD 1810, sponsored by Rep. Andre Cushing, R-Hampden, is the wrong fix. Legislators sympathetic to such landowners instead should push for a better vetting process of regulations so such “takings” are few and far between.
In the abstract, a “taking” is tragic. Let’s say you’d purchased a piece of land years ago with the hopes of building a few houses on it to then sell. The proceeds would provide retirement income. But last year, the state changed a law so that now no house can be built on the land, perhaps because a greater setback from wetland requirement was adopted.
The problems, though, may be more hypothetical than real. In the mid-1990s, when another takings bill was considered by the Legislature, a study group examined the problem. In response, it created a state-run mediation program to consider waivers for those whose property was devalued by new regulations. It did not see a flood of requests, but rather something closer to a handful of cases.
A different flood would follow if LD 1810 wins passage: lawsuits. The cost of settling could be in the millions or tens of millions, believes Pete Didisheim, advocacy director for the Natural Resources Council of Maine.
Peter Mills, a Republican former legislator, headed up the study group examining the problem in the mid-1990s. He submitted written testimony on LD 1810 which encapsulates its flaws:
“No one seems able to draft a takings statute that makes sense,” Mr. Mills wrote. “That is not the fault of the drafters. It’s the impossibility of the undertaking.” He describes the process by which a property owner can easily make the case that a parcel has lost at least half its value — the threshold for recourse in the bill. The state then has 60 days to dispute that value, even though it has no access to the property.
A further problem, Mr. Mills argues, is that though the law directs that the entire parcel be taken into account, the owner could first split the land “in order to concentrate the impacts into affected parcels he creates.”
Then Mr. Mills hones in on the bill’s probable aim: “The primary impact — and its intended impact — is to stymie regulation for the benefit of large landowners with ample resources to paralyze state agencies. That is, in fact, how takings laws have been used in the few states that have enacted them. It’s not a statute for the little guy.”
Sixty years ago, Mr. Mills writes, “the rivers of Maine were open sewers.” The shorefront zoning and water quality laws enacted in the early 1970s in response initially hurt landowners. “Had a takings law been in effect, these laws … might never have been implemented,” he notes. And ironically, riverfront land “has increased in value beyond anyone’s imagination” because the water is clean.
Rep. Cushing, in explaining his reasons for proposing takings legislation, said he wanted “to put the Legislature on notice. When they enact a broad, sweeping law, they will have to consider the effect on property owners.”
That’s a legitimate concern, but a better way to address it is to maintain an open public hearing process on new laws and to limit rule-making by agencies that regulate land use.