Where Water Quality Rights and Property Rights collide

Dear FA Friends, Neighbors and Members,

Presently, there is a bit of a Battle Royale raging in the Statehouse and in our local cyberspace, regarding Water Quality Protection measures and their affect on the concept of Property Rights. Before the Lege right now, particularly the Senate in the form of SB1647, are bills that will work to increase our taxes, provide taxpayer funded profits to developers and diminish our quality of life immeasurably, if allowed to pass.

This effort to crush our towns’ and cities’ abilities to protect groundwater supplies is being funded, in particular, by the recently debunked group, The Texas Landowners Conservancy. This is the group that made last Sunday’s front page of the Stateman in an article that clearly pointed out their origins, their real estate backed funding and their misleading name, “Texas Landowners Conservancy,” established to create a land steward brand indentity that is actally in direct opposition to their stated purpose and goals, which are the eroding of local authority over their right to develop, pollute the watershed and/or protect it at our expense and to profit handsomely at the public trough. Basically, they opine that any law requiring them to develop at certain science based levels of impervious cover in order to sustain an aquifer or watershed safely is a “taking.” This new definition of “taking” flies in the face of all historic interpretation of the US Constitution’s Fifth Amendment no matter how hard they try to convince us otherwise. They are also working to create law that will not only disallow our healthy regulation of their affects on the watershed, but will also cause cities to pay them for developing at less than 45% impervious cover. Since many subdivisions are already done at around 25% for simple marketing reasons, this means developers will be paid by us to do what they planned already anyway. This, on top of the profits generated by their sales and on top of the infrastructure improvements and tax increases we will see for new roads and schools associated with their developments.

Former Ag commisioner, Susan Combs takes a fallacious stab at this new Fifth Amendament theory in the editorial below, which is followed by a remarkably cogent rebuttal by Gene Lowenthal, a large property owner and development investor in his own right, who lives along Hamilton Pool Road. In between Ms. Combs editorial and Gene’s rebuttal are some quoted case law opinions from the US Supreme Court regarding this very issue. They clearly illustrate how Susan Combs and others, such as Lanny Counts of the Dripping Springs P&Z, are working feverishly to mislead us or they simply misunderstand historic legal fact. These efforts are aimed specifically at two recent regulatory efforts in the area, as Ms. Combs alludes to. One is the effort to make the LCRA responsible for the results of their pipelines and the stakeholder driven Regional Water Quality Plan. Both of these efforts have been suggested, supported and spearheaded by The Friendship Alliance. Ironically, Ms. Combs even points out that Water Quality rules didn’t matter so much while they were in the jurisdiction of Austin, but that any attempt to spread these legitimate concepts elsehwhere in the state must be met head on and defeated. She also notes, somewhat misleadingly and most likely out of context, that the Texas Supreme Court pointed out that Austin Water Quality Regulations were responsible for a 90% reduction in the value of land. What she fails to point out is that there are also parcels whose value argaubly increased due to these very same kinds of protections.

Please read on and make up your own mind.

And then Call Senator Wentworth (463-0125) and get him to promise to vote against these bills that are against Water Quality protection and his own constituents’ greater interests.

Rob Baxter

The Legislature Must Reaffirm the Constitutional Right of Just Compensation for Landowners

By SUSAN COMBS

Embedded in the Fifth Amendment of the U.S. Constitution is a fundamental protection for American land and homeowners: private property cannot be taken for public use without just compensation. Public entities are entitled to take property when there is a demonstrable public good—examples include condemning property for use as road right-of-ways, new schools, flood control and the like. If private property is taken this way, the people who own the land are guaranteed a just compensation. In 1995, we passed SB 14 to accomplish that purpose.

As environmental regulations in some parts of our state have grown more stringent over the last two decades or so, the definition of what constitutes “takings” has blurred. We are now at a critical point where some types of environmental regulations are, in effect, takings, because they cause dramatic devaluation of private property. If such regulations are for the betterment of the general public, then the landowner who pays a dear price in loss of value should, under both our state and federal constitutions, be compensated fairly. Unfortunately, that is not the case in Austin.

In 1992, our Capital City’s electorate passed the Save Our Springs ordinance, a stringent anti-growth and land-use law labeled “water quality” protection. In addition, the city passed regulations over residents of the ETJ who couldn’t vote “for” or “against” the ordinance. Over the ensuing years, SOS, as it is widely known, has been used as a tool to prevent growth and devalue real property. SOS requires that many Austin-area developments not exceed 15 percent “impervious cover,” regardless of scientific evidence that clean-water standards can readily be met at higher percentages of build-out. SOS has been challenged all the way to the Texas Supreme Court, where it was ruled constitutional under Texas law. In that ruling in 1998, the Supreme Court noted that SOS was directly responsible for a 90 percent reduction in the value of land. By any reasonable person’s definition, that is a taking.

The bottom line: If it is constitutional for public entities such as the City of Austin to take private property for the public good, then the City of Austin should pay the landowners a fair price for that property. To no one’s surprise, the city is not rushing to write checks to anybody.

It was easy for the rest of Texas to ignore SOS—most of us thought it was just Austin being Austin and that this extraordinarily destructive law would never apply to the rest of Texas.

Well, take a deep breath Texas homeowners and landowners: SOS may be headed your way. There is a legislative effort underway which would extend SOS-type standards to a swath of Texas that encompasses 10 counties.

If a landowner decides to develop a piece of property, a river authority would have the authority to adopt impervious cover limitations on the land. Land that Texas families have been counting on to pay for their children’s college educations or for retirement will be devalued, virtually overnight.

Who will pay the landowners for this loss of value? A river authority? The counties where the farms and ranches are located? The sad truth is that no one is currently required to pay for this devalued land. The issue of paying landowners a fair price for “takings”—and of defining exactly what constitutes a taking—is front and center at the Legislature this session, as elected leaders debate a bill aimed at solving this problem. Our legislators have a chance to ensure that our right of just compensation is codified in Texas law. Sen. Todd Staples (R-Palestine) and Rep. Robby Cook (D-Eagle Lake) are both carrying legislation to clarify the definition of a taking and to ensure landowners are fairly compensated if their private property is taken by a public entity.

The Legislature has an opportunity to reaffirm a right we’ve all taken for granted: owning and enjoying private property. The time is now, and the stakes are great. Let’s preserve a value Texans hold dear: no taking of private property without just compensation.

The Hon. Susan Combs has served as the Commissioner of Agriculture for the State of Texas since 1999. She served two terms in the Texas House of Representatives and is a fourth-generation Texas rancher. She was the House author of the state’s private property rights legislation. EDITORS: For information on the bill, please contact Elizabeth Christian at echristian@echristianpr.com or call 512-472-9599. For comment from Commissioner Combs, please contact Allen Spelce at 512-475-1669.

FROM THE U.S. SUPREME COURT RECORD

DAVID H. LUCAS v. SOUTH CAROLINA COASTAL COUNCIL 505 U.S. 1003 (1992) U.S. SUPREME COURT Decided June 29, 1992

In this case, the opinion was written by arguably, the most conservative Supreme Court Justice of the last fifty years, Antonin Scalia. Justice Scalia delivered the opinion of the Court writing:

“The Fifth Amendment is violated when land-use regulation “does not substantially advance legitimate state interests or denies an owner economically viable use of his land….We think, in short, that there are good reasons for our frequently expressed belief that when the owner of real property has been called upon to sacrifice all economically beneficial uses in the name of the common good, that is, to leave his property economically idle, he has suffered a taking.”

Note that the majority determined that “all economically beneficial” value had to be taken from Mr. Lucas’s land before he was awarded a “taking.”

No one in Dripping Springs government or in the community is suggesting such, nor is this remotely happening to your land, or anyone’s land, for that matter.

In the same case, from Justice Blackmun, in the dissent, “Long ago it was recognized that all property in this country is held under the implied obligation that the owner’s use of it shall not be injurious to the community, and the Takings Clause did not transform that principle to one that requires compensation whenever the State asserts its power to enforce it.”

Another relevant case:

TAHOE-SIERRA PRESERVATION COUNCIL, INC., etal. v. TAHOE REGIONAL PLANNING AGENCY etal. Decided April 23, 2002

Justice Stevens delivered the opinion of the Court.

“The text of the Fifth Amendment itself provides a basis for drawing a distinction between physical takings and regulatory takings. Its plain language requires the payment of compensation whenever the government acquires private property for a public purpose, whether the acquisition is the result of a condemnation proceeding or a physical appropriation.

But the Constitution contains no comparable reference to regulations that prohibit a property owner from making certain uses of her private property.”

REBUTTAL FROM GENE LOWENTHAL

Susan Combs has written an inflammatory editorial on the collision between water quality protection and property rights, more specifically between impervious cover limits and the concept of “taking”. As an advocate for both water quality protection and property rights, I object to her inaccurate treatment of both topics.

Ms. Combs says that “SOS requires that many Austin-area developments not exceed 15 percent impervious cover regardless of scientific evidence that clean-water standards can readily be met at higher percentages of build-out”. On this matter she is dead wrong. I have spent the last 10 months as a member of the Stakeholder Committee for the Regional Water Quality Protection project, possibly the most comprehensive review of the available data, science and technology ever undertaken relative to protecting Barton Springs and the Edwards Aquifer watershed. The conclusion was abundantly clear: an impervious cover limit of 15% is an essential element of protecting the very sensitive recharge zone of the Edwards Aquifer. No amount of engineering can substitute for low impervious cover.

Ms. Combs is equally off the mark in the matter of property rights and especially takings. The U.S. Supreme Court has affirmed its interpretation of the 5th Amendment in multiple rulings.

A physical taking is an event in which a governmental entity literally takes property by condemnation, for instance to locate a school. The original owner of the property no longer owns it. The Fifth Amendment requires that the property owner be compensated for his or her loss.

Restrictions on land use or intensity of development, in contrast to physical takings, generally are not to be treated as takings, since ownership of the land does not change hands. However, in extreme cases where restrictive ordinances have the effect of rendering property worthless, the Court has deemed the action as equivalent to a physical taking for which compensation is justified.

The current debate centers on the cases where the effect of a restrictive ordinance falls short of being equivalent to a physical taking. If an ordinance restricts development rights but doesn’t extinguish them, should this be considered a taking? If an ordinance reduces the value of a piece of property but not make it essentially worthless, is this a taking? The Supreme Court said no, but many within the development community are pushing hard to broaden the definition of taking for their own benefit.

Ms. Combs writes “As environmental regulations in some parts of our state have grown more stringent over the last two decades or so, the definition of what constitutes takings has blurred”. What she is really saying is that developer interests are organizing to blur and broaden the definition of taking as a strategy to overturn environmental regulations. They want to convince us that water quality protection measures should somehow be construed as takings so they can be compensated by the public for not polluting water. Political activists serving development interests are seeking a new class of entitlements.

Today we have all kinds of rules that potentially affect property values. We have zoning ordinances. We have setback ordinances. We have regulations requiring that land be dedicated for on-site wastewater disposal. Subdivision ordinances may require that right-of-way be dedicated to insure safe entry and exit from a development. The list goes on. Neither the Supreme Court nor any reasonable person would consider these ordinances as takings (but I haven’t asked Ms. Combs). Why should regulations designed to protect water quality be different from these other rules designed to protect public health, public safety and community property values?

In the case of a physical taking it is relatively easy to determine how much the property owner should be compensated. This is a routine exercise. In the case of the more mushy definition of taking advocated by developer interests, the exercise is difficult at best, and subject to abuse. The abuse will take center stage if proposed legislation is passed.

What is particularly odious about House Bill 2833 and its companion Senate Bill 1647 is their treatment of impervious cover limits. If these bills become law, then any ordinance limiting impervious cover to a level below 45% will trigger takings. For instance, if I am required by a water quality ordinance to develop at 25% impervious cover or less, I can file a takings claim and get compensated by taxpayers.

The outlandish thing about HB 2833 is its underlying assumption that someone who is required to develop at an intensity below 45% impervious cover must therefore be damaged and must be entitled to compensation. The bill makes no distinction whatsoever between commercial property within a city center, suburban residential property, or country estates. It brainlessly assumes that the value any tract of land is linked to the right to develop at 45% impervious cover or greater. This is arbitrary and dangerous.

Outside of city limits there are very few residential subdivisions that even approach 45 % impervious cover. In my neighborhood near the town of Bee Cave the typical residential subdivision is 20% or less. The developers here weren’t forced to do this. They chose to because they were responding to consumer demand for such amenities as large lots, open spaces and green belts. They calculated that low-intensity development was the highest and best use of their property.

What HB 2833 will do is treat future developers of such upscale residential subdivisions as victims if they happen to be in a community that limits impervious cover. If they play their cards right, they will be entitled to substantial compensation from the government for simply doing what they were planning to do anyway – – design subdivisions that the market wants.

HB 2833 will either compromise water quality by making impervious cover limits economically unfeasible, or it will enable a bogus definition of taking that can be easily gamed by developers to get taxpayer subsidies, regardless of whether or not they are actually damaged. HB 2833 is a perfect example of poor public policy and a new public trough for special interests.

Last updated on Monday, May 16, 2005 by billc