Chapter 10 - § 10.5 • CONSTITUTIONAL CHALLENGES TO HISTORIC PRESERVATION ORDINANCES

• Jurisdiction: Colorado

§ 10.5 • CONSTITUTIONAL CHALLENGES TO HISTORIC PRESERVATION ORDINANCES

§ 10.5.1—Challenges as a "Taking" of Private Property without Compensation

Historic preservation ordinances have been challenged as a taking of property without just compensation. Principles of regulatory takings law applicable to all forms of land use regulation, including historic preservation, are covered in Chapter 5, "Exactions, Dedications, Impact Fees, and Regulatory Takings." Generally, historic preservation ordinances raise one of two types of takings issues. First, such regulations may be challenged when a property owner is denied permission to change the exterior features of a building. A second type of challenge occurs when a historic commission denies a permit to build a new building, or prohibits the demolition of an existing building. Takings challenges based on refusals to allow changes to the exterior features of a building generally fail because the property owner is not denied "all reasonable economic use" of the property. Rather, the denial serves to prevent the introduction of a style incompatible with a unifying historic architectural theme, with little resulting economic harm to the owner.¹⁶

More involved takings problems arise, however, when municipalities refuse to allow property owners to demolish historic buildings so that the property owner may develop the site for a more economically viable use. In one such early historic district preservation case, the owner of a house in the Vieux Carre District of New Orleans sought a demolition permit to develop the site for a more intensive use.¹⁷ The architecture committee of the city denied the application, finding that the Victorian-era cottage in question had historical and architectural significance. The owner challenged the validity of the preservation ordinance as a taking of property without just compensation, and as an improper exercise of the city's police power. The court held that in order to be valid, a regulation must be substantially related to a legitimate public purpose, and the means used to carry out the purpose must be reasonable. The Fifth Circuit Court of Appeals held the Vieux Carre ordinance to be valid because it set out sufficient guidelines and did not delegate absolute authority to the architecture commission. In addition, the court, in applying traditional taking theory, found that the owners were not prohibited from other uses of the property, and had not shown that the refusal to allow demolition denied "all reasonable economic use" of the property. The court also rejected a facial takings attack on a provision of the ordinance that required reasonable maintenance and repair of buildings in the historic district. The fact that the owners were required to spend money to comply with the ordinance did not render the requirements invalid.

In contrast, however, a Missouri appellate court overturned a board of adjustment decision denying a property owner permission to demolish a substandard building in an historic district.¹⁸ The court found that, even considering the building's historic significance, restoration was not economically feasible. The court held that the effect of the demolition on the historic district was a "legitimate consideration" but could not be the "sole basis" for refusing to allow demolition and, in this case, did not warrant precluding the landowner's effective use of the property. Interestingly, however, upon remand, the Missouri trial court found that rehabilitation of the building would be economically feasible and again upheld the denial of demolition, and this time the appellate court upheld the trial court's decision.

In 1978, the U.S. Supreme Court for the first time considered the validity of an historic preservation ordinance.¹⁹ In Penn Central Transportation Co. v. City of New York,²⁰ Penn Central Transportation Company owned the Grand Central Terminal in New York, and sought to build a 55-story office building in the air space above the terminal. New York City had designated the terminal as an historic landmark as part of an overall historic preservation plan for the city. The city historic commission denied the building permit, and Penn Central sued, alleging that this action constituted an improper taking. The Supreme Court considered the ordinance much as it would consider any other zoning ordinance. The Court stated that a land use regulation that is reasonably related to the promotion of general welfare is not a taking, even if it results in a decrease in property values. The fact that some properties are burdened more than others as a result of the regulation does not invalidate the law, as this is common with land use regulations. The regulation cannot, however, deprive the property owner of "all reasonable use or return" on the entire property interest. If the regulation rises to this level, it would probably constitute a taking. The court found that Penn Central was not precluded from using the terminal in the way it was currently being used — as a train station — and that Penn Central could obtain a reasonable economic return on its investment while at the same time preserving the historic landmark.²¹

Many state and federal courts have followed the standards established in the Penn Central case. Historic preservation is viewed as a legitimate governmental objective within state and local government police powers, and as long as the standards used to evaluate the property for historic value are reasonable, and the economic burden is not too great, the regulations generally will not be considered a taking. These cases are consistent with the per se taking doctrine established in the U.S. Supreme Court's decision in Lucas v. South Carolina Coastal Council.²² In that case, the court declared that a taking occurs when a governmental restriction leaves a landowner without any economically beneficial or productive use of his or her property. Restrictions for purposes of historic preservation generally survive Lucas challenges if the permitted historic use has some economic value.²³ However, what an owner must prove to demonstrate a denial of economically beneficial use of an historic property seems to vary from case to case.

§ 10.5.2—Challenges as Being Void for Vagueness or as Unlawful Delegation of Power

Historic preservation regulations must include language that is sufficiently definite to identify the public purpose to be achieved, and the means to achieve it, so as to give adequate notice of the type of construction or demolition permitted and the parameters of the decision-making body's discretion. Similar to challenges concerning architectural design review regulations, a typical objection is that the aesthetic standards for granting approvals are too subjective to meet the requirements for a valid delegation of authority.²⁴ Regulatory language that may otherwise be viewed as overly subjective and unreasonably vague may be bolstered by the inclusion of objective criteria to be applied in specific review procedures. Such criteria may be used by the decision-making body, as well as potential applicants. The criteria can include such factors as architectural style, arrangement, texture, and material used on existing buildings or structures, as well as on the proposed structure, and the relationship to other structures in a designated area. Inclusion of photos and sketches in the regulations that illustrate the various factors can be useful. These objective and easily discernible factors assist by giving substance to more abstract terms and definitions that are often commonly associated with regulation of historical/architectural character.

The Colorado Supreme Court considered an ordinance from the Town of Georgetown that designated the entire town as an historic district.²⁵ In commenting on the town's regulations that...