Property rights, state police powers, and the takings clause: the evolution toward dysfunctional land-use management.

• Author: Pecorella, Robert F.

Introduction 59 I. Property and Economic Development as Cultural Norms: The Context of Land-Use Management in the United States 61 A. Land-Use Management: Three Approaches to Markets 64 B. The Libertarian Market Model of Land-Use "Management" 67 C. The Civic Republican Complementary Model of Land-Use Management 68 D. The Positive-State Model of Land-Use Management 69 II. American Land-Use Management in Practice 70 A. American Land-Use Management: A Civic Republican Emphasis 72 B. American Land-Use Management: A Libertarian Rebalance 77 III. Consequences of Civic Republican Land-Use Management and Libertarian Court Decisions 84 Conclusion 89 INTRODUCTION

By their very nature, land-use management plans are proactive exercises requiring public trust in both the capability of experts and the capacity of government to achieve a nonmarket-based version of the public good. In recent years, however, public trust in experts and in government has been in notably short supply in the United States. In some quarters, expertise is increasingly caricatured as elitism and the capacity of government has been more a punch line than a matter of belief among many Americans. Such negative attitudes have been fed by the popularization of a libertarian cultural message, (1) the influence of the increasingly powerful financial sector, (2) the political mobilization of the disaffected and alienated on the extremes of the Republican Party, (3) and the ascendance of right-wing media. (4)

In stark contrast to the popular attitudes outlined above, there have been increasing calls among academics and professional planners for sustainable development, a comprehensive form of land-use management, motivated by concerns about metropolitan sprawl and climate change. (5) Sustainable land-use development can be characterized as "a long term approach to decision making, a holistic outlook integrating various disciplines, interests, and analytical approaches" (6) to the way we envision, allocate, and ultimately use land. To promote sustainable development, a land-use management system must incorporate commitments to economic growth, intergenerational environmental consciousness, and social equity. (7) To realize these commitments, sustainable land-use management must take a long-term perspective; must rely on the assessments of planning professionals; and must include a wide variety of stakeholders in land-use decisions. (8)

This Article argues that both the underlying values and the political processes which define land-use management in the United States act as major impediments to any form of sustainable land-use development. More specifically, this Article contends that the accepted legal notions of private property in the United States, particularly real property, coupled with political decisions on governmental land-use regulation, push the land-use management system to emphasize individual market values, rather than the social implications of market transactions. In fact, neither the values nor the practices surrounding land-use management are necessary components of a free-market in real property.

Following a brief presentation of the philosophical and political bases underlying the centrality of private property rights in the United States, Part I of this Article distinguishes between and among three approaches to land-use management--libertarianism, civic republicanism, and the positive state model--that have emerged from within the political and cultural norms of American society. Part II analyzes the political forces that led to the dominance of the civic republican approach to land-use management in the wake of the 1926 Village of Euclid, Ohio v. Ambler Realty Co., ruling. (9) Part III explores the historical tension between private property rights and the state police power in American jurisprudence and argues that the 1992 decision in Lucas v. South Carolina Coastal Commission represented a decidedly libertarian legal rebalancing on this issue. (10) Part IV examines the environmental consequences of trends in American development.

1. PROPERTY AND ECONOMIC DEVELOPMENT AS CULTURAL NORMS: THE CONTEXT OF LAND-USE MANAGEMENT IN THE UNITED STATES

   Understanding the context around cultural notions of private property and economic development in the United States is essential to explaining the political constraints on land-use management. From the classical liberal perspective underlying the American experience, individual autonomy and therefore individual rights are inextricably connected to the rights of property. (11) The framers of the American Constitution certainly acknowledged the centrality of property to their undertaking. (12) During the debates at the Constitutional Convention, for example, Alexander Hamilton spoke to the symbiotic connection between liberty and property: "It was certainly true that nothing like an equality of property existed; that an inequality would exist as long as liberty existed, and that it would unavoidably result from that very liberty itself." (13) Echoing Hamilton, Madison in Federalist Number 10 characterized the new government's commitment to private property as primary: "The diversity in the faculties of men, from which the rights of private property originate, is not less an insuperable obstacle to a uniformity of interests. The protection of these faculties is the first object of government." (14) Private property rights represent more than a complement to individual rights; these rights are integral to, and even define, the classical liberal worldview. (15)

   Reflecting the cultural emphasis on private property, economic development in the United States is largely the province of the private sector. (16) The coupling of well-established private property rights with private-sector economic development reflects the libertarian perspective that free people operating in free markets will produce the greatest amount of total wealth in the most efficient manner possible. (17) From within this perspective, therefore, government efforts to direct or modify market forces obstruct the natural operations of market forces, decrease productive efficiency, and are socially injurious, at least in some usually undefined but often cited long run. (18) One consequence of this philosophy is that the federal government's role in economic development is designed to complement market forces entailing "transferring public monies and subsidies to corporations to make it profitable for them to do the work that the central government wanted done." (19) Government economic development initiatives support private sector growth by providing public goods such as basic research, infrastructure development, and public education as well as by incentivizing selected private market transactions, with policies such as the home mortgage interest deduction, the oil depletion allowance, and free trade agreements. (20)

   The market model of economic development sees economic growth as an unintended, but natural, consequence of the individual profit motives pursued in private transactions between and among property owners. Richard Epstein's characterization of property rights and contracts between and among private property owners as a "one-two punch that facilitates the economic growth that satisfies human wants" points to the symbiotic connection between such rights and economic development. (21) Adam Smith succinctly defines the causal connection between individual desires for profit and collective economic development as well as the maintenance of the larger social order when he writes: "The uniform, constant, and uninterrupted effort of every man to better his condition, the principle from which [public] and national, as well as private opulence is originally derived, is frequently powerful enough to maintain the natural progress of things toward improvement." (22) Therefore, to proponents of unfettered market processes, economic growth, and development emerge quite naturally from the liberal emphasis on individual property rights. (23)

   1. Land-Use Management: Three Approaches to Markets

      The general consensus that a system grounded in protection of private property rights fosters economic development does not mean that there is universal agreement on "the conditions under which individuals, households and communities can make productive use of their assets and appropriate their returns." (24) Indeed, reflecting other controversies surrounding the actual practice as opposed to the general philosophy of governance in the United States, there are three contrasting perspectives on land-use regulation--a libertarian view, a civic republican view, and a positive state model. (25) A libertarian perspective believes that a land-use policy guided by an emphasis on affording property owners the maximum possible autonomy in the use and transference of their real-property protects individual liberty, diminishes tendencies toward discrimination in the real estate market, and results in optimal social uses of real property. (26)

      A civic republican perspective broadens the implications of real property ownership to include "local communities" in a network of private property actors. (27) From this perspective, because land-use matters have social implications, they require regulation by local governments, as opposed to the laissez-faire market approach favored by libertarians. (28) Lastly, a positive state perspective broadens the nature and sweep of the concept of communities in its analysis of property rights. (29) From this perspective, because land-use matters have implications beyond the local communities within which they are housed, these policies need to be regulated by state or national governments, in the interest of a larger common good than that envisioned by civic republicans. (30) Table 1 distinguishes between libertarian, civic republican, and positive state approaches on a variety of social values and political strategies...