Eminent Domain Report

When a property owner commits to developing property in a certain manner, including providing a certain number of parking spaces, and the local government agency enforces the owner’s failure to comply, does the enforcement result in a taking? As expected, the answer is no -- there is no taking. This was the outcome of a recent court of appeal decision, 3558 Sagunto St. v. County of Santa Barbara (2020 Cal. App. Unpub. LEXIS 5328).

Background

In 3558 Sagunto St., a property owner owned two adjacent parcels, and submitted a development plan which designated a certain number of parking spaces that would be jointly utilized by the two properties as part of the development. The owner thereafter sold off the two parcels to separate buyers. One of the new owners installed “reserved” signs on the parking spaces on its property and blocked access to the “reserved” stalls (essentially preventing the new adjoining owner from using the parking stalls that were designated as joint parking under the development plan).

The county sent a notice of violation, stating that the blocking of the parking spaces violated the conditions of the development plan. The owner sued the county and adjacent property owner for a variety of causes of action, including inverse condemnation. The owner claimed that the county effectively approved an over-leasing -- or taking -- of its parking spaces by finding a violation of the development plan. The trial court found no taking, and the owner appealed.

Enforcement of Land Use Regulations Does Not Amount to a Taking

On appeal, the Court held that the County’s action does not constitute a “taking.” For a taking to occur, there must be “an invasion or an appropriation of some valuable property right which the landowner possesses and the invasion or appropriation must directly and specially affect the landowner to his injury.” In contrast, regulations regarding restrictions on the use of property in an exercise of the police power do not constitute a taking requiring the payment of just compensation.

The Court provided an example where a property owner built unpermitted structures on property designated as “open space,” and the local jurisdiction issued a notice of violation requiring the removal of all structures that were not permitted. There was no taking in that circumstance because the property owner never had a property right to develop the property in violation of the county’s land use requirements. The owner in 3558 Sagunto St. faced a similar problem: the owner never had the right to block access to the parking spaces in violation of the development plan, hence there could be no taking.

Conclusion

Government agencies have wide discretion under their police powers to enforce local land use regulations. While those regulations oftentimes diminish property values or restrict an owner’s available uses, absent unusual circumstances, they do not constitute a taking.