1. introduction: the power of legislature to allocate wealth


) When government takes property, it does NOT have to pay for any value it has conferred on the property



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1) When government takes property, it does NOT have to pay for any value it has conferred on the property

    • If property is condemned and value of nearby property increases because of the taking, government will pay increase in value of nearby property if it is also condemned.

    • BUT, if the entire area is condemned but property taken piecemeal and the value of the property taken last has increased because of earlier takings, gov't does not have to pay for these increases (US v. Miller).

    • Line of distinction is when the gov't has made a "definitive commitment to the project."

    • Some investors may be treated unfairly if price goes up b/c of inflation and not because of taking. If increase is b/c of market, government will compensate. Government will not compensate if it caused increase. Let trial judge decide which was the cause (US v. Cors)

2) Government does not have to pay for possible use of property which would increase its value but pays for its value at time of taking.



    • Government also will not pay for increase in value of land that it would confer if it gave its permission to use it in a certain manner, e.g. hydroelectric plant (U.S. v. Twin City Power Co., see also US v. Fuller  Taylor Grazing Act)

3) Government must pay fair market value for property at time of "definitive commitment to the project."



    • If price of property goes down, government must still pay original price.

4) Improvements made to property by lessee are to be assessed at their value in place over their useful life w/out regard to the term of the lease (Almota Farmers Elevator Co.)



    • Compensate in Almota but not in Fuller because elevator company negotiates with railroad to give them a property right. Farmer cannot negotiate with government so not property right.

5) Defacto Taking



    • Government can defacto take land w/out actual taking (i.e. no court order) if the value of land decreases significantly b/c of government's "affirmative value-depressing acts."

    • Compensation will be based on value before this defacto taking.

    • MUST have substantial impairment of owner's right to use or enjoy property. (City of Buffalo v. J.W. Clement Co.)

    • BUT - Mere announcement or manifestation of intent to take is not a defacto taking. Reduction in property value in this case is just incidental to ownership.

6) No Lost Income



    • Government will compensate for fair value of land but not for lost income from investment.

    • e.g. City authorizes taking and company moves, but city does not actually take land until two years later. Government will pay fair market value of land but will not compensate for lost income (i.e. interest) during those two years that land was not used. But can still recover inflation in opposition to Miller. (City of Buffalo v. J.W. Clement Co.)

7) If no taking, no compensation



    • If government has only caused "blight," i.e. delay in taking has transformed area into undesirable area for residential or commercial purposes, and this blight has devalued property, gov't will not compensate.

    • Reduction in value incidental to ownership. See also #3. (Fisher v. City of Syracuse)

    • Nelson thinks this is wrong.


Cases

  • U.S. v. Miller (1943) – value of land should be measured at the time the government commits to the project, rather than the actual taking  this prevents landowner from getting enhancement value, and compels government to compensate even if property depreciates

  • U.S. v. Cors (1949) – Government condemns Cor's tugboat during WWII, Cors wants more money

        • It is not fair that the gov't be required to pay the enhanced price which its demand alone has created

  • U.S. v. Twin City Power Co. (1956) – Company buys land along banks of river to use the water for hydroelectric purposes. Government says that they want to use the water for same purpose and wants the company’s land

        • 5-4 majority says that they can’t have the value of the land with the water value added since the government owns the water and has control over it

        • government pays only for the land taken, and not for the rights which it would have had to grant anyway

  • U.S. v. Fuller (1973) – Where government grants grazing rights to landowners and then condemns land, should it compensate for the increased value of the land due to the grazing rights?

        • Government doesn't have to pay for the element of value based on the use of Fuller's fee lands in combination with the governments permit lands (under Talyor Grazing Act) = created no property rights

        • It’s not the location that gives the land its value, but instead the possible receipt of a government permit that increases the value

        • case similar to Twin City Power  what the government gives, the government may take without compensation

  • Almota Farmers Elevator & Warehouse Co. v. U.S. (1973) – Grain elevator company has 10 year lease for grain elevator owned by the railroad that it renews every time. Government takes by eminent domain and wants to pay only for the 7 ½ years remaining on lease

        • Court says elevator grain co. had reasonable expectation that the lease would have been renewed and he should be compensated for it = his property was worth more than just 7 ½ years of value

        • distinguish from Fuller = distinction is between value that the government has conferred in the past not connected to a specific project compared to value that is created from a current and specific project

  • City of Buffalo v. J.W. Clement Co. (1971) – P claims taking occurred as of the date he was told to move out, because he was not able to rent property in the time between the announcement and the actual taking

        • Court says a mere intention to condemn doesn't constitute sufficient dominion or control over the power of the landowner over his property to amount to a de facto taking

        • Nelson thinks decision is wrong = seems to be at odds with principle of compensating the condemnee for what they have lost

  • Fisher v. City of Syracuse (1974) – Syracuse is going to condemn property in slum/blighted area and redevelop it  the project is announced but nothing actually done on it but property values fall in the meantime

        • Not a de facto taking, as per Clement = condemnation blight here was a speculative risk of ownership.




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