Monday, August 12, 2013

Blog 4: US wetland, eminent domain and regulatory takings

A wetland on a property in the United States earmarked for a subdivision has been assessed as having previously unrecognised outstanding ecological values associated with indigenous plants and contribution to water quality. The developer is informed they cannot now drain the wetland, something they intended doing. As a developer, what argument would you mount under the broad concepts of eminent domain and regulatory takings to require compensation? As a planner, what issues would you take into account to decide on what is fair and reasonable compensation?


  1. As the developer of this swamp site i would argue that my property rights have been removed and that my potential to earn money off my property have been severely reduced. I would say that when i purchased the land i did so because as well as purchasing the physical land i was purchasing the ability to drain, subdivide and build on the land. However, now that the 'governing body' has removed that right that i paid for when purchasing the site i deserve to be compensated for their loss of both rights and potential income.

    As a planner, i would first have to see if the developer can prove that the draining of the wetland had been their intent at the time of purchase/before the new rule was passed. If they cannot prove that the draining of the wetland was their intention when they bought the property then they don't really have a leg to stand on. Secondly, they need to think about what type of precedent it would be setting if they compensated the developer and if the repercussions of that precedent would be workable for the 'governing body'

    ID: 1607922

  2. As a developer, I would likely take a ‘beneficiary pays’ approach to this issue. This captures the notion that an unregulated ability to use land decide is fundamental to private property ownership. From this viewpoint, the difference between transferring ownership or imposing regulations on land use would be immaterial. I should be compensated due to my reduction in ability to exploit the land’s resources for my own fiscal benefit.

    As a planner, I would refer to relevant statutory provisions to assess whether compensation was required (ie. In NZ, this would be s85 of the RMA). I would also consider whether regulatory chill could arise if compensation was made, as it could create barriers to imposing needed regulation on land use in the future.

    Reference: Bio-What? Preliminary Report of the Ministerial Advisory Committee, 2000

    ID: 1551226

  3. As a developer, I would argue that I require compensation because my property rights are infringed upon, and my ability to use or enjoy the land has been severely restricted. Furthermore, I would explain that the inability to drain the wetland undermines my prior investment in this property, and affects my potential derived income.

    As a planner, I would assess to what degree the developer’s inability to drain the wetland would affect his initial proposal and whether that proposal could be easily tweaked to fit the current circumstances. I would also look at how significant the wetland is in terms of the size of the property and its location within it – compensation would vary if the wetland was huge and right in the middle, as opposed to small and in a corner.

    Tianhang Liu

  4. As a developer I would argue that I am being unfairly burdened for something that is a public good which the public through taxes and not myself as an individual should pay for. Therefore I deserve compensation which amounts to the loss in land value that I have experienced as a result of not being allowed to drain the wetland.

    As a planner I would argue that the council already helps developers by paying for the construction and maintenance of the infrastructure required to service the development (such as roads, the three waters and parks). Therefore if developers want a regulatory compensation scheme then it is only fair that they pay for the full wider costs of their developments.

    Chris Groom (2988294)

  5. As a developer I would argue through the “beneficiary pays” principle, which both affirms that I my freedom to do as I please on my own land is the acceptable baseline of property ownership and use, and that any restrictions on the use of my property to the benefit of others should be compensated. I would demand compensation for now being allowed to develop my land.

    As a planner I would argue that regulation on the use of property does not equate to the physical taking of property, that profits not gained through restricted activities are merely an incidence of property ownership. I would reject the “beneficiary pays” principle as an unrealistic view of property rights.

    Tom Chi

  6. As a developer I would argue I am unable to exercise my full property rights associated with the land when I first brought it. As a direct result of the assessment, I am now unable to maximize the full economic potential of the land. This is a regulatory taking on the councils behalf effectively restricting my property rights, therefore I am due compensation.

    As a planner I would need to consider the economic impact of the regulation on the property owner and the extent to which it has interfered with the developer’s investment backed expectations. I need to consider what is fair and reasonable in this situation whilst ensuring that substantive due process is followed.

    Grace Wilson

    ID: 5798170

  7. As a developer, I would feel hard done by with the situation and expect compensation paid. I have made the purchase of the land with the intentions to develop, and to make a profit, however, I am no longer able to exercise my full rights and will fall short of the future economic gain I had expected, at the expense to benefit the public.

    As a planner, I would analyse the relevant legislation, and seek the provisions relevant for that state and consider the environmental requirements set by the federal government to assess what is fair, and whether compensation should occur or not and to what extent.

    I.D 5695331