Ordinance Challenge

What is a regulatory taking?

A regulatory taking occurs when government regulation burdens private property so severely that the property is effectively taken from its owner, triggering the Fifth Amendment's just-compensation requirement — even without formal seizure.

The Fifth Amendment prohibits the government from taking private property for public use without just compensation. A regulatory taking applies the same constitutional protection where no physical seizure has occurred, but regulation has burdened the property to a constitutional degree.

The three-rule framework.

The Supreme Court has built three lines of analysis:

1. Loretto-line per se takings for permanent physical invasion, however minor.
2. Lucas-line per se takings when regulation deprives the owner of all economically beneficial use.
3. Penn Central balancing for everything else — weighing the regulation's economic impact, the interference with investment-backed expectations, and the character of the government action.

Where the doctrine has moved.

The 2024 Sheetz decision extended Nollan/Dolan scrutiny to legislatively-imposed exactions. Many flat-rate impact fees that previously avoided constitutional scrutiny are now vulnerable. The case law is moving in property owners' direction.

Remedies.

The remedy is just compensation under the Fifth Amendment. Federal claims now proceed directly in federal court without state-court detour (Knick v. Township of Scott, 2019). State-court alternatives remain available where strategic.

For more, see our Property Owner Constitutional Claims practice and the regulatory taking glossary entry.

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