Governments cannot attach unreasonable conditions to permit requests.
The Unconstitutional Conditions doctrine (also called an exaction) has received a lot attention lately. This blog post explains the essential elements of the test as it relates to Canton Township’s tree ordinance. Recently, the Sixth Circuit Court of Appeals addressed the same doctrine as it related to a Tennessee ordinance that required developers to install sidewalks. This is important in Michigan. The Sixth Circuit includes Tennessee, Ohio, Kentucky, and Michigan, meaning that opinions that it issues are binding upon issues arising in Michigan even if the opinion arose from a lawsuit in the other three states.
Generally, the Unconstitutional Conditions doctrine applies a balancing test to ordinances that require property owners to perform acts or make payments in order to obtain a permit. Essentially, a condition is constitutional if it is proportionate to the impacts caused by a particular project. For example, an ordinance requiring installation of a new turn lane may be reasonable if a development on a corner is expected to draw increased traffic and snarl traffic. The doctrine has evolved in the United States Supreme Court. In one case, a municipality “approved [a building] permit on the condition that the [property owners] grant the public an easement to travel across their beach, which sat between two nearby public beaches.” This was deemed unconstitutional because there was no relationship between building on the property and granting the public a beachwalking easement. In the next major case, the Supreme Court held that requiring a property owner to give it land for public greenspace was unconstitutional because it was disproportionate to the impact of increasing the size of a store.
In the new Sixth Circuit case, Knight v Nashville demanded that the property owner convey an easement to build a sidewalk and either construct it or pay into a fund to build a sidewalk elsewhere in the city. This was a taking.
This case is important because it narrows some procedural maneuvering by the City. The City sought to impose an ordinance, which is a legislative function. The prior cases arose during the administrative process of reviewing permit applications. The Court ruled that the Unconstitutional Conditions “test applies just as much to legislatively compelled permit conditions as it does to administratively imposed one.”
This case has real implications in Michigan. Many municipalities demand dedications for sidewalks or future road right of way as a matter of course. For example, this is extremely common in Macomb County. Such actions run a real risk of violating private property rights.
Please feel free to contact me if you are facing takings or zoning issues.