Property Rights and Regulatory Takings
This page provides an overview of the federal and state constitutional doctrines known as regulatory takings and substantive due process and how they are used to evaluate regulations impacting private property in Washington State.
For key court decisions, see our page on Regulatory Takings Court Decisions.
Article 11, section 11 of the Washington State constitution grants cities and counties the police power authority to protect the public health, safety, and welfare. Pursuant to that authority, a city or county may regulate the use of property. They may regulate property for purposes such as abating nuisances, enforcing building and health codes, zoning and planning, and environmental protection. However, both federal and state courts have recognized that government regulation can go "too far" so as to have the same effect on a property owner as if the government had actually physically appropriated the land. The U.S. Supreme Court first recognized such regulatory takings in 1922. See Pennsylvania Coal Co. v. Mahon (1922).
Both the federal and Washington State constitutions provide that the government may not take private property unless it is for a public use and just compensation is paid. Just compensation is considered to be the fair market value of the property at the time of the taking. A government may "take" property in two basic ways:
- By physically appropriating the property, such as for a right-of-way.
- By regulating or limiting the use of property under the government's police power authority in such a way as to destroy one or more of the fundamental attributes of ownership (the right to possess, exclude others, and to dispose of property), deny all reasonable economic use of the property, or require the property owner to provide a public benefit rather than addressing some public impact caused by a proposed use.
When physically appropriating the property the government typically institutes eminent domain proceedings, also called condemnation. When adopting regulations, the affected property owner typically initiates a lawsuit to protest the effect of the regulations. A suit alleging a regulatory taking is also called an "inverse condemnation" action.
Property owners do not have a constitutional right to the most profitable use of their property. In a takings challenge to a regulation, courts generally do not require compensation when the regulation merely decreases property value or prevents property owners from doing exactly what they want with their property. As long as a regulation allows property to be put to productive economic use, the property has value, and the regulation will not be deemed to deny all reasonable economic use of the property; there is no regulatory taking in that situation.
Courts have also used a "substantive due process" test to analyze the burdens imposed by land use regulations. Both the federal and state constitutions provide due process protections through the Fourteenth Amendment and article 1, section 3 respectively. Substantive due process basically requires that there be a rational basis, which requires only that a challenged regulation be rationally related to a legitimate state interest. This is a standard that is deferential to local policymakers.
Yim I and Yim II
Note that there was significant confusion in Washington State about the appropriate tests to apply to determine whether there was a violation of the state and federal takings or substantive due process provisions with regard to regulations impacting private property. The Washington State Supreme Court clarified this question in its Yim I and Yim II decisions. In Yim I, plaintiffs challenged two new Seattle ordinances impacting a landlord’s ability to select and screen tenants on state constitutional grounds (see also the Yim II decision). The Court made clear that the federal analysis for both regulatory takings and substantive due process are to be applied to challenges under both the state and federal constitutions, and that there is no separate test for evaluating state constitutional claims. In doing so, the court expressly overruled several state court decisions that applied a more complicated analysis than federal law, and which appeared to impose a stricter standard of reviewing government regulations impacting private property than under federal law.
For a more detailed summary, see our blog post Yim I and Yim II Clarify Washington Regulatory Takings and Substantive Due Process Law.
So, under Washington law, a regulation may be challenged either as an unconstitutional taking or as a violation of substantive due process, or both. A regulation is a taking if it violates the constitutional requirement of compensation when private property is taken for a public use, while a substantive due process violation occurs when a regulation exceeds the constitutionally permissible scope of the police power. Unlike the remedy of compensation for a takings, the remedy for a substantive due process violation is invalidation of the regulation.
- U.S. Constitution Fifth Amendment - "[...] nor shall private property be taken for public use, without just compensation."
- U.S. Constitution Fourteenth Amendment - [...] nor shall any State deprive any person of life, liberty, or property, without due process of law..."
- Washington State Constitution Article I, section 16 - Eminent Domain
- Washington State Constitution Article I, section 3 - Personal Rights
- Ch. 8.08 RCW - Eminent domain by counties
- Ch. 8.12 RCW - Eminent domain by cities
- Ch. 8.25 RCW - Additional provisions applicable to eminent domain proceedings
- RCW 36.70A.020(6) - "Private property shall not be taken for public use without just compensation having been made. The property rights of landowners shall be protected from arbitrary and discriminatory actions."
- Regulatory Takings Court Decisions - Highlights key court decisions on regulatory takings from the U.S. Supreme Court, the Ninth Circuit Court of Appeals, the Washington State Supreme Court, and the Washington State Court of Appeals
- Eminent Domain - Provides an overview of the eminent domain laws that affect Washington State local governments.
Note that the below resources are older than 2019 and may include legal analysis that is based on case law developed before the Yim I and II decisions. Work with your agency attorney to determine the proper analysis to apply when evaluating existing or proposed regulations affecting private property.
- WA State Attorney General's Office: Advisory Memorandum - Avoiding Unconstitutional Takings of Private Property (2006) - Offers an in-depth review of takings principles, as well as recommending a process for evaluating proposed actions to avoid a takings. The City of Mukilteo created this DOE Warning Signals Checklist following the recommendations in this memorandum.
- Institute for Local Government: Property Rights and Land Use Regulation: A Primer for Public Agency Staff (2006) - Provides a legal overview of takings law, though with a focus on California, and provides a method to analyze and evaluate takings issues.
- WSAMA: The Koontz Case: Implications in Washington State (2013) and Koontz: What it said, what it didn’t say, and the implications for us in Washington State (2013)