Understanding Exactions and Recognizing Prohibited Governmental Exactions
Imagine that you are trying to develop a piece of vacant land into an apartment complex to meet the community's dire need for affordable, quality housing for teachers, first responders and our workforce.
July 10, 2019 at 10:27 AM
5 minute read
Imagine that you are trying to develop a piece of vacant land into an apartment complex to meet the community's dire need for affordable, quality housing for teachers, first responders and our workforce.
By the time the permits to begin construction are issued, you have already invested money in the property, hired engineers and architects, developed and revised site plans, met with county and city administrators, submitted applications and plans to manage storm water, performed traffic studies and ensured that there is capacity in the public schools to meet the number of new students this housing development is expected to generate.
You began in earnest, thinking that you could develop this property according to its highest and best use while meeting a vital community need for workforce housing.
You have sustained the public hearings where neighbors voice their opposition to your project, preferring to keep the status quo rather than seeing your vision and appreciating why your project is different.
From start to finish, it's taken you years to reach the many milestones needed to bring this project to fruition and get that site plan approved and building permit issued. You've invested way more than initially intended on professionals, attorneys, permit application fees, mitigation fees and impact fees.
You just want to get the building permit issued, begin construction, get the certificate of occupancy issued … and alas, begin renting out those apartments!
At this point, you are oh so close to reaching any one of these milestones. That's when this little thing known as the prohibited exaction creeps in, most often, before you even recognize it for what it is.
So what is a prohibited exaction? Florida law defines it as “any condition imposed by a governmental entity on a property owner's proposed use of real property that lacks an essential nexus to a legitimate public purpose and is not roughly proportionate to the impacts of the proposed use that the governmental entity seeks to avoid, minimize or mitigate.”
Not all exactions are bad or even prohibited. Cities and counties may use their home rule zoning and regulatory powers to regulate and control the impacts that development may cause. These come in the form of conditions or impact fees. We deal with exactions so frequently that they are a part of the development process. An approval may require the developer to build roads and drainage systems, make cash payments to the city or county, and dedicate a portion of the land for public uses like a park.
Sounds reasonable and fair enough, right?
Remember, you're so close—after so many years and so much capital invested—to getting your final approvals when the city or county proposes to issue the permit if you will just fund a half-million dollar study on citywide hurricane preparedness or climate change resiliency. Or contribute $750,000 toward the purchase of a new fire engine. Or dedicate three acres of the even-acre development site for use as a new, pet friendly water park.
If you decline, your permit will be denied. All of that time and money—and now more delays and plan revisions—begin adding up. You're racking up some serious monetary damages.
Florida Statute 70.45 recognizes that this scenario can and does happen, and state lawmakers passed a bill in 2015 to strengthen Florida's protection of private property rights by recognizing a legal cause of action and remedy to avoid the imposition of prohibited exactions.
This law should be familiar to every property owner and governmental planner and attorney alike. How we balance the government's home rule powers with the property owner's constitutional right to be free from unconstitutional demands that are akin to a taking of private property without just compensation.
If you reach this stage in the land use permitting process and remember this article, you may have a remedy in state law to continue with your project but challenge the imposition of a prohibited exaction by a government entity. Seek the counsel of a land use attorney to help you understand your rights and remedies under Florida Law.
Katie Edwards-Walpole and Keith Williams are attorneys at Saul Ewing Arnstein & Lehr. Edwards-Walpole is a former state representative who passed legislation in 2015 that strengthened the Bert J. Harris Jr. Private Property Rights Protection Act. Contact her [email protected]. Williams has extensive experience in property rights, eminent domain, land use, riparian rights and environmental matters in federal and state courts. Contact him at [email protected]
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