North Carolina finds taking of properties restricted from development because listed for highway takings

In Kirby v. N.C. Dep’t of Transp., 2016 WL 3221090 (N.C. 2016), the North Carolina Supreme Court held that the state took property without just compensation under the state constitution when it published maps showing where roads would be placed in the future and what properties would have to be taken to enable those roads to exist. The underlying statute imposes restrictions on properties identified on the officials maps as likely to be taken for road purposes. No owner is allowed to obtain a building permit or a subdivision approval, although owners can apply for hardship exceptions to the building permit limitation. On the other hand property tax relief is also provided to these owners. Publication of the map does not mean the property actually will be taken; the state Department of Transportation is not obligated to build or complete the highway project.

The Map Act could be justified as a legitimate regulation because it did not interfere with any existing use of the property but merely prohibited new construction. Nor did it impede sale or inheritance of the listed properties. Any future owner would be compensated with fair market value if the property were ever taken. There is always a period after a government entity begins considering taking property for public uses and the actual taking and owners are not generally entitled to extra compensation for lost property rights during this period when their existing uses continue unabated.

However, the court held that the Map Act did effect a taking without just compensation under the state constitution because the published maps were part of projects designed to take property for public purposes and because an “indefinite restraint on fundamental property rights is squarely outside the scope of the police power.” Id. at *5. Those restraints included limits on the owners’ “rights to improve, develop, and subdivide their property for an indefinite period of time.” Id.

How do the limitations on these owners differ from a law that downzones an area of town to restrict development beyond what is allowed in the neighboring zone? Perhaps the area under consideration is more limited and the owners are singled out in a way that is not typical of zoning law or it could be that the properties are under an imminent threat of being taken by the government rather than left in control of the owners.

See also: Takings