Public Restrictions on Ownership Rights Chapter 4 1

Public Restrictions on Ownership Rights Chapter 4 1

Land Use Controls • Any legal restriction that controls how a parcel of land may be used – Public • zoning, subdivision regulations, building codes – Private • covenants, lease or deed restrictions

Four Basic Powers or Rights of Government Over Real Estate 1. Police power 2. Escheat 3. Taxation 4. Eminent domain Or PETE 3

Police Power • The right of government to regulate the activities of private persons in order to protect the health, safety and general welfare of the public • A way of controlling your land without purchasing it • Mugler v. Kansas 1887 (brewery) • Hadacheck v. Sebastian 1909 (bricks)

Zoning • The most popular exercise of Police Power to control landowners • Designed to protect health, safety and welfare of the public by separating incompatible land uses • Market zoning • Exclusionary zoning

Eminent Domain • The right of government to take private property for a valid public purpose upon payment of just compensation • 5 th amendment to US constitution – “No person shall be deprived of life, liberty or property without due process of law; nor shall private property be taken for public use without just compensation”

Condemnation • This is the procedure by which the right of eminent domain is enforced • Condemnation proceedings usually determine the amount of just compensation • Don’t confuse condemnation with eminent domain

Taxes (Property Taxes) • • Land taxes pre-date income taxes Land = wealth Land is hard to hide Property taxes fund schools, libraries, police & fire protection among others • Property taxes are a lien against most properties until paid • Property Taxes take precedence over liens & mortgages

Escheat • Escheat means to “fall back” • If you die intestate (no will) and with no heirs; • If you abandon your real property it will revert to the state

Property Tax • • • “Ad valorem” tax (as to value) Millage rate (tax per $1, 000 of value) Assessment ratio (math to confuse you) Exemptions (non-profit, current use, homestead, elderly, ? ? ) The tax bill for a property with a market value of $120, 000 in a jurisdiction that assesses a millage rate of 25 mills on 40% of a property’s market value and permits a exemption of $2, 500 for this type of property is calculated as follows: 10

Tax Bill Calculation Market Value multiplied by Assessment Ratio equals Assessed Value minus Exemptions (if any) equals Taxable Value divided by 1000 times Millage Rate equals Property Tax $120, 000 x. 40 $48, 000 -$2, 500 $45, 500 1000 x 25 $1, 137. 50 11

Administering the Property Tax 1. 2. Identify all properties and estimate their values Develop a budget and tax rate. – The budget is determined by the appropriate government officials based on the costs of providing government services to the community (police and fire protection, schools, libraries, street, etc. ) – Dividing the budget amount by the tax digest (total value of properties in the jurisdiction) yields the tax rate (mill levy) necessary to generate the budget amount. 3. Bill the property owners and collect the taxes. – See Legal Highlight “Mechanics of the Property Tax Certificate in Florida” 12

Power of Eminent Domain • Right of the government to take private property for public use upon the payment of just compensation • Use must be a valid public use – See Legal Highlight “What Constitutes ‘Public Use’”? • Property owner must be compensated fairly 13

Inverse Condemnation • See Legal Highlight “Inverse Condemnation” 14

Takings • AKA inverse condemnation • Argued by landowners • 3 categories – Trespass (interference with possessory interest) – Nuisance (interference with use & enjoyment) – Police Power (gone too far is a taking)

Police Power • Power to regulate use of private property to protect public health, safety, morals, and general welfare • Land uses are interdependent, meaning that the way one property is used affects other nearby properties. • Early and still valid use of police power is nuisance law – Preventing one land owner from using land in a way that interferes with another land owners rights 16

Comprehensive General Plan • Projected economic development • Transportation plan to provide for necessary circulation • Public-facilities plan that identifies such needed facilities as schools, parks, civic centers, water, and sewage disposal plants • Land-use plan • Official map • Implemented Primarily through zoning 17

Zoning • A form of police power • Regulation to protect the health and safety and general welfare of the public • Difference between zoning and eminent domain

First Zoning Ordinance • NYC - 1916 - Edward M. Bassett • To separate incompatible land uses • Covered the 5 boroughs and designated land as commercial, residential or mixed • Height restrictions calculated as multiples of setback from street • Ziggurat Buildings

Building Codes • Zoning regulates what can be constructed • Building codes regulate how it is to be constructed • Building codes set forth the minimum standard for – construction materials, location of exits, plumbing, electric, ventilating, heating and fire systems

Zoning • Zoning – division of a community’s land into districts to regulate the use of land buildings and the intensity of various uses – Type of use – residential, commercial, industrial categories – Intensity of use – developmental density • • Height and bulk limitations Bulk regulations Floor-area ratio (See Figure 4. 1 Examples of Floor-Area Ratios) Minimum lot size and setback regulations 21

Innovative Zoning ? • Planned unit development • Performance zoning • Incentive zoning • Transferable development rights • Form Based Zoning 22

More on Zoning • See: – Close-Up “The Smart Growth Controversy” – Legal Highlight “The Strange Case of the Incredible Shrinking Building” – Legal Highlight “The Case of the Costly Permit” 23

Zoning Changes • Legislative relief • Administrative relief – Variances – Special use permits • Judicial relief • Noncomforming uses 24

Building Codes • Standard for construction – Protect public health and safety – Promote energy conservation 25

Subdivision Regulations • Preapplication conference • Approval of preliminary plat – See Figure 4. 2 A Preliminary Plat • Approval of final plat – See Figure 4. 3 A Final Plat • Mandatory dedication • Impact fees 26

Takings • See Legal Highlight “The Takings Issue” Escheat • Government’s right to acquire ownership of land when the landowner dies without a will and without heirs 27