The United States Supreme Court ruled against a group of property owners around Lake Tahoe who had contended that government moratoria on the development of their property amounted to a “taking” of their property without just compensation.

Lake Tahoe is a strikingly clear lake between California and Nevada. Over the past several decades, runoff from development began to lessen the lake's clarity. California and Nevada created the Tahoe Regional Planning Agency (TRPA), a regulatory body empowered to enact lake-conservation measures.

TRPA imposed two moratoria totaling 32 months prohibiting all development of property in the Lake Tahoe Basin while formulating a long range development plan.  Upset by the regulatory restrictions on their property, Tahoe-Sierra Preservation Council, representing about 2,000 property owners and many individual property owners, sued TRPA.

The property owners claimed that they were entitled to monetary compensation under the "just compensation clause" of the Fifth Amendment of the Constitution which requires the government to pay compensation whenever it acquires private property for a public use.   The property owners claimed compensation was due because the moratorium barred all economic use of their property for the period the moratorium was in effect.

In rejecting the property owners’ claims, the Supreme Court held that temporary restrictions on property use do not comprise a permanent taking for which landowners must be compensated.  Not all land use restrictions or regulations imposed by the government are compensable takings.  Justice Stevens, writing for the majority, said:

"Land use regulations are ubiquitous and most of them impact property values in some tangential way - often in completely unanticipated ways. Treating them all as per se takings would transform government regulation into a luxury few governments could afford."

However, the Supreme Court did uphold its prior decision in Lucas v. South Carolina Coastal Council,  where the court found that land use restrictions that permanently restrict development, depriving landowners of all income and economic benefit from the land, are "categorical takings" that must be compensated under the Fifth Amendment.

Tahoe-Sierra Preservation Council, Inc., et al. v. Tahoe Regional Planning Agency, et al., Supreme Court of the United States, No. 00-1167, Argued January 7, 2002 - Decided April 23, 2002.

Click here to read the full opinion

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