The Meaning of Value: Assessing Just Compensation for Regulatory Takings

Abstract

Despite all the attention focused on the Takings Clause in recent years, the remedy for government takings of private property has been largely ignored. This Article examines different approaches to valuing takings. Until now, takings scholarship has focused primarily on the liability question: What government actions count as takings of private property? The remedy question, however, is equally important to the Fifth Amendment's protection of private property: When the government takes property, how should just compensation be assessed? It is settled law that compensation for takings is measured by the fair market value of the property taken, but this standard hides a number of important decisions - what the Article dubs valuation mechanisms - that can dramatically alter a property owner's recovery. These include, among others, choosing whether to value the property by the owner's loss or the government's gain; allocating development risk between the government and the property owner; and selecting a valuation date for the property. This Article identifies nine separate valuation mechanisms, examines their application in the case law, and argues that their application corresponds to different, substantive takings theories.

Keywords: Property, Remedies, Takings