Nollan and Dolan and Koontz – Oh My! The Exactions Trilogy Requires Developers to Cover the Full Social Costs of Their Projects, But No More

Abstract

This article argues that, contrary to appalled assertions of some observers, the U.S. Supreme Court’s decision in Koontz v. St. Johns River Water Management District is a straightforward application of Nollan v. California Coastal Commission and Dolan v. City of Tigard. Nollan and Dolan established that when government requires a permit applicant to give up property in exchange for a permit, the demand must be closely related and roughly proportional to the development’s social cost. Anything that exceeds those bounds violates the unconstitutional conditions doctrine by burdening the right to just compensation for a taking. Koontz, like Nollan and Dolan, recognizes that government may legitimately require landowners to carry their own weight, mitigating their development plans so that they do not impose costs on their community. But government cannot use the permitting process to coerce landowners into giving up more. That simple rule will not end land-use planning or permit negotiations.

Keywords: Koontz, Nollan, Dolan, exaction, property rights, Takings Clause, unconstitutional conditions