Exactions, Severability, and Takings: When Courts Should Sever Unconstitutional Conditions From Development Permits?

Abstract

Due to a variety of factors in the last half-century, local governments have increasingly relied upon exactions to finance new development projects. Developers and land owners have challenged these development conditions as abuses of the police power or as violations of the United States Constitution’s Equal Protection, Due Process and Takings Clauses. Recently, the Supreme Court has departed from its long tradition of deference to municipalities by heightening judicial scrutiny of challenged exactions. If a court finds an exaction to be unconstitutional, the court typically severs the exaction from the permit and enforces the remaining permit as if it were whole. By thus enforcing permits minus their conditions, courts allow developers to proceed unhindered and prevent municipalities from mitigating the harmful externalities or recouping the public costs resulting from development. The inefficiencies and inequalities created by this heightened review could be mitigated by applying the severability doctrine established in contract and public law to the law of landuse exactions. Applying the severability analysis would restore an element of certainty to municipal regulators by reducing their incentive to over-regulate development, and benefit both developers and municipalities by allowing a more efficient and equitable method of permitting development.