Attorney-general guidance on regulatory takings reviewed; moratoria and rezonings flagged for caution

The Spokane Plan Commission on Jan. 22 received an overview of Attorney General guidance and case law on regulatory takings, a legal topic planners must consider when adopting code changes, rezoning properties or imposing land-use conditions.

Tim (presenter) outlined the key legal tests planners should use to screen proposed regulatory changes and summarized the AG—s recommended internal review process for local governments.

"Property owners do not have a constitutional right to the most profitable use of their property," Tim said, describing the constitutional baseline and why many land-use regulations are upheld. He reviewed the three-part takings framework used in Washington: (1) permanent physical occupation, (2) deprivation of all economically beneficial use, and (3) application of the Penn Central factors (economic impact, interference with investment-backed expectations, and character of the governmental action).

Tim said the Department of Commerce—s model procedures require local governments to prepare an advisory memorandum under RCW 36.70. Partial citation in the presentation referenced the statute and the AG—s advisory template; the memo is intended to produce a written assessment for decision-makers and the legal department that documents whether a proposed ordinance or rezoning raises takings concerns and to recommend next steps.

The guidance includes a list of "warning signals" to prompt a deeper constitutional review: whether a proposal creates a permanent or temporary physical occupation; whether it effectively eliminates all economically viable uses of a parcel; whether it requires dedications, easements or other conditions that place a disproportionate financial burden on the owner; and whether a regulatory action has a severe economic impact on property ownership. Tim noted that moratoria can be particularly sensitive: a moratorium of unlimited duration or without a specific, targeted purpose and clear plan to remedy the condition can risk litigation and a takings claim.

He discussed several court examples that illustrate different outcomes: a 30% open-space set-aside in a subdivision was questioned under impact-fee law (Isla Verde International Holdings v. City of Camas), secondary access requirements were upheld for safety reasons, dedications can be justified where a clear nexus exists (Sparks v. Douglas County), floodplain rules have been sustained where they are tailored to public purposes (Chaddock v. Yakima County), and landmark designation rejections have survived takings claims where historic-preservation purposes justified the restriction (Connor v. City of Seattle). Tim also cited Penn Central Transportation Co. v. New York City as the controlling multi-factor test for many regulatory takings claims.

Commissioners asked how the rules apply to multi-year moratoria and rezonings that affect adjacent property values. Tim said moratoria can be renewed but should be targeted to a known problem and accompanied by a plan and justification; if a moratorium continues without accomplishing its corrective task it could become the basis for a takings claim. He noted there is limited Washington case law that finds a regulation to be a taking, and he emphasized the importance of documenting the statutory process and the advisory memorandum required under state guidance.

Tim described an ordinary administrative pathway the city uses: review the proposed action, prepare and distribute an advisory memorandum to decision-makers and legal staff, use warning signals to evaluate the proposal, incorporate constitutional assessments into the agency review, and prepare internal responses if issues arise. He also described a concrete example of a utility project where the city is using condemnation (a friendly condemnation) to remove a restrictive covenant on a plat so a water booster station can be constructed on a constrained parcel.

Why it matters: zoning, overlays, development conditions, historic-designation decisions and moratoria can trigger expensive litigation or require financial compensation if they amount to a regulatory taking. The AG guidance and the cases Tim reviewed give planners a structured way to screen proposals and document legal analysis before decisions are finalized.

The commission asked staff to continue using the AG/advisory process and to circulate memos when projects raise potential constitutional issues.