Has the Tide Turned?

Since 1986, the Florida Keys' confiscatory land use regulations have been imposed only on owners of undeveloped land. Two-thirds of those landowners reside outside the Florida Keys. They have no right to vote on the "got-miners" choices for the County Commission. Since the got-miners' "rate-of-growth" ordinance was imposed on the Keys in 1992, vacant landowners have been selling their property to the government at rock-bottom prices that rarely reached 15% of Fair Market Value.

In 1996, Andy Tobin and I sent Voice of Reason newsletters to just over 10,000 owners of undeveloped Keys' properties. Today there are only 4,000 such owners. The Keys' rate-of-growth ordinances have limited development to under 250 building permits/year since 1992 -- or less than 3,750 dwelling units in 17 years. This suggests about 2,250 parcels have been sold to government at unfair prices.

Now that the Florida DEP v. West, et al., decision has been released by the 3d District Court of Appeal, perhaps the remaining 4,000 owners of undeveloped Keys' land will realize that the State has been acquiring Keys' property -- for 17 years -- for about 10% of Fair Market Value. The 3d District Court of Appeal will issue its "mandate" on the West decision in two days (November 5th), and we assume the State is not dumb enough to lose another half-million dollars in interest on a high-risk petition for "discretionary review" by the Florida Supreme Court (only 11% are accepted for "review;" substantially fewer actually result in a reversal).

[This post replaces an earlier post.]

It Could Be a Busy 4th Quarter

After three weeks away from the pressure of brief-writing -- not to mention the stress of moving our pending regulatory taking and due process lawsuits -- it is a bit easier to cope. I did spend some of that downtime (at least an hour) thinking about what can be done to bring the Keys' land use regulations in line with those of a civilized society. Like the South of France. Not likely, that.

That raises a question: what civilized society would we like to emulate? California? There's a basket case, where affordable housing exactions are killing potential housing projects, and the state budget is a joke. How about Miami, Naples, or Fort Lauderdale? They have too much of everything, and the high vacancy rates to go with it.

Has anyone else noticed that Florida local governments (including the Keys) spent taxpayers' money like drunken sailors in the 2001-06 run-up? And now they're stuck with overpaid administrators and pension obligations that they will never be able to meet. OK, there's a goal.

First, fire half the County staff, starting with those who draw the largest paychecks. I challenge anyone to explain why we need a County Administrator when we have a County Commission that consists of five geniuses, all of whom are former (or future, because they are so smart) Nobel Prize winners. We could also do away with the County Attorney position, as all five Commissioners are more versed in the law than any attorney could possibly be. And the entire planning department could be let go, as there is nothing left to plan.

In the Keys, the City of Marathon cannot give away its building permits. The "village" of Islamorada was (correctly, I might add) deemed "charm-less" by United States District Judge James Lawrence King, and it is being sued by its former mayor, and a bunch of other people, over its sewer impact fees. Key West is, well, Key West. Monroe County may well be the only county in Florida where the population decreased over the 2000-2010 decade. Trust me, we will not get a merit badge for that statistic.

So ... are things good in the Keys? No. We have had several years of over-building, in large part because the State and County superseded the market, so every person who could, built a house. We now have a queue as long as my arm, of people who definitely do NOT want to build here. (The reason people wanted to build here was that "it was difficult.") We have had an artificial market here for 17 years, and it finally folded. Do we have a problem? Yes.

Do we need to change the regulatory climate in the Keys? Yes.

The Florida Keys Exclusionary Zoning System Needs to be Declared Unconstitutional

Professor Edward Ziegler, editor of Rathkopf's The Law of Zoning and Planning, has an article in the latest edition of The Urban Lawyer, where he makes the following observations.

Zoning almost by definition is exclusionary in nature, and this is, and has been, true even in many of America's major cities. .... Our regional problem today is that the strong arm of NIMBYism has turned the gentility of old "snob zoning" schemes into zoning schemes that perhaps can best be described as "hyper exclusion on steroids." ....

Typically, concerns about growth within a local community follow a certain political dynamic. .... NIMBYism at some point begins to dominate both the public's perception of future growth and the politics of the local planning and zoning process.

Eventually, anti-growth sentiment develops to the point where nearly everyone but the realtors' lobby has been turned into a BANANA (Build Absolutely Nothing Anywhere Near Anybody). Land use "activists" and civic-minded neighborhood organizations now emerge with the goal of promoting growth management and the "public interest" (often under the banners of "environmental protection" and "fighting urban sprawl") and pressure the city to enact increasingly intensive and burdensome zoning and growth management programs.

Sound familiar? Well, it should. Looking back over the past 25 years, we can see Professor Ziegler's "growth management nightmare" develop in the Florida Keys just as he described it. Since the early 1980's, Monroe County's elected officials have bent over backwards to play the BANANAs and NIMBYites games. First came massive downzonings in 1986, when thousands of platted subdivision lots were stripped of any right to build anything, and a 1-year moratorium was imposed on development on North Key Largo -- that is still in effect today, 22 years after that year ended!

Then, in 1992 the County, led by its since-disgraced top BANANA, Commissioner Jack London, rammed through a "Rate of Development" ordinance -- allegedly based on a hurricane evacuation infrastructure deficiency (US-1 needed to be widened) -- that was supposed to last no more than 10 years, or to 2002. Well, guess who proceeded to oppose all efforts to widen US-1 and build a new bridge over Jewfish Creek. You guessed it, the Monroe County Commission and its bosom buddies, the neighborhood NIMBY associations (who continue to steadfastly oppose anything that would improve hurricane evacuation times).

Professor Ziegler's article doesn't mention how one can remove the obstructive and value-reducing "growth management" plans put into place by the NIMBYs, BANANAs, and their elected lap-dogs. But we can suggest one. Convince a state or federal judge to follow the lead of the Massachusetts Supreme Court in Zuckerman v. Town of Hadley, 813 N.E. 2d 843 (MA 2004), and declare the Rate of Development system unconstitutional.

Breaking the Back of Unconstitutional Rate-of-Development Ordinances in the Florida Keys

Enacted in 1992 as a "hurricane evacuation infrastructure deficiency" moratorium -- that would expire in 2002 -- every local government in the Florida Keys now has a permanent Rate-of-Development (ROD) ordinance. And those same governments have stalled, and openly opposed, the infrastructure improvements that were going to be completed by 2002. Of course, the got-miners oppose any and all infrastructure improvements, and the local governments gladly appease them. The hurricane evacuation rationale has morphed into a sewer infrastructure deficiency, a save-the-trees program, and an endangered species program, protecting endangered rats, snakes, Playboy bunny, and midget Virginia white-tailed deer (imported in the 1800's as food).

At some point these ROD ordinances must be unconstitutional as violative of Substantive Due Process. Recently, in Zuckerman v. Town of Hadley, 813 N.E. 2d 843 (Mass. 2004), the Massachusetts Supreme Court held that a ROD ordinance -- in effect for 15 years -- was no longer constitutional. Just imagine -- the Town of Hadley had done nothing to cure the "infrastructure deficiency" its ROD ordinance was supposed to alleviate. But it sure reduced development and the got-miners were quite happy.

Sound familiar? Of course. It happens all over the United States, in areas thought to be desirable by the people who live there, as well as those who would like to live there -- and can buy land there but cannot get a building permit. Once someone manages to own their piece of paradise, their highest priority becomes preventing anyone else from doing so.

For an excellent analysis of the problem, see William A. Fischel's "The Homevoter Hypothesis: How Home Values Influence Local Government Taxation, School Finance, and Land Use Policies," Harvard Univ. Press (2001). The author is an economics professor at Dartmouth College, who previously published "Regulatory Takings: Law, Economics, and Politics," Harvard Univ. Press (1995).

Last year we filed two lawsuits challenging Florida Keys' ROD ordinances. The first one, Lightner et al. vs. Monroe County & the State of Florida, involves over 1,200 parcels of land on Big Pine and No Name Keys. The other, Evanoffs vs. the Village of Islamorada, targets that town's ROD ordinances. In the latter, the Circuit Court has agreed that the Complaint states a cause of action, and has asked the parties to schedule a trial at the earliest available opportunity. It would appear that we are on the right track.

Due Process Challenge to ROGO Coming

In addition to the lawsuit challenging the constitutionality of Islamorada's "BPAS" ordinance, we are preparing a lawsuit challenging Monroe County's rate-of-development con game and confiscatory zoning regulations. This will consist of substantive due process claims against the County and the State, by several landowners. We do not contemplate a class action for several reasons, but primarily the complexities of dealing with a number of confiscatory (and, therefore, unconstitutional) regulations, state rules, and comprehensive plan provisions. If the regulations can be invalidated by a handful of landowners, it will become difficult for the government to continue applying them to other landowners.

We believe there is an excellent chance to remove the 255 permit/year growth cap, as well as the "ROGO" ordinance itself, and a good chance of removing the confiscatory zoning categories (NA, SS, SR, etc) unless the County or State decides to condemn all those properties and pay full Fair Market Value for them. In an eminent domain proceeding, the ROGO and confiscatory zoning regulations will be ignored (condemnation blight), and landowners will be paid as if their property is buildable.

Given the state of the economy, there is not a chance in Hell that Monroe County will condemn as much as a square foot of land. The State may have had the money to do so, but now that the Governor has decided to pay $1.7 Billion to buy Big Sugar, it is doubtful that the State will initiate eminent domain proceedings in the Keys -- at least in the near future.

It is sad that thousands of landowners "voluntarily" sold their Keys property to the State over the past 15 years. But, as then-Chief Judge Schwartz, of the Third District Court of Appeal, reminded us several years ago, "the courts do not exist to save people from the use of their pens." Maybe someone will think of a way to unwind some of those sales....

Existing and potential clients should call me or Andy Tobin to talk about the differences between invalidation and "taking" relief, and the specific application of these principles to their individual properties.

Islamorada Rate-of-Development Ordinance Challenged as Unconstitutional on Due Proces Grounds

On May 27, 2008, we filed a regulatory taking and substantive due process Complaint against Islamorada, for an out-of-state landowner who owns a 4-acre, undeveloped parcel on the ocean, with (god-forbid!) trees. We have not served it yet, for several reasons (including a companion suit against the County that has not been filed yet). But, local reporter Robert Silk discovered the Complaint three days ago and it will probably be in the newspaper by Wednesday.

Robert Silk characterized this latest action as a "full-blown attack" on the Village's Rate-of-Development ("ROD") ordinance (local name = BPAS), and he is correct. Four years ago, the Massachusetts Supreme Court held an ROD ordinance unconstitutional (813 NE 2d 843). The town of Hadley had enacted an ROD due to a (theoretical or real, it matters not) infrastructure deficiency (think "hurricane evacuation"). Fifteen years later, said "deficiency" still existed and the supreme court declared the ROD ordinance unconstitutional. I believe that somewhere in the neighborhood of 30 to 40 Massachusetts towns have since lost similar challenges to their ROD ordinances. (This was a real popular gimmick 15-20 years ago.)

The Florida Keys have been under majoritarian rule for the past twenty years, and the owners of undeveloped land, especially owners who do not vote in the Keys, have no worse enemy than the "got-miner," "no-growth," local voters (and their elected Commissioners) who are solely concerned with maintaining the highest possible market values for their HOMES in the Keys. PREVENTING new construction is what these HOMEVOTERS believe will maintain the value of what is their only significant asset, or at least the largest portion of their net worth.

In 1787, in Federalist #10, James Madison warned the nation-to-be that majoritarian rule (he called it "faction") was the major evil the new Republic had to keep under control -- but he recognized that majorities have long been known to protect their financial interests by destroying the rights of the minority. In 1788, Madison -- then drafting the Bill of Rights to be enacted by the First Congress -- in a letter to Thomas Jefferson, said "the danger of oppression lies in the interested majorities of the people rather than in usurped acts of the government," and "where the power ... is in the many not in the few ... it is much more to be dreaded that the few will be sacrificed to the many."

Madison was correct. The problem is more severe today in small communities like ours, where the privileged Commissioners -- and their majoritarian HOMEVOTER supporters -- can literally drive the value of undeveloped property (owned by the voting minority) to zero. If you are in the minority, you cannot remove these HOMEVOTER ELECTED local officials, but you can:

(1) refuse to sell your land to the State or County, or to individuals seeking points, and
(2) sue them for Just Compensation (the Fair Market Value it would have with the maximum possible number of permits before they changed the regulations and prevented you from building) for the diminution of your property's value.

The Founding Fathers, pushed by Madison, put your right to sue the bastards in the Bill of Rights, because they knew this could happen to you. And, guess what, it has!

Rate-of-Development Ordinances and Condemnation Blight

Rate-of-development ("ROD") ordinances -- coupled with confiscatory land use regulations -- are intended to (and do) depress the Fair Market Value of undeveloped parcels. This allows the government's land thieves to sweep up land at prices far below what they would have to pay in a condemnation proceeding. They can either repeal the regulations or begin eminent domain proceedings so people will get the full value of their property.

In 2006, and so far in 2007, the State's land thieves increased their offers, paying $46,000± for lots in many subdivisions -- which doesn't match what people are paying for ROGO lots -- but it's better than 2005's $35,000. The State paid out $31.8 million for 815 unbuildable Keys properties in 2006 (average $39,086), and $7.6 million for 363 parcels in 2006 (average $21,070.)

A few landowners have really rung the bell. A colleague accepted $220,000 from the State for an unbuildable IS lot on Middle Torch Key. (We told them that must mean the lot is worth at least $500,000.) That's still the highest price the State has paid for a platted lot to date, and was the 7th largest check the State wrote in 2006 (for unbuildable Keys property, that is).