The Oklahoma Bar Journal November 2022

Company from constructing a skyscraper on top of Grand Central Station. 25 The court determined that a city will not be required to pay compensation to a property owner under the Takings Clause of the Fifth Amendment when it des ignates the property as a landmark and limits its development. 26 In so ruling, the Supreme Court estab lished a three-part balancing test that requires consideration of 1) the character of the state action, 2) the economic impact of the regulation and 3) the extent to which the regu lation has interfered with a distinct investment-backed expectation. 27 Some of the most contentious cases involve applications to rezone property from residen tial to commercial development. There were several cases that were decided in the 1980s by the Oklahoma Supreme Court and the Oklahoma Court of Civil Appeals that highlighted matters that remain relevant today. One such case is Lynch v. City of Oklahoma City. 28 The Lynch case involved two sisters who inherited property with the family home from their mother. The home was torn down

recognized regulatory takings in two situations: 1) when a regula tion leaves the landowner with no economically viable use of the land (also known as a categorical taking) and 2) based upon the balancing test established in Penn Central Transportation Co. v. New York City. 21 A categorical taking occurs when a regulation denies all eco nomically beneficial or produc tive use of land. 22 For example, in Lucas v. S.C. Coastal Council, the United States Supreme Court held that a law prohibiting the owner of beachfront property from erecting any permanent struc tures rendered the property val ueless, which therefore resulted in an unconstitutional taking. 23 If the regulation does not deprive the property of all eco nomic value, courts will analyze the regulation under the Penn Central balancing test. 24 Penn Central is arguably one of the more interesting land use cases to be decided by the United States Supreme Court. It involved a chal lenge to New York City’s landmark preservations law, which prevented the Penn Central Transportation

matters is to ensure that decisions are not arbitrary but based upon good reasons for approval or denial. This standard was highlighted in McNair v. City of Oklahoma City . 17 In McNair, the Oklahoma Supreme Court held, “When the validity of a municipal zoning ordinance is challenged, it is the duty of the Court to determine whether pas sage of such ordinance is an arbi trary, unreasonable and capricious exercise of the police power.” 18 Practitioners also need to be aware that imposition of a par ticular zoning regulation, if not thoughtfully considered, can constitute a taking without just compensation. A government taking is generally thought of as a physical taking of a landowner’s property. However, if a regulation goes too far, it will be recognized as a taking. Regulatory takings were first recognized by the United States Supreme Court in 1922. 19 A regulatory taking occurs when a governmental regulation limits the use of private property to such a degree that it effectively deprives the property of any value. 20 The United States Supreme Court has

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THE OKLAHOMA BAR JOURNAL