Understanding the Takings Clause of the Fifth Amendment

Takings by the government have long been a complex and murky area of constitutional law. The Fifth Amendment of the U.S. Constitution does not provide much detail on how takings were to be carried out. While recent case law has added some clarity, the topic remains complicated.

The Takings Clause of the Fifth Amendment was designed to compensate private citizens when the government takes private property for public use. It states:

“Nor shall private property be taken for public use, without just compensation.”

The intent was to limit government power in serving the public interest, while also giving private citizens recourse against uncompensated property seizures by local, state, or federal authorities.

Over time, the Takings Clause has expanded to cover not only physical takings (when land is seized) but also regulatory takings—when government regulations reduce property value or make land unusable. These two categories form the basis of per se takings law.

 

 

 

Two important cases clarified aspects of takings actions:

• Murr v. Wisconsin (2017, U.S. Supreme Court)

• Matter of New Creek Bluebelt, Phase 3 (Baycrest Manor Inc.) (2017, New York Appeals Division)

Murr v. Wisconsin and the Denominator Problem

Background of the Case

In Murr v. Wisconsin, the Murr family inherited two abutting lots along the St. Croix River. One lot had a cabin, while the other was undeveloped and smaller than one acre.

The family wanted to sell the smaller lot to fund cabin repairs, but state ordinances prohibited selling or developing adjacent substandard lots under common ownership. The Murrs claimed this amounted to an uncompensated regulatory taking, as Lot E could not be sold or developed independently.

The case reached the U.S. Supreme Court, which sided with the state, ruling that the two lots should be considered as one property.

The Denominator Question in Takings Law

One of the biggest issues in takings law is the “denominator problem”—what portion of property is considered when determining if a taking has occurred.

The Court introduced a new three-pronged test to define the denominator:

1. Treatment of the land under state and local law

2. Physical characteristics of the land

3. Prospective value of the regulated land

This built upon the earlier Penn Central Transportation Co. v. New York City framework, which broadly considered the “parcel as a whole” but lacked specific guidance.

 

Reciprocity of Advantage and Fairness

The Court also applied the concept of reciprocity of advantage. This means that even if one lot is burdened, it may still benefit from regulations that increase the overall value of nearby land.

In this case, the undeveloped lot was restricted, but the combined lots gained value due to preservation of the scenic St. Croix River. Thus, while the Murrs could not sell Lot E separately, the two lots together were worth more.

Although criticized by Chief Justice Roberts for potentially favoring the government, the Murr decision emphasized fairness, considering both burdens and benefits in takings analysis.

Baycrest Manor: Clarifying Regulatory Takings in New York

Case Background

The Baycrest Manor case involved land in New York that was entirely wetlands and had no viable economic use under strict environmental regulations.

Baycrest Manor, Inc. argued that the land was effectively deprived of all use, amounting to a regulatory taking under the Fifth Amendment.

 

The Court’s Ruling and Key Precedent

The Court held that subsequent purchasers of restricted land can still bring takings claims, even if they knew about the regulations at the time of purchase.

This ruling followed Palazzolo v. Rhode Island (2001) and overturned New York’s Kim Quartet, which had previously barred such claims.

By allowing challenges from later purchasers, the Court recognized that unreasonable regulations remain unfair, no matter when the property was acquired.

 

 

Compensation and the Penn Central Test

The New York Court of Appeals upheld higher compensation than typical regulatory takings claims, recognizing that wetlands, while limited economically, may still have non-economic value.

The Court evaluated:

• Economic impact of the regulation

• Interference with reasonable investment-backed expectations

• Character of the governmental action

This analysis aligned with the Penn Central test, but the Court also factored in New York’s reasonable probability incremental increase rule.

Essentially, the Court considered what a hypothetical buyer might pay, knowing that a takings claim could succeed. This calculation helped determine fair compensation.

 

Conclusion

 

Both Murr v. Wisconsin and Baycrest Manor address different aspects of the Takings Clause but share a common goal—fairness in property rights disputes.

• Murr v. Wisconsin clarified how courts define the denominator in takings analysis, weighing both benefits and burdens.

• Baycrest Manor ensured that even subsequent landowners can bring takings claims, and that compensation fairly reflects realistic property value.

While one decision appears to favor the government and the other the property owner, both rulings refine takings law to promote balance and fairness.

The evolution of Fifth Amendment takings jurisprudence shows that while government regulations are necessary to protect public interests, private property rights remain central to constitutional protections.

 

 

[1] Murr v. Wisconsin, 582 US _ (2017)

[2] Matter of New Creek Bluebelt, Phase 3 (Baycrest Manor Inc.), ___ A.D.3d ____, 2017 N.Y. App. Div.

[3] Penn Central Transportation Co. v. New York City, 438 U.S. 104 (1978)

[4] Palazzolo v. Rhode Island, 533 U.S. 606 (2001)

[5] Kim v. City of New York, 90 N.Y.2d 1 (1997); Gazza v. Dep’t of Envir. Conserv., 89 N.Y.2d 603 (1997); Basile v. Town of Southampton, 89 N.Y.2d 974 (1997); and Anello v. Zoning Board of Appeals, 89 N.Y. 2d 535 (1997)