STATE MANDATORY DEDICATION OPINIONS ILLUSTRATE "ROUGH PROPORTIONALITY" ANALYSIS James C. Kozlowski, J.D., Ph.D. NRPA Law Review, Parks & Recreation magazine, September 1994
In the case of Dolan v. City of Tigard, decided recently by the U.S. Supreme Court, several state court opinions helped the higher court determine "the required degree of connection between the exactions imposed by the city and the projected impacts of the proposed development." In so doing, the Supreme Court acknowledged that "state courts have been dealing with this question a good deal longer than we have, we [therefore] turn to representative decisions made by them." It noted, for example, that a number of state courts have required "the municipality to show a 'reasonable relationship' between the required dedication and the impact of the proposed development."
In Dolan, the Supreme Court found that some form of this "reasonable relationship" test had been adopted by a majority of the state courts. It cited a Nebraska state supreme court opinion as fairly representative of the "reasonable relationship" test. The Nebraska court had held that "a city may not require a property owner to dedicate private property for some future public use as a condition of obtaining a building permit when such future use is not occasioned by the construction sought to be permitted":
The distinction, therefore, which must be made between an appropriate exercise of the police power and an improper exercise of eminent domain is whether the requirement has some reasonable relationship or nexus to the use to which the property is being made or is merely being used as an excuse for taking property simply because at that particular moment the landowner is asking the city for some license or permit. Simpson v. North Platte, 206 Neb. 240, 245, 292 N. W. 2d 297, 301 (1980).
In Dolan, the Court held this "reasonable relationship" analysis to be "closer to the federal constitutional norm" than the "generalized connection" or "specific and uniquely attributable" tests adopted in several jurisdictions:
In some States, very generalized statements as to the necessary connection between the required dedication and the proposed development seem to suffice... We think this standard is too lax to adequately protect petitioner's right to just compensation if her property is taken for a public purpose.
Other state courts require a very exacting correspondence, described as the "specific and uniquely attributable" test... Under this standard, if the local government cannot demonstrate that its exaction is directly proportional to the specifically created need, the exaction becomes "a veiled exercise of the power of eminent domain and a confiscation of private property behind the defense of police regulations." We do not think the Federal Constitution requires such exacting scrutiny, given the nature of the interests involved.
The Supreme Court also adopted a "rough proportionality" standard for mandatory dedication, based upon the reasonable relationship test adopted in many other jurisdictions. The Court observed:
We think the "reasonable relationship" test adopted by a majority of the state courts is closer to the federal constitutional norm than either of those previously discussed [ i.e., generalized connection or specific and uniquely attributable tests]. But we do not adopt it as such, partly because the term "reasonable relationship" seems confusingly similar to the term "rational basis" which describes the minimal level of scrutiny under the Equal Protection Clause of the Fourteenth Amendment.
We think that a term such as "rough proportionality" best encapsulates what we hold to be the requirement of the Fifth Amendment. No precise mathematical calculation is required, but the city must make some sort of individualized determination that the required dedication is related both in nature and extent to the impact of the proposed development.
The Supreme Court cited several state supreme court decisions which had required "that the dedication should have some reasonable relationship to the needs created by the development." The following review of these state court opinions cited in Dolan should, therefore, give some further insight into what constitutes "rough proportionality" in determining whether a particular mandatory dedication scheme or requirements for an individual building permit violates the Constitution.
INFLUX NECESSITATES ACQUISITIONS?
In the case of Jordan v. Village of Menomonee Falls, 28 Wis.2d 608, 137 N.W.2d 442 (1965), the Wisconsin Supreme Court determined "the constitutionality of a requirement placed upon a subdivider, as a condition for approval of the subdivision plat" with the following test:
If the requirement is within the statutory grant of power to the municipality and if the burden cast upon the subdivider is specifically and uniquely attributable to his activity, then the requirement is permissible; if not, it is forbidden and amounts to a confiscation of private property in contravention of the constitutional prohibitions rather than reasonable regulation under the police power.
The Wisconsin state supreme court said this test was "an acceptable statement of the yardstick to be applied, provided the words 'specifically and uniquely attributable to his activity' are not so restrictively applied as to cast an unreasonable burden of proof upon the municipality which has enacted the ordinance under attack."
In most instances it would be impossible for the municipality to prove that the land required to be dedicated for a park or a school site was to meet a need solely attributable to the anticipated influx of people into the community to occupy this particular subdivision. On the other hand, the municipality might well be able to establish that a group of subdivisions approved over a period of several years had been responsible for bringing into the community a considerable number of people making it necessary that the land dedications required of the subdividers be utilized for school, park, and recreational purposes for the benefit of such influx. In the absence of contravening evidence this would establish a reasonable basis for finding that the need for the acquisition was occasioned by the activity of the subdivider. Possible contravening evidence would be a showing that the municipality prior to the opening up of the subdivisions, acquired sufficient lands for school, park, and recreational purposes to provide for future anticipated needs including such influx, or that the normal growth of the municipality would have made necessary the acquisition irrespective of the influx caused by opening up of subdivisions.
There also may be situations, unlike the instant one, where there is no substantial influx from the outside and the proposed subdivision only fulfills a purely local need within the community. In those situations it may be more difficult to adduce proof sufficient to sustain a land-dedication requirement.
The Wisconsin court concluded that "a required dedication of land for school, park, or recreational sites as a condition for approval of the subdivision plat should be upheld as a valid exercise of police power if the evidence reasonably establishes that the municipality will be required to provide more land for schools, parks, and playgrounds as a result of approval of the subdivision." In so doing, the court said that "the evidence in this case does establish such reasonable connection." The court also found that it was not necessarily an unconstitutional taking when "other residents of the village as well as residents of the subdivision may make use of a public site required to be dedicated by subdivider for school, park, or recreational purposes."
The test of reasonableness is always applicable to any attempt to exercise the police power. The basis for upholding a compulsory land-dedication requirement in a platting ordinance... is this: The municipality by approval of a proposed subdivision plat enables the subdivider to profit financially by selling the subdivision lots as home-building sites and thus realizing a greater price than could have been obtained if he had sold his property as unplatted lands. In return for this benefit the municipality may require him to dedicate part of his platted land to meet a demand to which the municipality would not have been put but for the influx of people into the community to occupy the subdivision lots.
Applying this test to the facts of the case, the Wisconsin court determined that "the provision of the ordinance requiring dedication of land when practicable for school, park, and recreational sites is constitutional as a proper exercise of police power."
NEED ARISES FROM SUBDIVISION?
In the case of Collis v. City of Bloomington, 310 Minn. 5; 246 N.W.2d 19 (1976), the Supreme Court of Minnesota considered the constitutionality of a statute and ordinance "which authorizes a municipality to require dedication of land for parks and playgrounds, or payment of fees to be used therefor, as a condition for subdivision approval." In considering the constitutionality of the dedication scheme the court held "a reasonable relationship between the approval of the subdivision and the municipality's need for land is required. "
While in general subdivision regulations are a valid exercise of the police power, made necessary by the problems subdivision create - i.e., greater needs for municipal services and facilities - , the possibility of arbitrariness and unfairness in their application is nonetheless substantial: A municipality could use dedication regulations to exact land or fees from a subdivider far out of proportion to the needs created by his subdivision in order to avoid imposing the burden of paying for additional services on all citizens via taxation. To tolerate this situation would be to allow an otherwise acceptable exercise of police power to become grand theft.
Despite the possibility of abuse, the state supreme court in this instance found that the dedication scheme at issue was not arbitrary or unfair and, therefore, constitutional.
But the enabling statute here prevents this [abuse] from occurring by authorizing dedication of only a "reasonable portion" of land for the purposes stated... A "reasonable portion" is construed to mean that portion of land which the evidence reasonably establishes the municipality will need to acquire for the purposes stated as a result of approval of the subdivision. This is, of necessity, a facts-and-circumstances test, but it is the only kind of test that will consider the myriad of factors which may bear on a municipality's needs for certain kinds of facilities and the relationship of a particular subdivision to those needs.
The state supreme court recognized that a flat 10 percent dedication of land for parks and recreation could place unequal burdens on developers, depending upon the density of the proposed subdivision.
REASONABLE "ELBOW ROOM"
In the case of Call v. City of West Jordan, 606 P.2d 217 (Utah 1979), the Supreme Court of Utah considered the constitutionality of an ordinance requiring subdividers to "dedicate land to the city, or pay the equivalent of that value in cash, to be used for flood control and/or parks and recreation facilities." The state supreme court said the ordinance was "within the scope of the powers" of the city "so that it can plan for the general good of the community as well as for the newly-created subdivisions."
Just how essential and desirable it is that cities have such authority in planning their growth is brought into sharp focus by reflecting, on the one hand, upon the conditions in the slum and ghetto areas of various cities, where there are none, or inadequate, parks and playgrounds and, on the other, upon the enrichment of life which has been conferred on other cities where there are parks, plazas, recreational and cultural areas (some of which are very famous) for the use of the public.
In modern times of ever-increasing population and congestion, real estate developers buy land at high prices. From the combined pressures of competition and desire for gain, they often squeeze every lot they can into some labyrinthian plan...with little or no provision for parks, recreation areas, or even for reasonable "elbow room." The need for some general planning and control is apparent, and makes manifest the wisdom underlying the delegation of powers to the cities, as is done in the statutes above referred to.
The Utah court held that "the dedication should have some reasonable relationship to the needs created by the subdivision."
[I]n the planning for the expansion of a city, it is obvious that no particular percentage of each subdivision, or of each lot, could be used as a park or playground in that particular subdivision; and likewise, that it could not be so used for flood control... [I]f the purpose of the ordinance is properly carried out, it will redound to the benefit of the subdivision as well as to the general welfare of the whole community.
In the case of City of College Station v. Turtle Rock Corporation,680 S.W.2d 802 (Tex. 1984), the supreme court of Texas considered the constitutionality and validity of the city's ordinance requiring park land dedication or money in lieu thereof as a condition to subdivision plat approval." The court noted that "[n]umerous other jurisdictions have upheld park land dedication ordinances as being legitimate exercises of the police power."
As a general rule, the court found that "[a] city may enact reasonable regulations to promote the health, safety, and general welfare of its people." Specifically, the court noted "two related requirements" must be satisfied "in order for this ordinance to be a valid exercise of the city's police power, not constituting a taking."
First, the regulation must be adopted to accomplish a legitimate goal; it must be "substantially related" to the health, safety, or general welfare of the people. Second, the regulation must be reasonable; it cannot be arbitrary. The presumption favors the reasonableness and validity of the ordinance. An "extraordinary burden" rests on one attacking a city ordinance. The concept of the public welfare has a broad range.
Applying these principles to the case, the Texas court found the ordinance to be "a regulatory response to the needs created by the developer's use of the land."
College Station's ordinance requires that only a small portion of a developer's subdivision tract be dedicated to serve park needs. It does not render the developer's entire property "wholly useless" nor does it cause a "total destruction" of the entire tract's economic value...
The ordinance does not permit the city to initiate action that compels a dedication of park land. As long as the land is not developed, the city requires nothing. It is only when a developer chooses to develop land that the city can step in to impose reasonable regulations upon that development.
On its face, this ordinance is not inherently different from other types of municipal land use regulations such as density controls and street dedication requirements.
In finding "College Station's park land dedication ordinance is not unconstitutionally arbitrary or unreasonable on its face," the Texas court said that "the ordinance may be unduly harsh or create a disproportionate burden in the case of a particular subdivision or developer." It also found that the burden of proof rests on the private developer to demonstrate that there is no such reasonable connection.
In determining whether this ordinance was unconstitutional as applied to a particular developer, the Texas court directed the lower courts to consider whether there is a reasonable connection between the increased population from a subdivision and the increased park and recreation needs in a neighborhood.
Both need and benefit must be considered. Without a determination of need, a city could exact land or money to provide a park that was needed long before the developer subdivided his land. Similarly, unless the court considers the benefit, a city could, with monetary exactions, place a park so far from the particular subdivision that the residents received no benefit...
Evidence which the court may consider includes "size of lots in the subdivision, the economic impact on the subdivision, [and] the amount of open land consumed by the development." This type of "reasonable connection" analysis ensures that the subdivision receives relief from a perceived need, and it will effectively constrain the reach of the municipality," the court said.
In reaching this determination, the court noted that the American Law Institute had similarly adopted a "reasonable connection" analysis. The Institute recommended that park dedication requirements be utilized as follows:
The [Model] Code adopts the position that developers may be required to provide streets and utilities but only of a quality or quantity reasonably necessary for the proposed development .... Similarly, a developer may be required to provide land or fees for parks or other open space. Again, however, the Code limits the extent of such demands to that reasonably allocable to the development--measured in terms of the need created by the development.