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NAHB Works to Open Federal Courts for Land Use Cases

Before landowners can bring their Fifth Amendment takings claims to federal court, they typically have to wait eight to 10 years and spend hundreds of thousands of dollars to have their case litigated in state court.

Only after the state court litigation is complete can a property owner have his case heard by a federal judge. To add insult to injury, federal courts routinely dismiss these cases because the matter has already been litigated. This leaves the property owners with a federal Constitutional claim that cannot be brought in federal court.

Kottschade’s case stems from his unsuccessful efforts to construct 104 townhomes on 16 acres of land in Rochester, MN, that the city’s land use plan identified as appropriate for higher density development.

The city’s planning and zoning commission recommended that the property be re-zoned to accommodate affordable housing at a greater density as long as a general development plan for the property was submitted and approved.

After Kottschade provided a plan that was consistent with all of the local zoning laws, the commission recommended nine onerous conditions that were adopted by the city council and effectively killed the project.

Those conditions, Kottschade said, reduced the development potential of his property by more than 75%, shrinking the number of townhomes he could build from 104 to 26, and making the project economically infeasible.

Following months of additional reviews, the city upheld the onerous conditions.

Kottschade then filed suit in the U.S. District Court for the District of Minnesota, arguing that the city’s regulations took his property and that he was due “just compensation” under the Fifth Amendment to the U.S. Constitution.

Even though the federal courts hear cases such as those involving the violation of First Amendment free speech rights or Fourth Amendment privacy rights, the Minnesota District Court decided that Kottschade needed to file his case in state court and, therefore, denied a federal hearing of its merits.

Kottschade subsequently appealed the case to the Eighth Circuit, which upheld the lower court's decision.

NAHB is now in the process of asking the U.S. Supreme Court to hear Kottschade's complaint against the City of Rochester.

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