Last week, the Supreme Court ruled in a five-to-four decision that a Florida water management district violated private property rights by asking a local developer to help finance the environmental mitigation of building on wetlands in exchange for a construction permit. Justice Elena Kagan said the decision might cause a revolution in land-use regulation. “Koontz v. St. Johns River Water Management District” will retain an enduring impact on the capacity for local governments to influence new development.

In 1972, developer Coy Koontz purchased a 14.9-acre vacant lot. Due to Florida regulations, all but 1.4 acres of the land became a Riparian Habitat Zone, which could not be developed without permission from St. Johns River Water Management District. In 1994, Koontz sought to construct a shopping center on three acres of his privately owned Florida wetland. While Koontz proposed to lessen the environmental effects of his development proposal by deeding a conservation easement on almost 75 percent of his land, the water management district would only grant Koontz a permit if he scaled down his plan and agreed to fund wetlands-restoration programs. Believing the stipulations to be unjustifiable, he declined the proposal and successfully disputed that the conditions infringed upon his private property rights. While the Florida Supreme Court disagreed, the Supreme Court of the United States sided with Koontz.

In the New York Times, Vermont Law School Professor John Echeverria wrote that the verdict may have an unsettling result in terms of land use planning, and that “the ruling creates a perverse incentive for municipal governments to reject applications from developers rather than attempt to negotiate project designs that might advance both public and private goals. Cities and towns across America routinely attach fees and other payment obligations to permits, for example, to support wetlands mitigation banks, to finance roads, to pay for new schools or to build affordable housing.”