An exaction is a concept in US
real property law
Property law is the area of law that governs the various forms of ownership in real property (land) and personal property. Property refers to legally protected claims to resources, such as land and personal property, including intellectual prop ...
where a condition for development is imposed on a parcel of land that requires the developer to mitigate anticipated negative impacts of the development. The rationale for imposing the exaction is to offset the costs, defined broadly in economic terms, of the development to the municipality. Exactions are similar to
impact fees
An impact fee is a fee that is imposed by a local government within the United States on a new or proposed Real-estate developer, development project to pay for all or a portion of the costs of providing public services to the new development.Juerg ...
, which are direct payments to local governments instead of conditions on development.
Exactions and takings
The
Supreme Court of the United States
The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point ...
has identified several criteria for identifying when an exaction becomes a
taking that requires compensation under the
Fifth Amendment.
Essential nexus
In ''
Nollan v. California Coastal Commission'', the court ruled that an exaction is legitimate if it shares an "essential nexus" with the reasons that would allow rejection of the permit altogether. In ''Nollan'' the court required compensation for a public
easement
An easement is a nonpossessory right to use and/or enter onto the real property of another without possessing it. It is "best typified in the right of way which one landowner, A, may enjoy over the land of another, B". An easement is a property ...
over the dry sand area of the beach as a condition for development, because they found that the easement was not closely related enough to fighting the psychological barrier to beach access that the development would present.
Rough proportionality
In ''
Dolan v. City of Tigard
''Dolan v. City of Tigard'', 512 U.S. 374 (1994), more commonly ''Dolan v. Tigard'', is a United States Supreme Court case. It is a landmark case regarding the practice of zoning and property rights, and has served to establish limits on the abili ...
'', the court added that an exaction is legitimate only if the public benefit from the exaction is roughly proportional to the burden imposed on the public by allowing the proposed land use—that is, that the exaction is not excessive to compensate for the
externality
In economics, an externality or external cost is an indirect cost or benefit to an uninvolved third party that arises as an effect of another party's (or parties') activity. Externalities can be considered as unpriced goods involved in either co ...
the proposed land use would impose. This "rough proportionality" must be shown by an individualized determination, with the burden on the government to show its evidence. In ''Dolan'', the court required compensation for an exaction that required donation of land for a public
greenway and bike path, because a private greenway would have been sufficient and the
City of Tigard was not specific enough about the benefits of the bike path.
[Casner, p. 1219]
Permit denials and monetary exactions
In ''
Koontz v. St. Johns River Water Management District'', the court clarified that the standards of ''Nollan'' and ''Dolan'' apply even when a permit is denied because the applicant refuses to agree to an exaction, and even when the exaction consists of a payment of money, rather than a dedication of land.
References
{{reflist
Real property law
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