The leaves change, but WIP talks carry on through the fall and into the winter (which, this being Chicago, should begin in a week or so). This Thursday, Visiting Associate Professor Christopher Serkin presented on the topic of existing uses in land regulation. The prevailing view is that, by and large, the government is constitutionally forbidden from regulating away (via, for example, zoning) an existing use of your land. So if you've already built a grocery store, and the planning board rezones your neighborhood as residential, the board can't force you to tear down the store. And this makes intuitive sense -- imagine the havoc it would wreak if the government could rip down every house on a block because they were too close to the street to satisfy a (newly passed) setback regulation?
But, Professor Serkin argues, our intuitions are at least partially misguided. To be sure, there are many excellent reasons for why existing uses are worth protecting. What is not so clear -- indeed, what Professor Serkin argues is simply wrong -- is to enforce a categorical constitutional rule protecting them. This, he claims, is neither justified by the existing constitutional doctrine, nor does it make sense as a normative policy.
The doctrinal arguments for the absolute protection of existing uses tend to be less arguments than they are assertions or, more bluntly, articles of faith. Courts simply take it for granted that a local body cannot regulate away an existing use, without explicitly locating it in any constitutional doctrine. Though some support can and is mustered from, for example, the Takings Clause, it is usually insufficient -- showing, certainly, that existing uses are often worth protecting, but not in any way demonstrating the need for a general rule. For example, the hallmark Penn Central case protects against diminution of value -- certainly something which would implicate many existing uses. But not all of them: one could easily imagine the case of low-income housing in a rapidly gentrifying neighborhood, where the redevelopment of the land would in fact increase the underlying property value.
The normative case for categorically protecting existing uses suffers from similar maladies. Once again, there is a potent cocktail of rationales that would effectively counsel protecting existing uses in many cases, but not all. The reasoning behind disfavoring retroactive laws (which are intuitively similar to regulating existing uses) is some conceptual desire for fairness and predictability by land owners, and that certainly deserves deference. But to the extent a new rule may be a significant improvement over the old regime, barring retroactivity outright might significantly diminish its benefits or enforceability -- sometimes so much so that it may be worth trumping. Other reasons for protecting existing uses falter because they rely on presumptions not usually extended in the property context. There is a plethora of literature demonstrating that people exhibit an "endowment" effect -- they greatly prefer losing the opportunity to get $100 versus losing $100 they already have, even though in formal economic terms these are the same. That subjective preference could be a reason to protect existing uses -- except that as a rule property law does not protect the subjective valuation of land, period. Of course, these over- and underinclusion problems could be cited against any rule regime, period, and one critique of the article was that it accuses the status quo of being arbitrary without presenting a more suitable alternative. Still, simply demonstrating that a sacred cow lacks the principled foundation we hitherto assumed has value in itself.
The upshot of this is not that existing uses should be regulated away with reckless abandon. As noted, the reasons which are generally trotted out to protect existing uses, even if not completely all-encompassing, do present a potent argument in many cases, and should command our attention. Indeed, the shift may be even more minor than one might think: one professor noted that the nuisance exemption (one of the few well-established exemptions to the protection accorded to existing uses) is sufficiently malleable that it is likely that many of the "good" regulations on existing uses have already smuggled themselves in under its guise. The change may thus be more rhetorical (albeit a pretty significant shift in rhetoric) than substantive in how it effects the day-to-day enjoyment of property by owners. In any event, we should expect and demand that the normal legal and political protections accorded to property owners will still be at work in this context as well, restricting existing use regulations only to cases where they are truly optimal.