by Greg Walcher, E&E Legal Senior Policy Fellow
As Appearing in the American Spectator
Imagine that you own a house on a one-acre lot. The neighboring lot is vacant, and zoning rules allow anybody to build a similar house on it. So you decide to buy it and build a house for your daughter so she can live closer. Sorry, not allowed. The zoning rule actually means that any else can buy the lot and build on it — but not you. OK, then if you can’t use the extra lot you’ll sell it off. Again, sorry, not allowed. The zoning board has changed the rule and you now have only one lot.
That is exactly what happened to the Murr family in Wisconsin. The parents had purchased a lot and built their home, then later purchased the adjoining lot as an investment. When they died and the kids inherited the two lots, they decided to sell off the second lot, appraised at $410,000. But they were stopped by a new local zoning ordinance, passed years after their parents made the investment. Under the new rule, the two lots were treated as one and could only be sold together as one, even though they had always been deeded separately, and taxed separately.
That zoning ordinance had confiscated the $410,000 value of the second lot, rendering the parent’s investment worthless. The kids sued, citing the Fifth Amendment prohibition against government taking private property without just compensation. They lost, appealed, and lost again. They went all the way to the U.S. Supreme Court, where they lost again. They were prohibited from building on the lot, or selling it — they were out $410,000 (plus legal fees).