Also known as: exaction cases · exactions case · exactions doctrine · Nollan/Dolan
Written by attorneys — see sources below.
Decisions applying the Takings Clause to government demands for property interests or money as conditions of land-use permits. The doctrine requires an essential nexus between the demanded concession and a legitimate public interest that would justify outright denial of the permit, plus rough proportionality between the concession and the project's impacts.
Eva Espinosa applies for a stormwater permit to develop a retail site. The city approves the permit only if Eva funds construction of a sports complex several miles away. Eva refuses, and the city denies the permit. Because the demanded payment lacks a demonstrated connection to stormwater impacts from the site, the denial is subject to scrutiny for an unconstitutional exaction.
Edgewater Capital seeks approval to add stories to an office building. The city grants the permit only if Edgewater records a public access easement through its lobby. Edgewater refuses the condition. The easement does not mitigate any specific impact from the added height, so the condition triggers review as a potential taking.
In late 2008, the Association of Bay Area Governments calculated San Jose's share of the regional housing need for the 2007-2014 period as approximately 34,700 units. Of these, roughly 19,300 units were needed for moderate, low, very low, and extremely low income households. As of February 2009, the city had met only a small percentage of its allocation for those income levels. Before 2010, San Jose applied its mandatory inclusionary policy only within redevelopment areas. More than 10,000 affordable units were built there between 1999 and 2009 under that policy. The city commissioned a 300-page economic feasibility study. It held more than fifty stakeholder meetings and nine public meetings on a draft ordinance. On January 26, 2010, the city council adopted Ordinance No. 28689. The ordinance applied to new residential developments of twenty or more units. It required at least fifteen percent of on-site for-sale units to be offered at an affordable housing cost to households earning no more than 120 percent of area median income. Alternative compliance options were available but at a higher twenty-percent rate. On March 24, 2010, the California Building Industry Association filed suit in Santa Clara County Superior Court. The suit sought facial invalidation of the ordinance. The complaint alleged that the city had failed to provide a sufficient evidentiary basis demonstrating a reasonable relationship between the developments' impacts and the ordinance's requirements. Six nonprofit affordable housing organizations and a low-income resident sought leave to intervene in support of the ordinance. The superior court ruled for CBIA and enjoined enforcement. The Court of Appeal reversed, holding that the ordinance does not require a dedication of property. The California Supreme Court granted review.
View caseYes. The doctrine extends to monetary exactions. When a permitting authority conditions approval on payment of money and then denies the permit because the applicant refuses, the denial is subject to the same nexus and rough proportionality requirements that govern dedications of real property.
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Yes. A permit denial based on refusal to accept a condition that lacks the required nexus or proportionality is treated as a taking subject to heightened scrutiny. The doctrine is not limited to cases in which the permit is issued subject to the condition.
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The government must demonstrate an essential nexus between the condition and a legitimate public interest that would justify outright denial of the permit. It must also show that the condition is roughly proportional in nature and extent to the impact of the proposed development.
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An easement fails the nexus requirement when it does not directly mitigate a harm caused by the project. For example, a lateral access easement does not address blocked views or increased recreational demand when the easement supplies a new public walkway unrelated to those specific impacts.
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