Lands Letter - 05/10/2006 (Plain Text Version)

View Graphical Version | Subscribe to NAHB Publications | Email our Editor...
NAHB Home Page| Browse other NAHB e-publications |Search back issues

In this issue:
Third Circuit Court Issues Decision Involving Substantive Due Process Claims
Supreme Court Forwards Federal Rule Amendments to Congress
Nebraska Supreme Court Upholds Impact Fee Ordinance
State Court Rulings on Impact Fees
New Jersey Supreme Court Hears Argument on Eminent Domain
Eminent Domain Decisions Around the Nation
Recent State Legislative Activity on Eminent Domain Bills
NAHB’s Eminent Domain Toolkit Now Available
Florida Inclusionary Zoning Case to Watch
City in Texas Finally Settles Long-Running Downzoning Case
Miscellaneous Federal Court Updates
Miscellaneous State Court Updates
Federal & State Legislative Updates
Oral Argument Transcripts From 3 Supreme Court Wetlands Cases
Fourth Circuit Denies Appeal Under IQA Finding No Standing
Welcome New LANDS Members
17th Annual LANDS Roundtable & Workshop a Great Success!
From the Editor
Contact the NAHB Legal Staff

City in Texas Finally Settles Long-Running Downzoning Case

Gary Sheffield, a Weatherford, Texas based developer, has recently settled a ten year case with the City of Glenn Heights, Texas over the development of his property. While the case began as a takings claim, it was ultimately resolved on the basis of his vested rights. The settlement agreement will allow Sheffield to develop the bulk of his property as originally planned.

Before Sheffield could file a preliminary plat, the City of Glenn Heights passed a moratorium and proceeded to down zone his property. The Cty never gave Sheffield notice of this moratorium, and it did not have to at the time. This down zoning of Sheffield’s property resulted in a significant reduction in the number of units that Sheffield could develop. Sheffield challenged the City’s actions as a regulatory taking.

Mr. Sheffield prevailed at the trial and appellate level, which found that the City’s down zoning was, in fact, a regulatory taking of his property because of its impact on his investment backed expectations. The Supreme Court of Texas, however, held that the economic impact of the city’s actions, though substantial, did not rise to the level of a taking. See Sheffield Development Co., Inc. v. City of Glenn Heights, 140 S.W.3d 660 (Tex. 2004). While the court was troubled by the City’s conduct, it also held that the moratorium did not constitute a taking because Sheffield was not able to prove that the economic impact he suffered from the moratorium was distinct from the rezoning.

The court, however, remanded the case to determine whether Sheffield had a valid vested rights claim. Mr. Sheffield had filed a plat during a gap in the moratorium period, and triggered statutory vesting. The City conceded this point and agreed to settle the case.

The City’s ability to institute a moratorium without notice has been resolved. Four days notice is now required prior to the adoption of any ordinance that prohibits the filing of plats. See Tex. Loc. Gov’t Code Ann. § 212.134(b). The Texas legislature also amended its vested rights statute during the course of this litigation. The statute now requires a city to consider each application of a permit based on the ordinances that existed at the time the original application for the permit is filed. See Tex. Loc. Gov’t Code Ann. § 245.002(a). The statute also provides that vesting occurs when either an “original application” or “plan of development” that gives “fair notice” to the city is filed.