To: Connecticut Trust for Historic Preservation
From: Barbara S. McGrath, T. Benton Bare, and Michael J. Weil
Re: Hartford Historic Preservation Ordinance
Date: 8 April 2013
The City of Hartford adopted an ordinance in 2005 establishing the historic preservation commission (the “commission” or the “Historic Preservation Commission”) and the board of preservation appeals (the “Ordinance”). This memorandum evaluates the facial validity of that Ordinance and, where weaknesses are identified, suggests how the Ordinance should be amended with respect to the powers granted to the City under the Home Rule Act, other state statutes and other law.
I. Questions Presented
1. Did the City of Hartford have enabling authority to create the historic preservation commission and the preservation board of appeals?
2. Was Hartford preempted by state law from enacting the Ordinance?
3. If the City has authority to act for the purpose of historic preservation through the Ordinance, what are the potential challenges to the Ordinance as drafted?
4. If potential legal challenges to the Hartford Ordinance are identified, how should the Ordinance be amended to overcome such challenges?
II. Brief Answer
The City of Hartford did have sufficient enabling authority to enact the Ordinance under the Home Rule Act. While no explicit provision of the Home Rule Act specifically covers historic preservation, it may reasonably be inferred, and Connecticut courts have consistently held, that historic preservation is within the city’s power (i) to regulate and protect the environment and (ii) to regulate buildings.
Hartford was not preempted from enacting the Ordinance by state law. An examination of relevant Connecticut Supreme Court preemption jurisprudence shows that, while the state historic preservation law and the Ordinance do operate within the same legislative space, they not conflict, and therefore they may co-exist. More specifically, the state law creates districts and subjects all the properties in a district to regulation; by contrast, the Ordinance regulates specific properties previously classified as historic. No property is subject to both the state law and Hartford Ordinance.
The Ordinance is potentially vulnerable to legal challenge on two grounds as it is currently enacted: (1) that it denies property owners due process of law, and (2) its regulations arguably constitute an unconstitutional taking without just compensation. However, a careful analysis of both claims demonstrates the spurious nature of such attacks on the Ordinance.
To mitigate the defects identified in the Ordinance, model legislation is attached. A draft model ordinance for municipalities who seek to replicate the intent of the Ordinance is attached. The model ordinance could also serve to rectify the problems identified in the Ordinance. Second, should additional enabling authority be desired, explicitly granting municipalities the powers described in the Ordinance, model legislation which the state legislature could adopt is provided.
III. Factual Background
The City of Hartford adopted the Ordinance in 2005. Under the Ordinance, the members of the historic preservation commission shall be the members of the historic property commission appointed pursuant to the Old State House Historic Property District. See Municipal Code § 28-213. Municipal Code § 28-170 established a historic properties commission, comprised of 8 members (5 regular and 3 alternate) appointed by the mayor and approved by the Court of Common Council. Municipal Code § 28-170A(b). Additionally, the Ordinance established a board of preservation appeals comprised of one person appointed by the mayor, one person appointed by the Court of Common Council and one person appointed by the historic preservation commission who is not a member of the commission. Municipal Code § 28-220. The commission’s authority only extends to “protected property”, which is limited to property listed on the National or State Registers (other than a local historic property). Municipal Code § 28-218. The specific powers of the historic preservation commission are discussed below.
As enabling authority for the establishment and powers of this commission, the Court of Common Council looked to the Home Rule Act, C.G.S. 7-148 (“Scope of Municipal Powers”) and the City Charter. The Home Rule Act (“HRA”) enumerates the specific powers municipalities in Connecticut may exercise; neither “historical preservation” generally nor the creation of a historic preservation commission and board of appeals is specifically enumerated. While the City’s Charter may provide authority, the Charter’s grant of authority cannot exceed what would be authorized under the state statutes.
Connecticut has enacted a detailed set of statutes, C.G.S. §147 et. seq., which provide one mechanism for Connecticut cities to pursue historic preservation. The legislative scheme gives municipalities the power to establish historic district commissions. (Hartford has availed itself of this authority and has recognized five historic district commissions. See Hartford City Charter, Art. VII, § 28-170 – 28-174.) Under the state scheme, if two-thirds of the property owners in an area vote to create an historic district, the legislative body of the municipality may establish a historic district there. C.G.S. 7-147b (g) & (i). Once a historic district has been established, buildings and structures may not be erected, altered or
demolished in the historic district, without a certificate of appropriateness from the historic district commission. C.G.S. 7-147d (a) & (b). A majority vote of the members of the commission is required for the certificate of appropriateness to issue, and the commission must act on any application within 65 days, or it is deemed to have been approved. C.G.S. 7-147e (b). A person aggrieved by a decision of the historic commission may appeal to the superior court within 15 days of the adverse ruling. C.G.S. 7-147d (i).
It is vital to distinguish between the local historic districts created under state statute and the historic preservation commission created by the Ordinance. The state system permits property owners in a neighborhood to designate their neighborhood as historic (by a two-thirds supermajority vote), and imposes upon all properties in that district the rules described in the proceeding paragraph. By way of contrast, properties in Hartford that qualify as historic under the Ordinance, and are not in a local historic district, are automatically protected by the historic preservation commission and board of appeals.
Thus the state system creates districts (under which all properties in that district are subject to regulation), whereas the local system regulates specific properties, previously designated historic. The two systems are structured in such a way that no property can be subject to both state and local regulation. In the field of historic preservation, a property is either governed by state or local law, but never both. As discussed more thoroughly below, because of the lack of overlap between the state law and local Ordinance, we believe the Ordinance is not pre-empted under state law.
IV. Enabling Authority and Conflict Preemption Analysis
As enabling authority for the historic preservation commission, Hartford looked to the HRA, which enumerates the specific powers municipalities in Connecticut may exercise; neither historical preservation nor the creation of a historic preservation commission and board of appeals is specifically enumerated.
Taking a narrow reading of the HRA in one of its memoranda, the Office of the Hartford Corporation Counsel has concluded that the City exceeded the scope of its authority in enacting the Ordinance. Relying on a case from the Connecticut Supreme Court reciting the “well-settled principle of construction that specific terms covering the given subject matter will prevail over general language of the same or another statute which might otherwise prove controlling,” Gifford et al v. Freedom of Information Commission, et al. 227 Conn. 641, 652 (1993), the memorandum concludes that the City did not have sufficient authority to enact the Ordinance.
The Corporation Counsel’s legal conclusion that the language of the HRA and Gifford prevented Hartford from enacting the Ordinance is too narrow. However, even if Gifford is applicable here, there is no language in the state historic district commission statute to suggest that the method contemplated in that statute is the exclusive way for municipalities to preserve historic properties. Rather, the Connecticut Supreme Court has provided guidance on this issue in its preemption jurisprudence, which is the proper framework
within which to analyze the legal issues here. This line of reasoning will be more fully developed in the following paragraphs.
Given the foregoing discussion, it is reasonable to conclude that municipalities have the authority to preserve historic properties as (1) implied within the explicit powers granted under the HRA; and (2) the Connecticut Supreme Court’s preemption jurisprudence showing that the state historic district preservation law and the Hartford Ordinance may co-exist.
A. Home Rule Act (C.G.S. § 7-148)
The power to act in the name of historic preservation is inherent within the local government’s police power (to regulate the general welfare), and is included within those powers expressly granted to the City under the HRA. Specifically, the HRA gives municipalities the authority to regulate and provide for the protection and improvement of the environment, C.G.S. § 7-148(b)(8)(A) and the power to exercise their regulatory power over buildings, C.G.S. § 7-148(b)(7)(A).
In its memo, the Office of the Hartford Corporation Counsel concludes that preservation of private historic property is not a power included within any of the express powers granted to municipalities by the HRA. While the power to act in the name of historic preservation is not specifically granted under the HRA, a reading of the applicable case law makes it clear that the power is included within the grant of power through the HRA. As discussed below, the Connecticut Supreme Court has construed the term “environment” broadly enough to encompass historic preservation. Additionally, the court has stated, “the preservation of an area or cluster of buildings with exceptional historical and architectural significance may serve the public welfare,” Figarsky v. Historic Dist. Comm’n, 171 Conn. 198, 208–09 (1976), and would thus be within the quintessential power of state and local governments: the police power. While Figarsky refers to “cluster[s] of buildings”, the reasons for governmental preservation of groups of historic buildings applies equally to protection of buildings on an individual basis.
The Connecticut Supreme Court has construed the term “environment” quite broadly. In interpreting the Charter of Greenwich, the court was asked whether the phrase “public health and safety” included consideration of the environment and historic factors. Smith v. Zoning Board of Appeals, 227 Conn. 71, 84 (1993). The zoning commission of Greenwich had denied a petition to partition a property into three lots, concluding that “granting the petition would permit construction of a house in the . . . significant open space, thereby disrupting the essential characteristic of the historic district.” Id. at 76 (internal citation omitted). The homeowners appealed, claiming that historic considerations were outside the commission’s purview. The court rejected this argument, concluding that ‘public health and safety’ includes environmental factors, which in turn include consideration of historical factors. Id. at 86. Under this expansive construction, acting in the interest of historic preservation is understood as inherent in the police power of local governments and included within their authority under the HRA to “provide for the protection and improvement of the environment . . . .” C.G.S. § 7-148(b)(8)(A). In the Smith case, the court
considered government regulation over individual buildings, as contrasted with Figarsky, which considered regulation over clusters of buildings. Nonetheless, in both cases, the court concluded that historic preservation was a valid consideration that the municipality could lawfully apply in exercising its regulatory authority.
Moreover, the state legislature views historic preservation within the broader context of protecting the environment. In its statute establishing a private cause of action for declaratory and equitable relief against other private individuals whose actions may harm the environment, see C.G.S. § 22a-16, the legislature includes “the unreasonable destruction of historic structures and landmarks of the state. . . .” C.G.S. § 22a-19a.
Thus, it is reasonable to conclude that the courts would again find that the term “environment” was broad enough to include historic preservation in the context of the Ordinance. The reading of “environment” in the context of local power and general understanding by the state affirms the grant of power to Municipalities through the HRA to act in the name of historic preservation.
B. Conflict Preemption
Next, we consider whether Hartford was preempted from creating the historic preservation commission by the state historic district preservation law. The Office of the Hartford Corporation Counsel asserts that because the State Legislature has provided explicit statutory authority for municipalities to act in the name of historic preservation through the creation of historic districts, see C.G.S. § 7-147a et. seq., municipal power to act through any alternative is preempted. We believe, however, that the more accurate view is that state law does not preempt the local Ordinance.
The Corporation Counsel’s reasoning cannot stand in light of the weight of Connecticut authority, holding that so long as a state statute and a local ordinance do not conflict even though they regulate in the same area of the law, both will be found to be valid exercises of governmental authority.
In Greater New Haven Property Owners Ass’n v. City of New Haven, 288 Conn. 181 (2008), the Connecticut Supreme Court upheld a local ordinance in the face of a claim that because state law did not expressly authorize municipalities to impose licensing and inspection requirements on certain residential properties, local regulation was preempted by HRA’s limited enumeration of municipal power. Rejecting the plaintiff’s preemption argument, the court explained that an “ordinance does not conflict with a statute merely by imposing standards stricter than those imposed by the statute.” Id. at 190. The court found that no conflict existed between the state statute and local ordinance because (1) the statute does not prohibit the local requirements and (2) the local ordinance does not frustrate achievement of the state objectives. Id. at 191. “If both the statute and the ordinance are prohibitory and the only difference is that the ordinance goes further in its prohibition than the statute, but not counter to the prohibition in the statute, and the ordinance does not attempt to authorize that which the legislature has forbidden, or forbid that which the legislature has expressly authorized, there is no conflict. . . .” Id.
As applied, both the state law and the Ordinance are prohibitory in nature (both seek to regulate alteration and destruction of historic properties), but they do not conflict. The state statute empowers municipalities to create commissions with the authority to establish historic districts, and then regulate construction in these neighborhoods. The Hartford Ordinance does not create a conflicting regulatory framework. Hartford has not empowered its commission to create districts that are historic; instead it authorizes the commission to protect those properties previously listed as historic under on either the National and/ or State Registrar of Historic Places, and not protected under the state’s historic district legislation. The Ordinance provides an additional layer of protection for historic property, above the state floor; state law does not forbid such local regulation. As stated above, the Ordinance enables Hartford to protect specific historically significant properties, and is structured in such a way that no property can be subject to both the state and local historic preservation laws. Thus, both because they operate through distinct mechanisms, and because they do not operate in the same space (no property can be subject to both the state and municipal laws), the state historic district law does not preempt the Ordinance.
In Modern Cigarette Inc. v. Town of Orange, 256 Conn. 105 (2001), the Connecticut Supreme Court considered whether a local ordinance banning all cigarette vending machines was preempted by a state law which imposed restrictions on the placement of cigarette vending machines. The court held that the local ordinance was not preempted since the state law did not prohibit Connecticut municipalities from banning cigarette vending machines. Id. at 108. The court explained, “that a matter is of concurrent state and local concern is no impediment to the exercise of authority by a municipality through the enactment of an ordinance, so long as there is not conflict with the state legislation.” Id. at 119. “[M]erely because a local ordinance, enacted pursuant to the municipality's police power, provides higher standards than a statute on the same subject does not render it necessarily inconsistent with the state law. Whether a conflict exists depends on whether the ordinance permits or licenses that which the statute forbids, or prohibits that which the statute authorizes.” Id. at 120. The court went on to explain that had the state legislature intended to preempt towns from legislating here, it could have done so through a clear, unambiguous statement, as it had done in other legislation. See id. at 132.
In our case, the state statute does not forbid municipalities from creating local-level historic commissions and regulating individual properties; if it intended to preempt local regulation in this field of law, it would have done so expressly in the state historic district statute. Absent a clear and unambiguous statement of this sort, there is no conflict preemption. As the principles elucidated in Modern Cigarette make plain, “simply because the legislature had chosen to legislate on the subject does not mean, however, that the municipalities are without the power to regulate activities with local effects.” Id. at 130.
While the Ordinance arguably goes beyond the state statute in its regulation concerning historic preservation, its effect is not one that could be preempted as a result of direct conflict with the State Statute, but should rather be read as an exercise of “local effect” regulating “local effects,” consistent with the Connecticut Supreme Court’s preemption jurisprudence.
V. Constitutional Concerns as to the Ordinance
Once it has been determined that Hartford had the power to enact the Ordinance, it must be evaluated against potential constitutional challenges.
A. Due Process Challenges
Critics of the Ordinance could challenge the commission’s exercise of power as a denial of property owners’ constitutional right to due process of law. See U.S. Const., amend. XIV (“No State . . . deprive any person of life, liberty, or property, without due process of law;”).
While a due process challenger might argue that the notice provisions of the Ordinance are procedurally insufficient, these arguments ultimately prove unconvincing upon careful review, as discussed below.
Properties may become subject to the historic preservation commission’s regulatory arm without the affected property owner even having knowledge or consent of this designation. Municipal Code § 28-219(a) provides that no one may file an application for a demolition permit without first applying for and obtaining the approval of the commission “for any protected property or part thereof that is listed on the National or State Register of Historic Places, or, in regard to the National Register, for which a National Register application has been approved for study by the State Historic Preservation Office….” Third parties and other outside interests might petition to have specific properties studied or considered as historic without support from the property owner. The National Register process involves owner notification and consent; no such requirement applies to the State Register.
Once a property has been listed on the National or State Register of Historic Places, there is an irrefutable presumption under the Ordinance that the property warrants historic preservation status (“preservation presumption”). See Municipal Code § 28-219 (prohibiting demolition or alteration of any “protected property” without approval of the commission). As defined by the Ordinance, “[p]rotected property means (1) a property which is individually listed on the National Register or the State Register other than a local historic property and (2) an area, and all sites, structures, features and objects within such area which is part of a historic district.” Municipal Code § 28-218 (italics in original). “Historic district” is further defined by the Ordinance as “an area designated as a historic district on the National Register or the State Register.” Id. (As used here, historic district has a meaning distinct from the state-created local historic districts discussed above.)
As discussed above, a property is protected under the Ordinance if it is listed on either (or both) the National or State Registers. There are important differences between the National and State Registers. Before a property can be listed on the National Register, the affected property owner must be notified of the potential listing. If she objects to having her property listed, the property cannot be listed on the National Register. However, no
such notification-and-consent rule applies to listing a property on the State Register. The website of the State Register of Historic Places states that a property will be listed on the State Register if it has been nominated for listing and the nomination has been approved by the Historic Preservation Council. Further, listing on either the National or State register is not necessary for regulation: once anyone has filed an application for study that has been approved by the SHPO, the property is subject to the Ordinance’s regulatory arm.
An owner of property may object to the appropriateness of the designation as applied to her property, but potentially that property would be subject to the demolition delay provision simply because someone else thought to seek National Register status for the property. It does not appear that the owner may vacate the “approved for study” designation once applied to their property. See 36 C.F.R. § 61.4 and C.G.S. § 10-321q (adopting 36 C.F.R. § 61.4 for Connecticut). The preservation presumption, therefore, may attach without the affected property owner having any input or ability to challenge the appropriateness of the designation as applied to their property. Such lack of notice and owner involvement might be construed as a denial of due process of law.
By way of contrast, under the state’s local historic district system, a two-thirds vote of affected property owners is required to establish the historic district and, therefore, to become subject to the historic district restrictions; this mechanism arguably affords property owners more due process than the historic preservation commission.
For at least two reasons, the due process argument proves dubious upon close review.
First, at least as the National Register is concerned, the Ordinance does not deprive owners of protected properties sufficient notice since they are notified of, and given the opportunity to oppose, the historic designation when their property is initially reviewed for placement on the National Register of Historic Places. If the owner objects to having her property listed on the National Register, the property cannot be listed. Thus, the owner is provided notice and (properly) bears the burden of opposing the designation, if they so choose, at the appropriate time. The only potential federal challenge would be if a property had been approved for study without the owner’s approval, potentially making it subject to the Ordinance – and it appears likely that such a situation would be addressed by the owner’s approach to the SHPO (State Historic Preservation Office).
This argument, as applied to the State Register, is less strong. It is conceivable that a property may be listed on the State Register without owner consent or notification. Thus the possibility exists that a protected property could be listed on the State Register, and subsequently become subject to regulation under the Ordinance without notice to the owner. While possible in theory, this hypothetical seems unlikely in practice: Staff from the SHPO conduct a thorough review and make recommendations to the Historic Preservation Council prior to listing a property. As a matter of practice, staff from the SHPO always notify the property owner of the pending nomination. This review process provides the owner notice of any pending nomination and an opportunity to oppose its listing. (While she may have notice, the SHPO is under no legal obligation to respect the property owner’s wishes). Thus, it is possible (at least in theory) that listing on the State
Register could amount to denial of due process of law because of insufficient notice being given to the affected property owner.
While we do not believe owner consent to listing is necessary to satisfy the Due Process Clause, to the extent that one seeks to rectify this, state legislation would be required providing owner notification (and consent, should the Legislature be so inclined) prior to listing a property on the State Register. From a Constitutional perspective, owner notice is more significant than owner consent. The due process clause requires notice and an opportunity to be heard; it does not necessarily require property owners be given veto authority of a government action they are opposed to. Alternatively, Hartford might cease using the State Register of Historic Places as a proxy for determining which properties in Hartford qualify as protected.
If an owner purchased a property already listed on either register, ignorance that a property is designated historic does not constitute a denial of due process: such a rule would create a “purchase first, investigate later” paradigm which would be both unworkable and unreasonable.
Second, building upon the first reason, it is a settled principle of law that courts will defer to municipal government when it exercises governmental police power over private property, so long as the government not acting arbitrarily or irrationally. Nectow v. City of Cambridge, 277 U.S. 183, 187-88 (1928). Courts apply a deferential standard of review to these types of decisions and would only revisit a municipality’s decision where such decision is found to be completely irrational. It would be arbitrary or irrational for a municipality to prevent alteration or destruction of buildings without just cause or a specific, legitimate purpose for imposing restrictions. Compare such a hypothetical case to the situation here: Hartford has exercised its police power (the power to regulate buildings) by granting the historic preservation commission the power to protect historic properties. Hartford has not exercised its authority at random, nor has it done without a specific and legitimate purpose in mind. Therefore, the Ordinance does not deprive owners of protected properties due process of law.
In addition to the foregoing, the authority exercised by the Historic Preservation Commission is a component of Hartford’s police power and is closely related to the authority to regulate municipal zoning. In the well-known case of City of Euclid v. Amber Realty Co., 272 U.S. 365 (1926), the Court upheld the zoning scheme at issue there (excluding apartment buildings and retail establishments from an area zoned residential) as a valid exercise of the police power. Specifically, the Court held that a zoning ordinance must be clearly arbitrary and unreasonable, and without substantial relation to public health, safety, morals, or general welfare for it to be declared unconstitutional. Id. at 395. Thus, viewed under the umbrella of Hartford’s police power authority as a closely related cousin to zoning, the Ordinance is a valid exercise of that power. As discussed above, government action for the purpose of historic preservation has been held valid as reasonably related to the public health, safety and general welfare (see supra), and the commission may regulate in this field, provided it does not do so in a way that is arbitrary or capricious.
Thus, we do not believe that the Ordinance’s notice procedures are constitutionally deficient under the Due Process Clause.
2. Judicial Review
Another potential due process challenge to the Ordinance is the unavailability of any judicial review for a property owner aggrieved by a decision of the historic preservation commission and board of appeals. As with the notice argument analyzed above, we do not believe that the failure of the Ordinance to explicitly provide for judicial review renders the Ordinance constitutionally deficient.
By its terms, the Ordinance limits review of an adverse decision by the commission to the unelected board of appeals, see Municipal Code § 28-220; it does not explicitly provide for subsequent judicial review. Of course, just because the Ordinance does not provide expressly for explicit review by the judiciary does not mean a court would not review a decision if appealed.
While there is nothing explicitly precluding a court from hearing a challenge to a decision of the board of appeals, this lack of express judicial review could make the Ordinance vulnerable to challenge under the procedural component of the Due Process Clause of the Fourteenth Amendment to the United State Constitution. An aggrieved property owner would argue that she has been deprived the right to use her property as she chooses—a liberty interest protected under the Due Process clause—and the procedural safeguard in place (review by the board of appeals) is constitutionally insufficient. See Mathews v. Eldridge, 424 U.S. 319 (1976). The argument here follows that the review procedure of the Ordinance violates the Constitution and must be struck down.
It is doubtful any court would accept this argument, as doing so would require it to accept the premise that a municipality could dictate the subject matter jurisdiction of a state court. The State Legislature determines what cases trial courts may and may not hear; it is not within the province of municipal governments to tell state courts that they may not hear a particular case. Thus, there is nothing preventing a state court for reviewing the constitutionality of any action taken by the historic preservation commission or board of appeals.
For the reasons, discussed above we do not believe that the lack of explicit judicial review renders the Ordinance constitutionally deficient under the Due Process Clause. Regardless of the efficacy of such an argument, a simple amendment would be advisable to erase the basis for any such claim. Thus, the Ordinance should be amended to provide for explicit review of decisions by the board of appeals in the Connecticut Superior Court, pursuant to section 8-8 of the general statutes.
B. “Taking” and “Inverse Condemnation”
Finally, aggrieved property owners might contend that the regulations imposed by the Ordinance amount to an unconstitutional taking without just compensation. The Fifth Amendment of the U.S. Constitution prohibits government from taking private property “for public use without just compensation.” U.S. Const., Amend V. Similarly, the Connecticut Constitution provides,”[t]he property of no person shall be taken for public use, without just compensation therefor.” Conn. Const. art. I, § 11. As we discuss below, such an argument is unlikely to meet the heavy burden required to prove a taking under the federal constitution, or an “inverse condemnation” under the Connecticut constitution.
Challengers might argue that the alteration and demolition restrictions constitute an unconstitutional taking of private property without just compensation. Under the Ordinance, for properties listed on the National or State Register of Historic Places, and for properties that the National Register application has been approved for study by the SHPO, are considered protected; approval from the historic preservation commission is required before a property owner may apply to the City for a demolition or building permit. In considering a property owner’s request, the commission may require alterations to the project plan proposed by the owner, which alterations may increase the cost of a planned project by up to 20 percent. Municipal Code § 28-219 (c). Moreover, impacted properties may not be demolished except under very limited circumstances. See Municipal Code § 28-219 (e) (“Demolition of a protected property shall be approved by the commission only if the applicant establishes, to the satisfaction of the commission, that (1) there is no economically feasible alternative to demolition or (2) the property, through no fault of any owner of the property after the effective date of this chapter, does not contribute to the architectural or historic character of the district and its demolition will not detract from the architectural or historic character of the district.”).
While it is true that government must compensate if it has actually taken property, compensation need not be paid if it is merely regulating the subject property. The analysis turns on the question of the degree of government action. Most regulation of property is acceptable, but when the regulation becomes so onerous that it renders the property at least partially useless, it amounts to a taking. If so, government must pay the owner of the taken property just compensation. Thus, determining whether these regulations are a lawful government regulation or an unconstitutional taking is essential.
The U.S. Supreme Court (the “Court”) cases in this area are instructive. In Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1019 (1992), the Court held that where a government regulation denies a landowner of all the economic use of his land, the regulation constitutes a taking. As applied here, the Lucas rule suggests that the exercise of the historic preservation commission’s regulatory authority would not constitute a taking. Even if a homeowner were denied some conceivable use of her property (because she may not alter it as she likes or demolish the existing structure and start anew), any existing structure on the property would retain some economic value to the property owner. Compare such a situation to the facts in Lucas, where the Court found a taking when a state zoning ordinance, adopted after the owner purchased the lots, constituted a taking because the ordinance prohibited the owner from erecting any permanent structure on his lot.
Thus, under the Lucas rule, the regulations set forth throughout the Ordinance do not constitute a taking because they would not deny an owner of all economic uses of her land.
Even if a regulation does not deprive an owner of all the economic value in his land, it may still constitute a taking. However, regulations that merely decrease the value of a property do not constitute a taking so long as they leave some economically viable use for the property. Penn Central Transportation Co. v. New York, 438 U.S. 104, 124 (1978). In assessing the economic impact of a government regulation, the Court considers the impact of the regulation on the claimant: the Court examines the extent to which the law “adversely affect[s] recognized economic values.” Id. The analysis includes examining whether the regulation substantially interferes with distinct investment-backed expectations of the property owner. Id at 125. In addition to causing economic harm, the challenged regulation must “interfere with interests that are sufficiently bound up with the reasonable expectations of the claimant.” Id.
In Penn Central, the Court upheld New York City’s “landmark” zoning ordinance, which prohibited alterations to the facade of Grand Central Station. While acknowledging that there was some interference with how Penn Central could use its property, such interference does not ipso facto constitute a taking. Rather, the court concluded that the landmark regulation did not interfere with how the property was presently being used: as a railroad terminal. Id. at 136. Thus, the law did not interfere with the property owner’s primary expectation about how the property could be used; thus Penn Central could still obtain a reasonable return on its investment. Id.
Connecticut case law confirms the proposition that reasonable regulatory limits imposed on the use of property do not amount to an unconstitutional taking without just compensation under the federal constitution, or an “inverse condemnation” under our state constitution. See Rural Water Co., Inc. v. Zoning Board of Appeals of Town of Ridgefield, 287 Conn. 282, 299 (2008) (denial of application to construct single-family dwelling on undersized lot containing radon did not constitute an “inverse condemnation”); City of Bristol v. Tilcon Minerals, Inc., 284 Conn. 55, 82 (2007) (reversing a finding that municipal government contamination of groundwater constituted a taking by “inverse condemnation”); Bauer v. Waste Management of Connecticut, Inc., 234 Conn. 221, 249 (1995) (zoning regulation which imposed a height limitation on landfill did not constitute an unconstitutional taking of landfill owner’s property); Green Falls Associates v. Zoning Board of Appeals of the Town of Montville, 138 Conn. App. 481, 494 (2012) (denial of variance to permit building of a three-bedroom home did not so greatly reduce the pecuniary value of the property as to constitute a “confiscation”); AEL Realty Holdings, Inc. v. Board of Representations of the City of Stamford, 82 Conn.App. 613, 622 (2004) (change in the classification of property on city’s master plan did not amount to taking by inverse condemnation because property owner could continue to use the property as currently zoned).
Considering the application of these principles to a theoretical challenge to the Ordinance, it is important to note first that an adverse decision by the commission would leave some economic value in the subject property. Even if a property cannot be altered in precisely
the way a property owner might desire, it still would have some viable economic use and some monetary value. Thus, reasonable action taken by the Historic Preservation Commission would not constitute a taking or inverse condemnation.
Similarly, a property owner who is prevented from demolishing an existing structure on his property, could, by definition, derive some economic value out of the existing structure; this supposition vitiates any takings claim. Where there is no economically viable use of a structure on a property, demolition must be approved by the Historic Preservation Commission. See Municipal Code § 28-219 (e) (“[d]emolition of a protected property shall be approved by the commission only if the applicant establishes that . . . there is no economically feasible alternative to demolition. . . .”) (emphasis added). The corollary of this rule therefore must be that if demolition is not approved by the commission, there must be some economically viable usage of the property. Similarly, demolition shall not be prevented where it is ordered by the city on an emergency basis for health and safety purposes. See Municipal Code § 28-219 (f). These provisions provide property owners with the necessary protections and should obviate the not unreasonable fear that a property owner could be saddled with a structure on her property for which there is no economically viable use and no way for her to lawfully demolish said structure. These provisions also prevent a takings claim from being successfully brought on this basis.
Moreover, an analysis of the property owner’s reasonable investment backed expectations demonstrates why this is dubious takings claim. Having acquired property of historical significance with the knowledge that the Harford historic preservation commission exists and understanding its regulatory authority, one’s investment expectation is surely affected by that information (at least where one expected to significantly alter or demolish an existing structure). This proposition is best demonstrated by way of example. Imagine there was a church in Hartford that is properly listed on the National Register of Historic Places. In need of cash, the Congregation has decided to sell the property to a development company, which buys the property with the intent to demolish it and build a retail space in its place. The company’s efforts would be thwarted from doing so by the enforcement of the Ordinance, and their “distinct investment backed expectations” would not be realized. This, however, would not be a taking because such an investment-backed expectation would not be reasonable. It is simply unreasonable to presume that one could lawfully purchase a historic property for the purpose of demolishing it to turn a quick profit. Of course, this argument is less strong for those who purchased their property long before the historic preservation commission came into existence.
Short of demolition, the commission may require alterations to the project plan proposed by the owner, which alterations may increase the cost of a planned project by up to 20 percent. Municipal Code § 28-219 (c). For the same reasons, this would not be a taking because it does not deprive a property owner all economic value in the property and does not defeat the property owner’s reasonable investment backed expectations. Rather, any increased projects costs due to compliance with local law should be reasonably factored into the cost of a project, and viewed as a part of the property owner’s investment backed expectations.
Thus, under both Lucas and Penn Central, the takings claim would likely be rejected because the regulations do not deprive affected property owners of all the economic value in their property, and purchasers of historic property could not reasonably claim they purchased that property with the investment backed expectation that they would be able to alter or demolish the existing structure at the time of purchase. Additionally, reasonable exercise of the Historic Preservation Commission’s authority would not constitute an inverse condemnation under state constitutional principles.
To summarize, the City of Hartford did have the authority to enact the Ordinance and the preservation board of appeals under the HRA, and was not preempted from doing so by the state historic district law. However, the Ordinance may be subject to constitutional challenge on the grounds that it may deprive property owners of due process because they may lose the right to use their property without sufficient notice (especially as applied to the State Register of Historic Places), and without any explicit right to judicial review. Similarly, challengers to the Ordinance could contend that the Ordinance’s regulations amount to an unconstitutional taking or inverse condemnation without just compensation. However, as discussed in the preceding paragraphs, these challenges are dubious and unlikely to succeed.
We have drafted a model municipal ordinance, which mitigates the weaknesses identified in the existing Hartford Ordinance. In addition, to alleviate any confusion as to municipal enabling authority to establish historic preservation commissions with the breadth of authority as that include in the Ordinance, we have drafted a model bill for the state legislature, which provides such authority. Both can be seen in PDF format HERE>> and Word Doc. HERE>>