1
MILLER & STARR
REAL ESTATE NEWSALERT
ARTICLE
WILL KOONTZ MEAN BIG CHANGES OR BUSINESS AS USUAL
FOR REAL ESTATE DEVELOPMENT IN CALIFORNIA?
By George B. Speir*
Main Article, Volume 24, Number 1
Reprinted in part from
Volume 24, Number 1, September 2013
(Article starting on page 3 in the actual issue)
On June 25, 2013, the U.S. Supreme Court released its decision in
Koontz v. St. John’s River Water Management District.1 Koontz has
been called the most significant takings case since Kelo v. City of New
London2 and has been hailed by property rights advocates as a major
victory for property owners. Writing for the 5-4 majority, Justice Alito
wrote that property owners cannot be compelled to agree to an over-
reaching demand by a public agency in order to obtain approval for a
project. All the justices, including the four dissenting justices, agreed
that refusing to grant a development permit unless a property owner
agreed to an unconstitutional condition was no different from grant-
ing the development permit on the condition that the over-reaching
government demand was later satisfied. This holding was not terribly
controversial. An extortionate demand by a government agency is not
different if it is phrased “if you agree to this condition, then the permit
is granted” than if it is phrased “the permit is granted, but only if this
condition is later satisfied.”
The second proposition decided by the Court was more controver-
sial. The Court held that monetary exactions must satisfy the same “es-
sential nexus”3 and “rough proportionality”4 standards as government
*George B. Speir is a shareholder in the Walnut Creek office of Miller Starr Regalia, specializing
in real estate litigation, eminent domain and land use matters.
