By Alison Rice. It was the type of Supreme Court case that makes everyone involved in land development--builders, developers, planners--very nervous.

The dispute dated to the 1980s, when the Tahoe Regional Planning Agency, worried about environmental impacts on Lake Tahoe, blocked development near the lake for almost three years. Property owners (represented largely by an association called the Tahoe-Sierra Preservation Council) sued, claiming the agency's action had deprived them of the intended use of their land: residential development.

To these landowners, the planning moratoria represented what's known as a "taking." The term refers to when government, either by a regulation (such as a moratorium or environmental restriction) or a physical action (such as taking a homeowner's property because it stood in the way of a planned highway), "takes" the land from the property owner.

But the U.S. Supreme Court disagreed with the Tahoe property owners, ruling 6-3 this spring that a development moratorium does not automatically qualify as a "taking" requiring government compensation for the property owners.

For planners, the decision in Tahoe (shorthand for the case's long, unwieldy name, Tahoe-Sierra Preservation Council Inc. v. Tahoe Regional Planning Agency) came as a relief.

Had the ruling gone the other way, "it would have dramatically tied the hands of local government," says Jason Jordan, government affairs coordinator for the American Planning Association (APA).

Photo: Phil Schermeister/Corbis

Lake Tahoe

Traditionally, governments have only paid property owners if they physically took land from them, not simply limited its use. After the decision, though, builders are the ones who are worried. "Our concern is that people will see [the] Tahoe [ruling] as the Good Housekeeping seal of approval for moratoria," says Christopher Senior, director of legal services for the NAHB.

However, neither the NAHB nor the APA interprets the Supreme Court's decision in that way. Instead, they both emphasize the court's advice that the question of whether a moratorium qualifies as a "taking" requiring payment must be decided on a case-by-case basis.

As a result, the APA says it's not expecting or encouraging any sort of post-Tahoe moratoria mania. "Our perspective is that moratoria should always be tools of last resort, not first resort," says Jordan.

When they are used, moratoriums usually last between six months and two years, according to Stuart Meck, APA's senior research fellow. "They're typically imposed when a locality needs some breathing room to step back from incremental change," he says.

Reasons may include public health concerns, infrastructure issues, the time gap between adopting a new comprehensive plan and approving the regulations that support it, and in some states, planning.

Builders fear that local governments, caught between growth pressures and anti-growth activists, are overlooking those guidelines. "Unfortunately, they're not using moratoria for emergencies. They're using them to slow growth, to stop growth," says Senior.

"That's always a danger," agrees Jordan. "But NIMBYism is as much a problem for planners as it is for developers."

Of course, a moratorium isn't the only way for a community to control growth. Senior sees the trend toward limiting the number, and sometimes the pace, of building permits issued as particularly troublesome.

"They're popping up all over," Senior says of permit caps, which have survived court challenges when thoughtfully crafted. "Now they're being adopted with no study, no formula, and no justification. They're economic deprivation devices."

Planners agree that permit caps are problematic. "I've never understood using permit caps on an annual basis," Meck says, "because they don't deal with all growth, just residential; they operate without regard to the economy, and they don't acknowledge how infrastructure actually operates."