This Note argues that courts should give more weight to climate change when assessing the reasonable investment-backed expectations that define the owner’s property interest. First, the owner’s expectations should be viewed dynamically, evolving over time, because government regulations—climate and disaster controls in particular—must also respond to changing circumstances. Currently, expectations are fixed at the time of purchase, with some limitations.
Second, notice of disasters and investor behavior should inform reasonable investment-backed expectations about climate change. Public news sources frequently cover disasters and responses from parties in the financial sector, such as insurers. Property owners thus receive notice of how experts, in forecasting financial risks, are adapting to climate change and how that affects their property. When the circumstances suggest that a property owner is aware of greater risks, it will be more difficult for them to claim those risks were not part of their reasonable investment-backed expectations.
Third, courts should give more weight to custom when defining a property owner’s reasonable expectations about climate change. Custom plays an important role in property law and helps define the reasonable person in tort law. It can do the same here. As Justice Kennedy noted in his concurrence in Lucas v. South Carolina Coastal Council, 505
U.S. 1003 (1992), reasonable investment-backed expectations are “based on objective rules and customs that can be understood as reasonable by all parties involved.” Although custom is slow to adapt, widespread and accessible information about climate change can accelerate the extent to which local custom reflects the consequences of climate change and informs the reasonable investment-backed expectations of property owners.
The proposed redefinition of the expectations factor has important theoretical implications. Applying the Penn Central factors constitutes an “ad hoc, factual inquir[y], designed to allow careful examination and weighing of all the relevant circumstances.” So rather than adopting a rule, the Court set forth a flexible balancing test to be applied on a case-by-case basis. This Note proposes a move towards a per se rule in those geographical areas where property owners should reasonably expect natural disasters caused by climate change, and government controls in response, to limit their property interests. A per se rule is not wholly unprecedented in takings analysis, however. The Court has recognized that any regulation that “‘denies all economically beneficial or productive use of land’ will require compensation under the Takings Clause.”
A per se rule increases uniformity in the application of a framework that the Court itself has described as giving “little insight” into when a regulation goes “too far” and becomes a taking. A more uniform approach increases consistency, which makes it easier for governments to understand what climate change controls constitute takings and thus to effectively respond to natural disasters without incurring significant cost. It also allows property owners to better understand the limits of their property interests when they choose to locate in a particular area.
To read this Note, please click here: Takings and Homeowners’ Expectations in Times of Rapid Climate Change.
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