Regulatory taking - Definition and Overview

When a government deprives a person of the use of property by the application of regulations, but such regulations have not affected the ownership of the property, a regulatory taking has occurred. This is distinguished from a non-regulatory taking in that the person still holds an interest in the property. Regulatory takings merely deprive the owner of the use of the property.

An example: suppose a piece of property is situated within a residential subdivision, and consists of less than one-half of an acre (2,000 m²). If the zoning for the property requires that no structures be built unless the property is 10 acres (40,000 m²) or larger, the owner could argue that the government has taken the property with its zoning regulation. The government's defense would have to show that the owner has retained some economic value in the ownership of the land.

In the United States, takings without the payment of the fair market value of the property is forbidden by the Fifth Amendment. US courts have found, however, that governments are not required to allow property owners to build the structures which would provide the highest and best use for the property. US governments are only required to provide zoning which would result in some economic value.

See also: eminent domain