.STATUS REPORT ON FLORIDA PRIVATE PROPERTY RIGHTS
A Proposal for Preparation
Joseph W. Jacobs P.A.
I. Historical Overview: The Four Periods of Florida Land History.
A. Nineteenth Century. Peninsular Florida was basically wilderness, and the Trustees
sold most of the State to private investors for one or two dollars an acre.
Distinguishing characteristics of the era were: (a) The Wharfage Act and other
legislation aimed at encouraging draining the swamps and filling the wetlands; (b) the
impact of the Railroads and the State's encouragement of transportation by guarantees
of railroad bonds and direct land grants to railroad companies; and (c) the general
public policy encouraging settlement of the wilderness.
Use restrictions centered on restrictive covenants and nuisance law. Government acted
basically as a referee, working out uses which interfered with each other.
B. The Florida Land Boom. The boom began when the Trustees sold most of the 20
million acres received from the federal government as swamp and overflowed lands, just
before World War I. Prices of land soared, as northerners were persuaded to invest in
developments often existing only in the minds of promoters. Distinguishing
characteristics include: (a) Premature subdevelopments (massive platting of lands in
southeast Florida) and installments sales of lots to non-residents; (b) a hands-off policy
in Tallahassee; and (c) enormous inflation in land values.
At the end of this era the United States Supreme Court upheld basic zoning laws in
the Euclid case. After Euclid state government could delegate broad power to local
zoning authorities, which could affirmatively regulate the use of land (despite attending
loss in real estate values) rather than simply preventing uses which interfered with each
C. The Land Bust and Immediate Post-war Era. The bust began with the 1926
hurricane, and led to massive delinquencies in ad valorem tax payments. Title to nearly
half the land mass of the State reverted to the Trustees for non-payment of taxes,
leading to the Murphy Act and other depression era legislation aimed at getting this
land back into private hands and onto the tax rolls. Distinguishing characteristics
include: (a) Massive deflation in land values, and non-record transfers of title under the
Murphy Act; (b) failure of southeast Florida subdivisions; and (c) the Trustees' emergent
interest in mineral rights, especially in potential tidal oil and gas reserves. The effect
of the land bust on the Florida ad valorem tax system deserves brief mention.
Use restrictions in this era were characterized by the maturation of the zoning
process, and the decline in importance of restrictive covenants and nuisance laws.
D. The Modern Era. The distinguishing characteristics here are: (a) The emergence of
environmental concerns, with the resulting reversal of earlier policy encouraging
draining and filling and the Trustees beginning to buy (rather than sell) land; (b) The
greatly increased zoning and permit requirements, substantially contracting the rights
and powers of landowners; (c) the growth of multiple interests in property
(condominiums and time-share arrangements); and (d) the 1963 enactment of MRTA and
other curative acts aimed at simplifying property transactions.
During this period zoning matured into a tool of community planning. Fiscal
considerations (who pays for growth) emerge as a major issue, and the role of property
taxes and the Jarvis movement helps to define the political issues. The use of the
eminent domain power expands as government seeks to recapture lands earlier deeded
into private hands. As a consequence, "taking" issues become important What
constitutes a taking as opposed to a non-compensable decline in property values
resulting from the state's exercise of its police power; and what is the measure of "just
compensation" when a taking occurs.
II. Recent Developments.
A. The 1986 Coastal decision throws doubt over the ownership of lands located on or
near potentially navigable waterbodies. The fact that a deedholder may show a clean
chain of title all the way back to a facially absolute deed from the Trustees does not
preclude the State from asserting its sovereignty lands claim. Significantly, the State's
sovereignty lands claim is not limited to currently submerged property. Instead, the
State's claim may reach currently dry land, on the theory that this currently dry land
was once submerged.
Coasta also calls into question land titles for which professional assurance was given
based upon the Marketable Record Title Act ("MRTA"). The damage to MRTA under
Coastal however, was less than what might have occurred under legislation
recommended by the 1986 MRTA study commission.
B. The Final Report of the 1975 Governor's Property Rights Study Commission
recommended that the Legislature pass a system of compensable regulation, which would
provide for compensation to a landowner where a government regulation substantially
diminishes the value of his property even though the government's action does not rise
to the level of a compensable "taking." These and related recommendations were never
In the succeeding decade many property owners have experienced decline in property
values as a result of both environmental regulations (most prominently in coastal
developments) and the practice of down-zoning. Although there have been occasional
landowner victories, more typically the courts will defer to the expertise and discretion
of the regulators (whether county zoning boards or state or regional environmental
regulatory authorities) and hold that no compensable injury has occurred.2
III. Major Contemporary Issues.
A. Land Titles after Coastal. Suggested legislation for the upcoming session seeking
to minimize the long-term impact of the Coastal decision, by avoiding the need for
prolonged litigation to establish the ancient location of the ordinary high water line of
waterbodies which were potentially navigable on March 3, 1845, the day Florida was
admitted to the Union.
1Coastal Petroleum Co. v. American Cyanamid Co, 492 So.2d
339 (Fla. 1986).
2E.g., Graham v. Estuary Properties, Inc., 399 So.2d 1374
A related area of potential concern is the potential impact of Coastal and the MRTA
on Murphy Act lands. While there are no reported cases reaching this issue, in view of
the historic importance of Murphy Act lands it seems likely that the issue will emerge
in litigation over the next few years.
B. Down-Zoning and Environmental Regulation. Zoning is typically done at a local
level, pursuant to Fla. Stat. 125.66. Environmental regulations are typically crafted at
a state, regional or national level. Either has the potential to devalue property.
Two attacks on zoning ordinances emerge. First, challenges alleging that the ordinance
is an unreasonable regulation in violation of the Florida statute delegating the power to
zone to local authorities. Second, Inverse condemnation attacks by landowners arise on
the theory that the zoning regulations amount to a compensable taking. These have
generally failed, although there is some basis for believing that the Rehnquist Court may
become more disposed to rule in favor of landowners.
A principal issue is whether legislative intervention, along the lines suggested by the
Governor's 1975 Study Commission, is appropriate.
Finally, the issue of "amortization of non-conforming uses" may grow in importance.
Traditionally, zoning changes are prospective only. An existing use not in conformity
with the new zoning ordinance is treated as a prior non-conforming use, which is
permitted to continue. Recently some ordinances have sought to eliminate prior non-
conforming uses, without payment of compensation, on a theory of "amortization": The
privilege to operate a non-conforming business results in a competitive advantage akin
to monopoly power (the new ordinance restricts new entrants to the business in the
same area). The ordinance might require that the non-conforming use be eliminated
within, say, five years. The theory is that this quasi-monopoly power will produce
profits over this amortization period sufficient to compensate the landowner for the loss
of his business.
C. Subdivision Exactions. Classically the courts have treated the opportunity of a
landowner to subdevelop as a privilege, not a right. Accordingly, the exercise of this
privilege may legally be conditioned upon the landowner's compliance with reasonable
government regulations. Historically, government has demanded that the subdeveloper
make provision for streets and utilities. More recently, the exercise of the privilege
may be conditioned upon the developer's agreement to dedicate a portion of the tract as
a public park.
The next logical step is for the government to waive the park and to demand the
payment of a cash equivalent, sufficient to permit the government to build a park in
some different part of town. This "Fee in lieu of Dedication" begins to resemble a
direct tax on land ownership. The legal ramifications of this practice, which appears to
be growing throughout the nation, should be examined.
D. Condominium Association Rules. Chapter 718 of the Florida Statutes grant
government-like powers to condominium homeowners' associations. Included are the
powers to tax (by levying special assessments) and to pass rules binding on condominium
owners. Inevitably, some owners will find that their association has passed rules which
result in decreased enjoyment or value.
This raises the potential conflict between the individual liberties of owners versus the
power of the majority to pass rules binding on the minority. The extent to which
courts will intervene in this process is largely unexplored, but is likely to become a
significant issue in the near future.
E. Growth Management Concerns. What happens when a city or county says: we're big
enough, and seeks to prohibit growth under a variety of techniques such as large impact
fees and the use of the permitting system to frustrate new construction. This topic,
closely related to topic C, may well prove to be the distinguishing characteristic of the
A related issue is the "undelegation" by the state of the zoning powers that have
resided at the local level for the last 60 years. Proponents of growth management and
environmental concerns seek to remove the power of these decisions from the local to
the state (or regional or even federal) level.
F. The Role of the Property Tax. There are two theories of property tax. The first
is a notion that a property tax should be limited to a level necessary to provide
protection and service to landowners, that is, to provide for roads, police and fire
protection, and other items needed to carry the essential services needed by all property
owners. The second views property tax as just another potential source of government
revenues. Under this view, it is perfectly appropriate to levy ad valorem taxes to fund,
for example, education and indigent medical care.
The pressure for additional government revenues is evidenced in the 1986 Legislature's
passage of Chapter 86-166, repealing as of July 1, 1987 all exemptions from the general
sales tax. Other states, notably California, facing similar revenue demands have turned
to large ad valorem tax increases. This calls into question the propriety of green belts
established for ad valorem tax purposes, and the likely political effort by urban dwellers
to shift the burden of government to rural areas.
A related fiscal concern is created by President Reagan's new federalism. Revenue
sharing is on the decline, and the recent Tax Reform Act of 1986 largely eliminated the
federal income tax subsidy long associated with real estate construction. Developers
finds themselves squeezed from two ends: federal tax subsidies are declining at the same
time that the demand for impact fees and subdivision exactions are increasing.
The experience of Florida in the land bust era demonstrates that ad valorem taxation
has the potential for destruction of private property. In the words of Chief Justice
John Marshall, the power to tax is the power to destroy.