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North Carolina Supreme Court Holds that Highway Corridor Reservation Maps Constitute Takings

June 16, 2016

By William J. Brian, Jr.

On June 10, 2016, the N.C. Supreme Court held that the recording of highway corridor reservation maps by NCDOT pursuant to a statute known commonly as the Map Act constitute takings of the property rights of the affected landowners for which NCDOT must pay them just compensation.  In so doing, the Court put to rest a controversy which has dogged North Carolina real estate development for almost 30 years.

The Map Act, which was passed in 1987, permits NCDOT to lay out proposed corridors for future highways, and severely restricts the use of any property that shows up in one of the corridors.  It does not require NCDOT to acquire the property affected within any period of time, or at all, and although it does give the affected landowners some tax advantages, and other ways to avoid the corridors, those approaches are very cumbersome and do not adequately compensate for the loss of use of the affected property.  Sometimes corridor reservation maps hang around on record literally for decades before the road actually is built.  The corridor reservation map for the Raleigh outer loop is a case in point.

A group of landowners affected by a corridor reservation map for a beltline project around Winston-Salem filed an inverse condemnation lawsuit against NCDOT over a map it filed affecting their property back in 1997.  Although they lost at the trial court level, because (among other things) NCDOT said the reservation maps were a lawful exercise of its “police power” to protect the people of the state from having to purchase right of way at increased property values over time, the Court of Appeals reversed that decision, and now the Supreme Court has had the final say, upholding the Court of Appeals and stating clearly that the recordation of a corridor reservation map constitutes a taking for which just compensation is owed.

In an admirably simple, straightforward opinion, which nonetheless addressed the most fundamental principles of U.S. Constitutional Law, the Court cited cases going back to the 18th century and the works of John Locke and James Madison, for the propositions that “[t]he fundamental right to property is as old as our state” and that “[f]rom the very beginnings of our republic we have jealously guarded against the governmental taking of property.” The Court went on to note that the value of property is inherently tied to the use that can be made of it, and that if no use can be made of real property, its value has been destroyed.  Since the corridor reservation maps recorded by NCDOT so severely restrict the use of the property they affect, they constitute a taking, even though no physical taking is involved, and may never be involved.  NCDOT’s laudable goal of saving money by preventing land in the area where it hopes to build a road from increasing in value over time, to the ultimate savings of the “people” is not enough to justify rendering the property owned by the individuals affected by maps useless.

In Kirby the N.C. Supreme Court made a strong statement, affirming for North Carolina the fundamental principle which has been recognized by the U.S. Supreme Court and the courts of many other states, that it is not permissible to sacrifice the rights of an individual property owner for what the state has decided is a greater collective benefit – at least when that sacrifice renders that property owner’s land all but valueless.  Of course, it still is incumbent upon the affected property owner to prove that he has been damaged, but if he does, he is entitled to compensation.

The bottom line:

  1. If you own property that is affected by a corridor reservation map (e.g., for the 540 Outer Loop or some similar project), you may be entitled to compensation for a taking of that land by NCDOT.
  2. Keep in mind that if you file an inverse condemnation action, you may be entitled to attorneys’ fees.
  3. This ruling is one of several important rulings made by the N. C. Supreme Court in recent years which favor the rights of landowners over the powers of the State and Local Governments.  Although the opinion in this case was unanimous, in some other cases, the majority have been narrow.  Therefore, the identity of the person who gets elected to the Supreme Court makes a difference.
  4. Whenever you hear the State start talking about its “police powers” it means that you are about to be deprived of something you probably consider to be a fundamental right, usually with minimal due process.  Be careful and make sure you consult an attorney whenever someone says you have no rights because of the “police powers” of the State or Local Governments.