Through a Glass Darkly: Measuring Loss Under ... - Land Use Law

608 THE URBAN LAWYER VOL. 39, NO. 3 SUMMER 2007
restriction on use by enactment of a land use regulation or by action
confirming that restriction on use.” 146
The solitary role reserved for the word “enforcement” within subsection
197.352(2) is for those cases where the land use restriction is
applied to property in an unexpected or discretionary way. In such cases
active enforcement, rather than the enactment itself, supplies the facial
effect, and hence, causes devaluation in land value. Sercombe concludes
his textual argument by saying: “The facial application of the regulation
is what largely produces this market effect. Because of this, it is reasonable
to construe the compensation formula under [subsection] 197.352(2)
as based on the value reducing effects of enactment of the land use
restriction.” 147
By referring to eminent domain law, Sercombe attempts to support
his argument that the compensation should be confined to the facial
effects on the property’s fair market value and the “losses from that
reduction in value up to the point of the claim.” 148 Sercombe contends
that a “compensation formula that updates the past reduction in value
is consistent with the valuation awarded in regulatory takings cases.” 149
Drawing an analogy with the irregularly invoked doctrine of temporary
regulatory takings, he highlights the use of a “market rate of
return or interest rate as an acceptable measure of return on a use
limitation and reliance on comparable sales as the measure of difference
in value.” 150 Combining his interpretation of the words “enacts or
enforces” in subsection (1) with the rate of return multiplier drawn
from the regulatory takings analogy, Sercombe summarizes his valuation
method as follows: “[T]he difference in fair market value of the
property with and without the regulation, measured at the time of the
‘taking’ (enactment or implementation of the regulation) and a return
on that loss between the time of the ‘taking’ and the demand for
compensation.” 151
C. Conceptual Category Three:
An Alternative Interpretation
Although there is much that is convincing about Sercombe’s argument,
his concentration on the reduction in fair market value resulting
146. Sercombe, supra note 122, at 14.
147. Sercombe, supra note 122, at 14 (emphasis added).
148. Id.
149. Sercombe, supra note 122, at 17.
150. Sercombe, supra note 122, at 20.
151. Id.
ABA-TUL-07-0701-Sullivan.indd 608
9/18/07 10:43:45 AM