Justice as fairness: a Rawlsian perspective in compensating regulatory land takings
| DOI | https://doi.org/10.1108/JPPEL-11-2021-0054 |
| Published date | 14 June 2022 |
| Date | 14 June 2022 |
| Pages | 45-60 |
| Subject Matter | Property management & built environment,Building & construction,Building & construction law,Real estate & property,Property law |
| Author | Edward S.W. Ti |
Justice as fairness: a Rawlsian
perspective in compensating
regulatory land takings
Edward S.W. Ti
Yong Pung How School of Law,
Singapore Management University, Singapore, Singapore
Abstract
Purpose –The purpose of this paper is to articulate the inherent unfairness in compensation outcomes
between landowners whose land is physically taken versus those whose landis regulated. Using Rawlsian
theory as the normative standard of “fairnessas justice”, the paper argues that both physical and regulatory
takings shouldbe compensated.
Design/methodology/approach –Most jurisdictions invariably provide market price compensation
when land is physically acquired. When land is not physically taken but merely subject to regulation,
however, there is no corresponding need to compensate, even where the economic loss suffered by the
landowner is the same. Adopting Rawlsiantheory, this paper explains why justice and fairness in land use
planningrequire both physical takings and regulatorytakings to be equally compensable.
Findings –Applying Rawlsian theory to compare compensable compulsory purchase with non-
compensableregulatory takings of land show that thelatter is not compatible with an ethical planningpraxis.
Originality/value –While Rawlsian theory has been applied in urban planning research before, this
would be its first applicationin highlighting the apparent justice paradox whichnow distinguishes a physical
and regulatorytaking of land.
Keywords Planning law, John Rawls, Just compensation, Land regulation, Planning theory,
Regulatory takings
Paper type Research paper
1. Introduction
Is it right that governments pay compensation when land is compulsorily purchased or physically
taken but not when land is rendered less valuable through regulation?This inquiry is significant
to landowners subject to regulation (insofar as it restricts or preve nts the use of their property) and
more broadly, provides a governance framework to promote internal consistency by treating like
cases alike. In this paper, I adopt a Rawlsian analysis (Rawls, 1971) to explain why the concept of
justice as fairness requires regulatory land takings to be made compensable in the same way that
physical land acquisitions are. I do this by considering wh at the dramatis personae, conceived by
Rawls –indifferent decision makers stripped of their biasness, would decide. The stage or context
adopted for the Rawlsian actors is an Anglo-Saxon common law world.
The principle that private property in species at least, should not be taken by the state
without compensationhas emerged as a settled feature of legal doctrine in both common law
and civilian systems since at least the 17th century (Harris, 1996,p.95).InDirector of
Buildings and Lands vShun Fung Ironworks Ltd [1], Lord Nicholls in the Privy Council
stated that hand in hand with the power to acquire land withoutthe owner’s consent was an
axiomatic obligationto pay “fair and full”compensation (p. 125). In the House of Lords, Lord
Pearce declared in Burmah Oil Company (Burma Trading) Ltd vLord Advocate [2], that
Regulatory
land takings
45
Received26 November 2021
Revised13 May 2022
24May 2022
Accepted24 May 2022
Journalof Property, Planning and
EnvironmentalLaw
Vol.14 No. 2/3, 2022
pp. 45-60
© Emerald Publishing Limited
2514-9407
DOI 10.1108/JPPEL-11-2021-0054
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/2514-9407.htm
“It is plainly just and equitablethat, when the state takes or destroys a subject’s propertyfor
the general good of the state it shall pay him compensation”(p. 149).Similarly, in the Privy
Council’s decision in in Government of Malaysia vSelangor Pilot Association [3], Lord
Salmon held that laws authorizing the taking of property without compensation are
generally recognizedas “repugnant to justice”(p. 356).
The right to be compensatedfor takings of property is constitutionally protected in many
parts of the Commonwealth (Allen, 1993, p. 523). Specifically, 31 of the 54 member States
(The Commonwealth, 2022) include a right to propertyin their Constitutional Bill of Rights,
thus affording market-price compensation if a physical taking of land occurs. In the USA,
while compensation for physical takings are constitutionally protected by the 5th
Amendment to the Federal Constitution, regulatory takings of property are not
commensurate and are limitedto cases resulting in complete or very substantial loss in land
value (Penn Central, 1978) [4]. Even in jurisdictions without a constitutional right of
property, compensation for a physical taking is given. In the UK, various Parliamentary
Acts such as the Land Compensation Act 1961, the Compulsory PurchaseAct 1965 and the
Planning and CompulsoryPurchase Act 2004 [5] guarantee compensation on the principle of
“equivalence”, meaning that the compensationis meant to leave the landowner no worse off
or better off in financial terms after the acquisition. In Canada, Section 26 of the
Expropriation Act 1985 providesthat the Federal government must compensate the affected
landowner with market value for the land taken, including any decrease in value of the
remaining property of the owner. In the EU, member State attempting to acquire land
without compensation is a breach of the European Convention of Human Rights (Case of
Sporrong and Lönnroth vSweden)[
6]. In short, governments across the globe must pay fair
value to physically acquireland from landowners.
1.1 The disconnect between physical and regulatory takings of land
A landowner free to develop his land as he wishes before the imposition of public controls, finds
himself prohibited from doing so as a consequence of the controls. The title to his ownership of an
estate or interest in the land is not disturbed or called into question in any fundamental way –he
owns what he had previously [...] Nevertheless, the powers of ownership are not what they were
in all their fullness. He cannot legally do now what before he was at law and at liberty to do. His
rights have been curtailed. He has lost something [...] The right to develop the land in a specific
way has been taken away from him. If in having that particular right, now abstracted from the
complement of the range or property rights and in and through which the plenary power of
property exists, he possesses property, then the imposition of the public control is an act of
expropriation. (Denman, 1978, pp. 4–5)
In this paper, I use the nomenclature of compulsory purchase to describe the act of
government paying compensation when privately owned land is physically taken or
acquired. While incontrovertiblethat a physical taking of land should attract compensation,
it is interesting to note that virtuallyno jurisdiction provides compensation as-of-rightwhen
privately owned land is not physically acquired but “merely”rendered less economically
valuable. I refer to such planning laws as regulatory takings, which may be understood to
mean any law that directlyrestricts, but does not involve, the physical taking of privateland
(Ti, 2019a). The imposition of reduced building height restrictions would constitute a
regulatory taking –so too would rezoning land previously granted permission for a high
economic value use (commercial) to a lower economic value use (agriculture). Limiting the
definition to ordinances which have a “direct effect”on the lot also means that a planner’s
decision to create a new downtown would not be a regulatory taking to the landowners
adversely affected (i.e.in the old downtown), even if regulation was involved, as such effects
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