MONROE COUNTY
MARATHON WEEKLY / OCTOBER 11, 2018
The Rock & The Hard Place: Competing Policies Monroe County and local municipalities are stuck between two competing policies — the need to build more affordable housing, and the need to protect the taxpayer from expensive takings lawsuits. “The position of the county attorney’s office is that each affordable housing allocation has a value for resolving a potential takings claim. We have made the recommendation to the Board of County Commissioners that they should distribute these allocations judiciously with that in mind,” said County Attorney Bob Shillinger, referring to the discussion of “beneficial use” in the main body of this article. The issue is further complicated by the fact that some entities, such as the county, have many affordable building rights stockpiled that could be of use, for example, for a development in the Village of Islamorada. Once upon a time it was a fairly simple process for the county to transfer these rights to a city simply by asking; now, not so much, because of the “exposure” concept that has everything to do with finances. “Think of it as a Monopoly board with all the little green houses,” Shillinger said. “If you put all the houses on the Baltic and Mediterranean properties, and none on Boardwalk, and Park Place, then all of those are vulnerable to takings cases.” In other words, taking 70 affordable housing rights and clustering them on two large pieces of property potentially leaves 68 other lots “exposed” when it comes to takings lawsuits. But because of the very nature of building affordable housing developments — shared walls, driveways and pools and other economies of scale — it’s often financially necessary to build with high densities. So while it may seem like a nobrainer to issue as many affordable housing building allocations as soon as possible to address the housing crisis in the Florida Keys, there is a also a reason to hold on to them — or as some say, “hoard” — to protect against future takings lawsuits wherein a property owner could theoretically be legally appeased with an affordable housing right deemed “beneficial use.”
But will that rationale stand up in court? The takings lawsuit can only go one of two ways: the government prevails and the property owner is deprived of his or her building rights; or the property owner prevails and either receives a settlement (compensation), or the right to build. Key West attorney David Paul Horan started his career in the Keys back in the 1970s as a Monroe County assistant attorney. He said he was so vocal about how much authority Monroe County was turning over to the state, in matters of the Area of Critical Concern and Rate of Growth Ordinance, that his position was “eliminated.” Horan was promptly hired by the City of Key West to continue the same fight. “This is what I was saying was going to happen if we continued down this path. When we ran out of building right allocations on property people have been paying taxes on for all this time, we were going to face takings lawsuits,” Horan said. “And that’s what it ended up being. I told everyone, ‘You are signing checks that our grandchildren will not be able to cash. Ultimately, you are going to have to tell all these people you screwed up, you trusted us, and you’re not going to be able to use this property. It was an implicit promise, but we were fibbing to you, and we are not able to protect you.’” Monroe County Attorney Bob Shillinger and other municipal attorneys and planning directors in the Keys say not every person who has a vacant lot in the Keys is eligible to take part in, or benefit from, a takings lawsuit. For example, a property owner in possession of wetlands should have no reasonable expectations of building a home there. “Not every owner of a vacant lot that doesn’t get a (building permit) will have a takings claim. It’s a very factintensive process that involves the investment-backed expectations and efforts of the owner,” Shillinger said. For example, a property owner who has at one time or another applied for a building permit would be in better settlement position than one who
never applied. “But the individual calculation sometimes depends on factors that are not knowable to us. The property owner could have expenditures on an architect or engineers, and the county would know nothing about it,” Shillinger said. If takings lawsuits came to pass in the Keys, whom would local property owners be suing? Would “Jill and Joe” sue the City of Marathon for the inability to build on a lot on Grassy Key located within the town limits because the state has told the city not to issue any more permits? Would Jill and Joe sue Monroe County for agreeing to pass restrictive growth management measures mandated by the state? Or would property owners sue the State of Florida for imposing the Area of Critical Concern and the Rate of Growth ordinance in the first place? It will be a combination of all three, most likely. Monroe County’s position on who is responsible is crystal clear. “The state, because they imposed the restrictions,” said Shillinger. “They are going to be jointly, if not exclusively, liable.” The county attorney said that theory will be tested in the next couple of years as the 2023 deadline approaches. Or sooner, as the mid-term elections in November will see a new set of leaders elected to office in Tallahassee. “How solid will their commitment be? And there could be litigation where the county sues the state for additional funds. We hope it doesn’t come to that.” Horan said the arguments could encompass the constitutionality of the original agreement. “When the Monroe County Commission was passing all the rules and regulations that the state Department of Community Affairs wanted them to pass, my advice was don’t do it,” he said, referring to the state Department of Economic Opportunity’s predecessor, in charge of development
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in the Keys. “I told them, ‘Let the state do it’ because otherwise the county is the ‘taking’ agency. The argument that the DCA made us do that won’t hold because the counter-argument is that the DCA can’t make the county do something unconstitutional. I’ve filed pleadings like that before.” But, back in 1992, the state wasn’t going to allow any permits at all until Monroe County developed its new land use laws. There’s one more very expensive fact to consider. Even if the state is found liable — it loses the court takings case — the state has no legal obligation to pay. Just as the legislature cannot tell a judge how to rule, the courts cannot tell the legislature to fund a claim. The concept of separation of powers prevents the courts, where the taking claims will be determined, from ordering the legislative branch to pay. There’s an exception to this rule; a settlement in the amount of $250,000 or less is automatically paid in Florida. But when the amount is higher than that, it requires a special act of the state legislature. There are probably thousands of those cases that have been filed, but never funded, or paid. A good example of that is the citrus canker case involving 84,000 households in Broward and Palm Beach who will split $42 million. In 2008, they won the class-action lawsuit, but they waited another decade before the state funded the settlement. The attorney fees in eminent domain or takings case are often as high as the value of the property being fought over — hundreds of thousands of dollars. It is the government’s “disincentive” for these types of lawsuits. How many vacant lots are left in the Keys and what is their value? Using the high side of the equation, there could be as many as 10,000 buildable lots left in the Florida Keys. In 2018, the average lot cost is $200,000. The value of the buildable lots, then, is about $2 billion in 2018. At least that’s the value of the property five years before the state has told the Keys there will be no more new development.
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