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Eminent Domain, Inverse Condemnation and the Transportation Corridor Official Map Act of North Carolina

Recently, after a long court battle, the North Carolina Court of Appeals ruled in favor of land owners whose properties were basically frozen in time. The name of the case is Kirby v. North Carolina Department of Transportation.

Under a law called the Transportation Corridor Official Map Act (The Map Act), the Department of Transportation filed maps showing that the properties may be in an area where a highway “loop” might be built around a city at some point in the future. The Map Act allowed the Department of Transportation to file maps with the county Register of Deeds showing property that might become part of a highway. Once the map was filed, the Map Act would freeze development on the land by essentially denying the landowner any sort of building permit.

After their land was frozen, the Act would only allow the landowners to get a building permit if one was not issued within three years of the application date, or if the landowner could prove that a variance should be granted because “no reasonable return may be earned from the land.” A final option for the landowner under the Map Act would be to petition the Department of Transportation to buy the land due to the hardship imposed by the restrictions on building.

The Court of Appeals went through a lengthy discussion about the history of land condemnation law, and the fact that the State does have the power to take an individual’s property for the public good, and then pay the individual for the property. These takings come under the State’s power called eminent domain.
The Department of Transportation argued that the restrictions created by the Map Act were not an exercise of eminent domain but were more like zoning which is an exercise of the State’s police power. The Court explained that not all restrictions on land require compensation; the issue comes down to why the State wants to restrict the land.

The question is whether the state action protects the public or provides for the public. If land is restricted because of harmful activity that might be conducted on the land, which could hurt the public around the land, it is considered an act under the State’s police power. An example of this would be restrictions or zoning that prohibit a chemical company from building next to a residential area. However, if the restriction on land is to use the land for the benefit of the public, like constructing a highway, the State is using the power of eminent domain and must pay for the land.

In the Kirby case, despite a lot of arguments by the Department of Transportation that the Map Act was a permissible land use restriction, the Court saw that the restrictions were not to prohibit harmful activity by the landowner, but to drive down the value of the land in the future. The Court even pointed out that when the Legislature passed the Map Act, they said that it was “an act to control the cost of acquiring rights-of-way for the State’s highway system.”

The United State Constitution, as well as the North Carolina Constitution require the government to pay “just compensation” when taking land for public purposes. Thankfully, the court system protects landowners’ rights, and would not allow the State Legislature and the Department of Transportation to drive down property values years before building a highway.  Chalk one up for the Constitution and the rights of individual landowners.

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