Justices to Hear Cases on Rights of Property Owners

Outcome could mean win for developers and loss for rent-control proponents. SUPREME COURT

A NEW battle front is opening up in the Supreme Court Jan. 22: The right of property owners to use and profit from their land versus the power of government to protect wetlands and coastlines or to control rents.

Last fall, within a single month, the justices agreed to hear three cases that offer opportunities to strengthen property rights, especially those of land developers.

Although the justices may make only minor shifts in legal doctrine or simply reaffirm the status quo, the fact that they accepted these cases for review signals possible change. All three cases have been decided in favor of government regulation in lower courts.

The court was to hear the first of these cases Jan. 21. In Yee v. Escondido, a mobile-home-park owner in San Diego County argues that the rent control on his lots amounts to a government taking of his property - in effect, a permanent occupation of his property by tenants at reduced rents.

Mobile homes fetch higher prices when sited on rent-controlled lots, so the benefit of the controlled rents goes to the seller.

Without rent control, that benefit would go to the owner of the lot in the form of higher rents.

The park owner, John Yee, argues that the city of Escondido must either compensate him for the revenues lost under rent control or rescind its rent-control law on mobile-home parks.

The city counters that it has a legitimate interest in keeping housing affordable, and Mr. Yee has no legal property-right claim to rents above the rent-control level or the premium it adds to mobile-home prices.

The Yee case is of particular concern to the elderly. Nearly one-quarter of mobile-home residents are over 65 years old. Of the elderly in mobile homes, according to the American Association of Retired Persons, 80 percent have annual incomes under $20,000. A decision in favor of Mr. Yee could threaten protections like the Escondido rent-control ordinance in 32 states, according to the AARP.

Two more property-rights cases are in the wings to be heard this year:

* In Lucas v. South Carolina Coastal Council, a builder bought two beachfront lots for a total of $975,000. He planned to build a house for his own family on one and build a house to sell on the other. But after he bought the lots, South Carolina passed a coastal-management law that forbade new building so close to the beach. His lots became virtually worthless.

David Lucas, the builder, says the state owes him the lost value of the land, since through regulation it took away any economically viable use of it.

If the court decides for Mr. Lucas, the case could put many wetlands, coastal, open-space, and surface-mining regulations "seriously at risk," says Jerold Kayden, a senior fellow at the Lincoln Institute of Land Policy in Cambridge, Mass.

* In PFZ Properties v. Rodriguez, a major developer in Puerto Rico sought and won government approval for a large project with 8,000 hotel units and 8,000 residential units.

The company was stymied for 11 years, however, while a separate agency blocked the permits. PFZ Properties has presented evidence that a key official of the second agency is refusing to process the permits because he personally opposes the project. The company argues that the permitting agency has denied it due process, as guaranteed under the United States Constitution.

These cases pit two strains of conservative thinking against each other on the high court. One is the conservatism of deferring as much as possible to the will of the majority, in other words, to tilt toward the power of government. This strain has dominated court shifts in recent years as the justices rolled back the rights of accused criminals, for example, and tipped the balance of power somewhat back toward police.

The other strain is to strengthen individual rights against the hand of government power - much as the liberal Warren court did in the 1960s - but regarding a different set of rights: property rights.

The court has not taken a major turn in favor of economic rights since the New Deal. After President Roosevelt threatened to expand the court and pack it with his own appointees, the court decided to stop blocking economic regulations, such as minimum- wage laws.

Mr. Kayden, who was a law clerk for former Justice William Brennan, sees several trends converging: Justice Antonin Scalia is a "motivated property-rights judge" who wants to change the law, and his support on the court has probably expanded. Eleven years of Republican presidents have put more property-rights judges on lower courts. Law reviews and law-school faculties have established a stronger intellectual basis for property-rights law in recent years. And government regulations are becoming more intr usive. The court may be ready for a new reckoning of interests.

The balance of power between owners and regulators has not shifted yet, however.

"Property owners are still losing most regulatory cases," meaning 80 to 90 percent of them, says John Delaney, a land-use attorney in Silver Spring, Md. "It's still extremely difficult to prove a taking."