Recent Takings Decisions Emphasize a Fundamental Question: What Property Right Did the Owner Actually Have?
Two state high-court decisions have illustrated an important principle in eminent domain and takings law – determining whether government action constitutes a compensable taking often begins with identifying the precise property right affected. In Mata v. North Carolina Department of Transportation, 923 S.E.2d 800 (N.C. 2025), the Supreme Court of North Carolina held that the government’s recording of a transportation corridor map resulted in an indefinite taking of existing property rights. By contrast, in Coalition for Fairness in SoHo and NoHo, Inc., v. City of New York, 2026 WL 88133 (N.Y. Jan. 13, 2016), the New York Court of Appeals concluded that a fee imposed to obtain a new, less-restricted property use did not constitute a taking because the owners did not already possess that right. Although the cases arose in different contexts, both focus on the same threshold question: what property right did the owner possess before the challenged governmental action?
Mata: A Later Rescission Does Not Change the Character of an Earlier Taking
In Mata, the North Carolina Department of Transportation recorded a transportation corridor map in 1996 covering approximately 9.93 acres of the plaintiff’s property. The corridor designation restricted the owners’ ability to improve, develop, and subdivide the property. Those restrictions remained in place for approximately twenty years. In 2016, the North Carolina General Assembly rescinded the State’s Map Act corridors after the North Carolina Supreme Court determined that Map Act restrictions constituted taking requiring just compensation.
The property owners later filed an inverse condemnation action seeking compensation for the restrictions imposed upon their property. The principal dispute became whether the taking should be treated as temporary because the restrictions were eventually removed, or indefinite based on the character of the governmental action when the corridor map was first recorded. The trial court treated the restriction as temporary and calculated damages based on fair rental value. The intermediate appellate court also concluded that the 2016 legislative rescission had transformed the taking into a temporary one, although it applied a different measure of damages. The North Carolina Supreme Court reversed. It held that the corridor map resulted in an indefinite taking of fundamental property rights at the time it was recorded. The legislature’s later decision to rescind the restrictions could not retroactively alter the character of the taking.
The court emphasized that the nature of the interest taken is determined when the taking occurs, not by events that happen years later. Accordingly, the proper measure of compensation was the difference between the property’s fair market value immediately before and immediately after the corridor map recording, considering all pertinent factors, including the indefinite nature of the restrictions and the effect of any reduced ad valorem taxes. Mata therefore reinforces an important principle for property owners – the later removal of a governmental restriction does not necessarily convert an earlier indefinite taking into a temporary one; nor does it eliminate the government’s obligation to pay just compensation.
Coalition for Fairness: A Fee for Obtaining a New Property Right is Not a Taking
The New York Court of Appeals also discussed takings in the case of Coalition for Fairness. Beginning in 1971, New York City designated certain properties as Joint Living-Work Quarter for Artists, or JLWQA units. Those properties permitted qualifying certified artists to live in spaces that otherwise had nonresidential uses and were therefore subject to a restricted form of occupancy. In 2021 the City adopted an ordinance allowing JLWQA owners to convert their properties to unrestricted residential use. Owners who elected to convert were required to make a one-time, nonrefundable payment to an Arts Fund based on the square footage converted. Property owners challenged the fee, arguing that it constituted an unconstitutional condition under the Takings Clause. The intermediate appellate court agreed, but the New York Court of Appeals reversed.
In its decision, the New York Court of Appeals focused on the nature of the property rights the owners possessed before the ordinance. The court found that the properties carried limited rights associated with the JLWQA designation. The ordinance did not take away those existing rights. Instead, it created an optional pathway through which owners could obtain a broader right: unrestricted residential use. The court therefore concluded that the fee did not force owners to surrender property they already possessed. Rather, the owners were seeking to convert property subject to one defined set of rights into property carrying a different and broader set of rights. Because they had no preexisting right to unrestricted residential use, the fee did not constitute a compensable taking on that basis.
The Common Thread: Identify the Property Right First
Mata and Coalition for Fairness demonstrate why defining the property interest at issue is often central to a takings analysis. In Mata, the owners already possessed rights to improve, develop, and subdivide their property, and the government directly restricted those existing rights. In Coalition for Fairness, the owners did not already possess the unrestricted residential-use right they sought to obtain, and the government, in requiring a fee to obtain such a right, did not extinguish the owners’ property interests. For property owners facing governmental regulations or land-use restrictions, these decisions underscore the importance of examining the precise bundle of rights associated with the property immediately before the challenged governmental action. That inquiry may determine not only whether a taking has occurred, but also when it occurred and how just compensation should be measured.
