The Court has repeatedly recognized that governments can misuse land-use permits to avoid their obligations under the Takings Clause. In response, the Court has limited governments from conditioning a land-use permit on the landowner surrendering a property right.
As this case demonstrates, however, municipalities and counties have devised schemes to evade the prohibition on uncompensated takings. Here, the City of West Hollywood implemented a zoning ordinance that requires developers who build multi-unit housing either (1) to sell or rent a percentage of that housing at below-market prices or (2) to pay an “in lieu” fee that West Hollywood calculates using a formula created by statute.