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Three-Factor Regulatory Takings Test
The court must evaluate a regulatory takings claim based on:
- the regulatory impact of the decision
- the owner's reasonable investment-backed expectations
- character of the regulatory action
Penn Cent. Transp. Co. v. New York City, 434 US 983 (1977)
"The New York City Landmarks Preservation Law of 1965 empowered the city to designate certain structures and neighborhoods as "landmarks" or "landmark sites." Penn Central, which owned the Grand Central Terminal (opened in 1913), was not allowed to construct a multistory office building above it. The issue in the case is whether the restriction against Penn Central constitute a 'taking' in violation of the Fifth and Fourteenth Amendments? The Court held that the restrictions imposed did not prevent Penn Central from ever constructing above the terminal in the future. New York's objection was to the nature of the proposed construction and not to construction in general implemented to "enhance" the Terminal. Preventing the construction of a 50-plus story addition above the station was a reasonable restriction substantially related to the general welfare of the city."
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