If North Carolina forces me to leave a strip of my riparian land as a buffer to protect the Neuse River, is that a regulatory taking that requires the state to pay me?

Plain-English summary

DEHNR General Counsel Richard Whisnant asked the AG two questions about the Environmental Management Commission's proposed nutrient-sensitive-waters (NSW) buffer rules for the Neuse River watershed. The rules would require riparian property owners to set aside a strip of land along the river and its tributaries as a vegetated buffer to filter non-point-source pollution. Question one: did this require compensation under the Fifth Amendment's Takings Clause? Question two: did the existing EMC variance procedure under G.S. § 143-215.3(e) provide adequate relief when the rule was particularly burdensome?

Senior Deputy AG Daniel C. Oakley and Assistant AG Robin W. Smith answered: generally no taking, but the variance procedure didn't fit.

On the takings question. The AG walked through the U.S. Supreme Court's regulatory-takings framework. Two categories triggered per-se compensation: physical invasions (Loretto v. Teleprompter, 458 U.S. 419) and deprivation of all economically beneficial use (Lucas v. South Carolina Coastal Council, 505 U.S. 1003). Outside those two categories, courts apply a case-by-case balancing test. NC's standard from Finch v. City of Durham, 325 N.C. 352, asked whether the regulation was a legitimate police-power exercise and whether the affected property retained "a practical use and a reasonable value." That mirrored the U.S. Supreme Court's standard in Agins v. City of Tiburon, 447 U.S. 255.

Critically, the AG emphasized the Penn Central "parcel as a whole" rule: a takings analysis looks at the entire property, not just the slice subject to the regulation. A 100-acre tract with a 50-foot riparian buffer along its waterfront edge retains nearly all of its development potential; the buffer rule does not destroy the practical use of the tract as a whole. The AG cited four cases upholding buffer or open-space requirements: Agins (zoning open space), Responsible Citizens v. City of Asheville (flood plain), Threatt v. Fulton County (50-foot stream buffer), and Quirk v. Town of New Boston (campground buffer).

The AG also distinguished one outlier line: mandatory dedications. Under Dolan v. City of Tigard, 114 S. Ct. 2309, when government requires the property owner to dedicate property for a public purpose, courts apply a stricter "essential nexus" and "rough proportionality" standard. The AG noted that Dolan's heightened scrutiny applied only to mandatory dedications and did not change the analysis for buffer-style use restrictions.

On the variance question. The variance procedure in G.S. § 143-215.3(e) was tied to permits issued under G.S. §§ 143-215.1 (water-pollution permits) and 143-215.108 (air-pollution permits). The buffer requirement was neither a water-quality standard nor a classification under G.S. § 143-214.1, so the standard variance pathway did not apply. The AG suggested the rules themselves had a workable substitute: proposed Rule 15A NCAC 2B.0235(c) authorized a matrix of Best Management Practices as buffer alternatives, and 2B.0235(d) created an advisory committee with authority to approve site-specific alternatives. Unlike a variance (which generally requires showing undue hardship), the 2B.0235 alternatives were available whenever the property owner could achieve equivalent water-quality protection through other means. That made the alternatives provisions broader, not narrower, than a variance.

Currency note

This opinion was issued in 1996. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here. The Neuse buffer rules were adopted in 1997 and have been amended several times since, including by legislative interventions and successor watershed-specific buffer programs (Falls Lake, Jordan Lake). The U.S. Supreme Court's regulatory-takings jurisprudence has also developed since 1996, including Murr v. Wisconsin (2017) on the parcel-as-a-whole question. Anyone analyzing a current riparian-buffer takings claim should check both the current state buffer rule text and the current federal takings doctrine.

Background and statutory framework

The Neuse River watershed in eastern NC had suffered severe algal blooms and fish kills in the early 1990s, attributed in significant part to nutrient loading from non-point-source runoff. The Environmental Management Commission proposed a suite of NSW rules to address this, including a riparian-buffer requirement. The buffer was the most politically charged element because it directly affected private landowners' use of land near streams and rivers.

The constitutional question was whether the buffer was a "taking" within the meaning of the Fifth Amendment. The state had two regulatory backstops: it could impose the rule as a police-power exercise (no compensation owed if the rule was reasonable and left practical use intact), or it could acknowledge the rule as a taking (compensation owed). The AG's analysis pointed strongly toward the police-power side.

The variance question was more procedural but no less important. NC's EMC variance procedure in G.S. § 143-215.3(e) was the standard relief valve for industrial dischargers who could show "serious hardship without equal or greater benefits to the public." But that valve was statutorily tied to discharge permits, not to land-use rules like the buffer. The AG's reading meant relief for burdened landowners had to come through the alternatives mechanism in the rules themselves.

Common questions

Does the buffer take all the use of my riparian strip?

For the buffer area itself, yes, you cannot develop it for most uses. But under the Penn Central "parcel as a whole" rule, the takings analysis looks at the entire tract. If your 10-acre tract has 0.5 acres in the buffer and 9.5 acres of usable upland, courts will find no taking because the property retains practical use and reasonable value as a whole. The opinion was clear that only when the entire tract loses all practical use does Lucas apply.

When does the buffer rule cross the line into a taking?

The AG identified two categories where compensation is always required:

1. Physical invasion under Loretto. Government literally puts something on your property, even something tiny.
2. Total deprivation of economically beneficial use under Lucas, unless the regulation simply codifies common-law nuisance or property rules.

A riparian buffer that leaves most of the parcel usable does not fit either category. A buffer that consumes the entire parcel (e.g., a small lot that is entirely within the buffer zone) might. The case-by-case nature of takings analysis means each parcel is its own question.

What is the "essential nexus" and "rough proportionality" standard?

That is the Dolan v. City of Tigard standard for exactions, where government requires the owner to dedicate property for a public purpose (like a bike-path easement) as a condition of approving development. Dolan requires that (a) the dedication serve a legitimate state interest connected to the development being approved, and (b) the burden of the dedication be roughly proportional to the impact of the development. The AG was careful to say Dolan did not apply to buffer rules of general application, because those rules are not exactions of property for a public use.

Did the AG say there could never be a buffer taking?

No. The AG's analysis was general. A specific landowner could still bring an as-applied takings challenge showing that, on the particular facts of his parcel, the buffer destroyed the practical use of the property as a whole. The AG's "no taking" answer was at the rule level, not at the as-applied level.

Why didn't the variance procedure work?

The variance procedure was statutory, tied to specific permit programs (water-pollution permits, air-pollution permits). The buffer rule was a different kind of regulation, neither a permit nor a water-quality standard. The AG read G.S. § 143-215.3(e) literally and concluded it did not reach the buffer.

What relief did the AG say a burdened landowner could get?

The rules themselves (proposed Rule 15A NCAC 2B.0235(c) and (d)) created two alternative mechanisms: a Best Management Practices matrix and a site-specific advisory-committee process. Both were available whenever the landowner could achieve equivalent water-quality protection through alternative means. The AG noted that these mechanisms were actually broader than a variance because they did not require proof of hardship, only equivalent protection.

Source

• Landing page: https://ncdoj.gov/opinions/takings-implications-of-buffer-requirements/

Citations

• N.C. Gen. Stat. § 143-214.1
• N.C. Gen. Stat. § 143-215
• N.C. Gen. Stat. § 143-215.1
• N.C. Gen. Stat. § 143-215.108
• N.C. Gen. Stat. § 143-215.3(e)
• U.S. Const. amend. V
• Proposed Rule 15A NCAC 2B.0235(c)
• Proposed Rule 15A NCAC 2B.0235(d)
• Keystone Bituminous Coal Assn. v. DeBenedictus, 480 U.S. 470 (1987)
• Penn Central Transportation Co. v. New York City, 438 U.S. 104 (1979)
• Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982)
• Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992)
• Finch v. City of Durham, 325 N.C. 352, 384 S.E.2d 8 (1989)
• Agins v. City of Tiburon, 447 U.S. 255 (1980)
• Responsible Citizens v. City of Asheville, 308 N.C. 255, 302 S.E.2d 204 (1983)
• Threatt v. Fulton County, 467 S.E.2d 546 (Ga. 1996)
• Quirk v. Town of New Boston, 663 A.2d 1328 (N.H. 1995)
• Dolan v. City of Tigard, 114 S. Ct. 2309 (1994)

Original opinion text

November 18, 1996

Mr. Richard Whisnant
General Counsel
Dept. of Environment, Health and Natural Resources
P.O. Box 27687
Raleigh, N.C. 27611

Re: Advisory Opinion: Takings Implications of Buffer Requirements in Proposed Nutrient Sensitive Waters Rules for the Neuse River Watershed

Dear Richard:

We are responding to your questions concerning the buffer requirement in the Environmental Management Commission's proposed nutrient sensitive waters (NSW) rules for the Neuse River watershed. Below, we have set out the questions and provided a brief answer. A more general discussion as background to those responses then follows.

QUESTIONS AND ANSWERS

Question 1. Does the requirement that certain riparian property owners set aside property as a buffer for non-point source pollution constitute a regulatory "taking" of private property requiring due process and compensation?

Answer: The general rule is that as long as the application of a rule does not destroy all practical use and reasonable value in the property as a whole (looking at the entire tract and not just the portion of the property affected by the rule), there will be no "taking" of property within the meaning of the Fifth Amendment of the United States Constitution. Under this standard, both buffer and open space requirements have been upheld against "takings" challenges.

Question 2. Does the Environmental Management Commission's variance procedure provide an adequate means of addressing those situations in which application of the rules proves to be particularly burdensome to an individual property owner?

Answer: No. The variance procedure set out in N.C.G.S. § 143-215.3(e) is available only to persons subject to the provisions of N.C.G.S. § 143-215.1 and 143-215.108 (which establish the water and air pollution permit requirements) for purposes of varying water quality standards and classifications. Although some property owners within the Neuse River watershed may require state stormwater permits, the buffer requirement is neither a water quality standard nor a classification. Similar relief will be available, however, under two provisions of the proposed Neuse River rules allowing approval of alternatives to the buffer.

ANALYSIS

The Fifth Amendment to the United States Constitution states as follows:

No person shall be held to answer for a capital or otherwise infamous crime, unless on a presentment or indictment of a grant jury, except in cases arising in the land or naval forces, or in the militia, when in actual service in time of war or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be denied life, liberty or property, without due process of law; nor shall private property be taken for public use without compensation.

[Emphasis added.]

The United States Supreme Court has long held that regulations that "go too far" may constitute a taking under the Fifth Amendment. The Takings Clause does not, however, require government to compensate property owners for every reduction in property value caused by regulatory action. The Court's decisions recognize that to require compensation for every impact on property values would make environmental and land use regulation impossible. As the Court noted in Keystone Bituminous Coal Assn. v. DeBenedictus, 480 U.S. 470, 491-492 (1987):

Long ago it was recognized that all property in this country is held under the implied obligation that the owner's use of it shall not be injurious to the community and the Takings Clause did not transform that principle to one that requires compensation whenever the State asserts its power to enforce it.

Thus, the Takings Clause allows both state and federal government agencies wide latitude to regulate for the public health, safety and welfare without compensating for incidental impacts on property values.

The Court has also long held that a proper "takings" analysis must consider the impact of the regulation at issue on the entire property and not merely on the affected portion of the property. In Penn Central Transportation Co. v. New York City, 438 U.S. 104, 130-131 (1979), the Court held that:

"Taking" jurisprudence does not divide a single parcel into discrete segments and attempt to determine whether rights in a particular segment have been entirely abrogated…[but rather] in deciding whether a particular government action has affected a taking, this Court focuses…[on] the parcel as a whole.

Thus, the Court has reviewed buffer or open space requirements in light of the effect of the requirement on the entire parcel of property and not merely the part of the property set aside to meet the requirement.

As to the standard applied in regulatory takings cases, the Court has identified only two categories of cases where compensation will in every instance be required:

• Where the regulation requires the property owner to suffer a physical "invasion" of his property – no matter how minor. Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982). [New York law requiring landlords to allow television cable companies to place facilities in their buildings constituted a taking even though the utilities occupied no more than 1 1/2 cubic feet]; and
• Where the regulation denies all economically beneficial or productive use of the land (unless the regulation simply codifies established common law principles of nuisance or property law). Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992).

Outside of those two categories of per se takings, courts review takings claims on a case by case basis. The standard has been stated slightly differently in different courts. The North Carolina Supreme Court has held that the appropriate standard for review of a regulatory takings claim is whether: (1) the regulation constitutes a legitimate exercise of the police power; and (2) the affected property retains "a practical use and a reasonable value" after application of the regulation. Finch v. City of Durham, 325 N.C. 352, 364, 384 S.E.2d 8 (1989). This approach essentially tracks the United States Supreme Court's analysis in Agins v. City of Tiburon, 447 U.S. 255 (1980).

Other decisions describe the standard as a three-part test: (1) the economic impact of the regulation; (2) the extent to which the regulation interferes with reasonable investment-backed expectations for the property; and (3) the character of the government action (i.e. the degree of harm that the regulation seeks to prevent). See, e.g., Penn Central, 483 U.S. 104. In practice, courts have reached very similar results in applying either formulation of the standard. Courts have tended to find that no taking has occurred so long as the regulation has a legitimate public purpose and the affected property retains both use and reasonable value — even if the value of the property has been substantially reduced.

There have been a number of decisions in both state and federal courts specifically upholding open space and buffer requirements against takings challenges. See, e.g., Agins v. City of Tiburon, 447 U.S. 255 (1980) [open space and density restrictions in zoning ordinance]; Responsible Citizens v. City of Asheville, 308 N.C. 255, 302 S.E. 2d 204 (1983) [flood plain ordinance]; Threatt v. Fulton County, 467 S.E. 2d 546 (GA 1996) [fifty-foot stream buffer]; Quirk v. Town of New Boston, 663 A2d 1328 (N.H. 1995) [campground buffer zone].

One line of cases must be distinguished from the mainstream of regulatory takings decisions. Courts have tended to review requirements that a property owner dedicate property for a public purpose (such as future road expansion) under a more stringent standard. Since these "exactions" have some of the characteristics of an actual appropriation of property, they have attracted a higher degree of scrutiny. The standard applied in exaction cases, most recently in Dolan v. City of Tigard, 114 S.Ct. 2309 (1994), requires that there be an "essential nexus" between a legitimate state interest and the exaction requirement and "rough proportionality" between the impact of the exaction and its benefit. The standard described in Dolan has been applied by the Court only in review of mandatory dedication requirements.

With respect to your second question, a property owner who may be unduly burdened by the buffer requirement would not have recourse to the existing variance procedure set out in N.C.G.S. § 143-215.3(e). The statute makes the variance procedure available only to persons subject to the permitting provisions of N.C.G.S. § 143-215.1 and § 143-215.108. Many of the persons subject to the buffer requirement do not require water quality permits. As applied to the water quality program, the statute further limits the subject matter of a variance request to the rules, standards and limitations established pursuant to N.C.G.S. § 143-214.1 (water quality standards and classifications) or 143-215 (effluent standards and limitations). The Neuse River buffer rules do not fall into either of those categories.

The proposed buffer rules, however, include at least two means of approving alternatives to the buffer. Under the proposed Rule 15A NCAC 2B.0235(c), the Environmental Management Commission may develop a matrix of Best Management Practices as alternatives to the buffer. The rule also proposes, in 2B.0235(d), to create an advisory committee with authority to approve buffer alternatives on a site-specific basis. These provisions allow for some flexibility in application of the buffer requirement so long as the property owner can achieve an equivalent level of water quality protection through alternative means.

The key difference between the alternatives provisions in proposed 2B.0235 and a variance is that variances are generally limited to persons who will suffer an undue hardship if required to comply with a rule. The EMC may approve a variance under N.C.G.S. § 143-215.3(e), for example, only on finding that compliance with the rule at issue "would produce serious hardship without equal or greater benefits to the public". The alternatives provisions in 2B .0235 do not identify the existence of a hardship as either a prerequisite for approval of a buffer alternative or a factor to be considered in reviewing an alternative proposal. As a result, the relief provided under 2B .0235(c) and (d) will be more broadly available than a variance.

The core inquiry in a regulatory takings case is whether a regulation as applied to a particular property is so unduly burdensome as to be confiscatory. Outside of the two categories of per se takings identified by the United States Supreme Court, courts generally attempt to balance the burden on the property owner and the public interest. The alternatives provisions appear to provide an adequate procedure to address those cases in which application of the buffer requirement will be unduly burdensome and equivalent water quality protection can be provided in another way.

If we can provide additional clarification, please call.

Daniel C. Oakley
Senior Deputy Attorney General

Robin W. Smith
Assistant Attorney General