The Supreme Court established several important principles governing the takings impact of regulations.
After a local preservation committee made New York’s Grand Central Station a national landmark, Penn Central was denied the right to build a fifty-story building on arches over the train terminal. New York City allowed Penn Central certain “transferable development rights” to nearby transfer sites, but Penn Central was not satisfied and sued New York City, claiming that its inability to build constituted a taking and a denial of due process. By a 6-3 vote, the Supreme Court found the zoning restriction was not a taking because it did not excessively “frustrate distinct investment-backed expectations,” a phrase created by the Court that found its way into subsequent cases. The Court did not take up transferable rights directly but suggested that such rights might either mitigate the situation so a taking would not occur or act as a form of compensation. It seems obvious that the Court had the value of historic preservation in its collective mind in reaching this unusual decision.
Due process, procedural