Question

Farmer Bob owns on a farm that his family has lived on and worked for five generations. He had always planned to eventually sell it for his retirement. A large developer wants to buy the farm and build a 1,000 home community. The developer will pay $2 million to Farmer Bob contingent upon the land being rezoned. The local government refuses to change the zoning and will only permit the development of 200 homes. The developer backs out. What does the local government owe Farmer Bob?

Answer 1

The local government does not owe Farmer Bob compensation for refusing to rezone his land because his land still has value and potential uses under the existing zoning, which allows the development of 200 homes.

Step-by-step explanation:

The local government does not owe Farmer Bob any compensation for refusing to rezone his land. When local governments make zoning decisions, they are not typically required to compensate landowners for the impacts of those decisions unless the decision constitutes a "taking" under land use law, which generally means rendering the land without any economically beneficial use. In Farmer Bob's case, the land still has value and potential uses under the existing zoning, which allows the development of 200 homes. Therefore, unless there are specific statutes or court decisions to the contrary in Farmer Bob's jurisdiction, the local government does not owe him compensation just because their zoning decisions prevent him from realizing a particular development opportunity. With farming becoming more expensive and less profitable, particularly for small farms, farmers like Farmer Bob might consider selling their land to developers as a means of retirement. An accurate property title is necessary, and the acreage of the farm must be properly calculated for such transactions. Yet, local government decisions in zoning can heavily influence the value of the land and the opportunities available for its sale.