Jump to Navigation
Jump to Content

Cienega Gardens v. United States

Citation: 33 ELR 20221
No. No. 02-5050, (Fed. Cir., 06/12/2003)

The court holds that real estate developers who voluntarily participated in U.S. Department of Housing and Urban Development (HUD) low-income housing programs suffered a compensable, temporary, regulatory taking under the Fifth Amendment when the U.S. Congress enacted the Emergency Low-Income Housing Preservation Act (ELIHPA) and the Low-Income Housing Preservation and Resident Homeownership Act (LIHPRHA). The developers argued that when Congress enacted the ELIHPA and the LIHPRHA, it abrogated their contractual rights to prepay their 40-year mortgage loans after 20 years. In doing so, they argued, the government prevented them from regaining possession and control of their real estate because only extinguishment of their mortgages released the developers from the HUD low-rent housing programs. The trial court erred in holding that the developers had no vested property rights when the two Acts were enacted despite their two agreements with lenders and HUD and despite their ownership in fee simple of the land. In addition, there is no reason this taking is not, as a matter of law, compensable under the Takings Clause. Further, just compensation is due to at least the subset of owners for whom there is a well-developed record.

[A prior decision in this litigation is published at 32 ELR 20154.]

Counsel for Plaintiffs
Richard P. Bress
Latham & Watkins
1001 Pennsylvania Ave. NW, Ste. 1300, Washington DC 20004
(202) 637-2200

Counsel for Defendants
John E. Kosloske
Civil Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000