ARTICLE

Rhonda Freeman v. Metro Nashville

April 23, 2019 11:58AM

The Story

If Nashville wants Rhonda Freeman to build sidewalks, it needs to pay her. Nashville does not have the right to expect private parties like Rhonda to build public infrastructure for the public for free.

Instead, Nashville is using its building permits as currency. If anyone simply wants to build a home on the person’s own property, the city forces that individual to build a sidewalk in order to receive the building permit. It doesn’t even matter whether the neighborhood has perfectly functional existing sidewalks, or no sidewalks at all. As a result, Nashville now has notorious “sidewalks to nowhere,” or zig-zagging sidewalks.

Nashville’s sidewalk law imposes tremendous financial burdens on everyday Nashvillians, like Rhonda Freeman. Rhonda moved from Seattle to Nashville in 2000. When looking for a place to be closer to family, she picked Nashville off the map, and upon visiting, she realized it was where she wanted to spend the rest of her life.

When she retired from a 30-year career in nursing in 2015, she began a small—but very successful—business building homes with her husband and brother. Her brother was a contractor in Florida, and having grown up with a father in the construction business, building and renovating homes came naturally to her. Her first few years in business were very profitable. Since 2014, Rhonda’s company has completed 39 houses, mostly in the Nations neighborhood in west Nashville. But since her business began, there have been several laws put into place that have factored into the cost of building outpacing the sale prices—the sidewalk law being the largest factor. In fact, Rhonda’s company made half as much money in the second two years of her business than she did in the first two years, even though housing prices in Nashville are on the rise. That difference is due in large part to Nashville’s sidewalk ordinance.

Burdens like the sidewalk mandate increase the cost of  Rhonda’s projects. In a time of soaring home prices in Nashville, this is the last thing the city should be doing. The sidewalk law greatly complicates the task of building, adding months to her time to construct homes, and this comes at a time when Nashville can barely keep up with the scarcity in housing.

Rhonda has had to replace existing sidewalks, move utility lines, and faced petitions from neighbors in the process of building homes since the ordinance was put into place. Nashville is one of the fastest-growing cities in America. Adding thousands of dollars in months of time to building projects, on top of the thousands of dollars that it takes the construct sidewalks, is hindering Nashville from keeping up with the demand for homes.

The Problem

Nashville has decided sidewalks are a priority. The problem is that Nashville does not want to pay for them. This doesn’t make any sense. It is also unconstitutional.

According to the U.S. Supreme Court, local governments cannot use their permitting authority to exact financial concessions out of property owners that are unrelated to the property owner’s intended use. That’s exactly what Nashville is doing with sidewalks.

Given Nashville’s finances, this should all come as no surprise. The city has $1.7 billion in approved capital projects that are unfinanced. And in September 2018, Nashville approved $775 million in bonds just to cover its past obligations. Suffice to say, Nashville’s fiscal picture does not include installing and upgrading city sidewalks. So Nashville had to get creative about paying for sidewalks. Specifically, Nashville decided to use its permitting authority to make property owners pay for what are quintessentially public works.

The way the law generally works is that when someone requests a building permit, that person is given the option of either constructing sidewalks or paying Nashville a “contribution” to the city’s sidewalk fund. A person will trigger the law any time that they construct a new single-family home. If the individual decides to contribute to the fund, the cost must equal the cost per linear foot that the city pays to construct sidewalks. Even in the case of a property owner who only wants to renovate his or her home, the person must deed a right-of-way to the city for future sidewalk construction in all cases where the renovation is worth 50% of the home’s value.

Rhonda Freeman is among the many impacted by this law. She triggered the law when she went to pull occupancy permits on a soon-to-be-completed home in Nashville—a home that already had a contract on it. Just about anyone involved in home improvement has been hit with the law. “We need sidewalks,” Rhonda said. “But the cost is falling on the backs of the homebuilders, and that’s not fair.” Of course, the natural effect of all of this is to drive up the cost of housing in Nashville even further, a painful reality for many Nashvillians as they seek affordable housing.

Constructing new sidewalks isn’t the only issue. Based on Nashville’s ordinance, many existing sidewalks do not comply with the new requirements. This means, for Rhonda and many others, that the existing sidewalks must be torn up and replaced by compliant sidewalks, all at the expense of the builder and eventually the homeowner.  In the case of several homes built by Rhonda’s company, a sidewalk that was constructed by the city only two to three years ago had to be torn up and rebuilt just inches closer to the house to comply with the new requirements, creating a “zig-zag” sidewalk in the neighborhood.

The other aspect of this law is the “curb and gutter” requirement. Not only is the city forcing people to install new sidewalks, but it is also requiring them to construct curbs and gutters on public streets. These aren’t even part of the person’s property. The curbs are the rim of concrete that divides the yard from the road. The gutters are channels on the side of the road that diverts surface water. As far as Nashville mandating them is concerned, the sidewalk law does not even mention of curbs and gutters. It is a demand that the city is making with no legal authority. By including curbs and gutters into the definition of sidewalks, Nashville bureaucrats have effectively amended the law to include a separate building requirement.

Nashville property owners subjected to this onerous law are ready to challenge it.

The Law

Metro’s sidewalk ordinance is unconstitutional in violation of the Takings Clause of the Fifth Amendment to the U.S. Constitution. The Takings Clause prohibits the government from takings one’s property without just compensation. Here, Nashville is not “taking” the property outright; it is just demanding that property owners surrender property in exchange for city permits.

This is a species of what the courts call an unconstitutional condition. The Takings Clause exists because the Founders did not envision a country where governments could strong-arm private parties into paying for things the government did not care to. Through a series of cases developed over the last three decades, the Supreme Court has made clear that the Fifth Amendment not only protects one from a physical taking, but also from governments that misuse the power of land-use regulation.

To prevent governments from circumventing the Takings Clause and from trying to accomplish indirectly what they cannot do directly, the Supreme Court applies the “unconstitutional conditions doctrine.” Under this well-settled doctrine, “the government may not require a person to give up a constitutional right . . . in exchange for a discretionary benefit conferred by the government where the benefit sought has little or no relationship to the property.” In other words, the Takings Clause prohibits Nashville from forcing landowners to choose between a land-use permit and the right to receive just compensation from a taking. That is what Nashville has done with its sidewalks. It has conditioned the issuance of building permits on the property owner agreeing to build or pay for sidewalks on behalf of the city, and with no possibility of compensation.

Of course, a city may attach conditions that require the property owner to address any negative impacts of development. seeking to construct units that would increase the zoning density and thus, the number of pedestrians. Further, Nashville’s sidewalk law is priced in a way that is not related to the “problem” caused by the property owner.

The sidewalk law is a prime example of the “gimmickry” that the Supreme Court so harshly rejected over two decades ago. Nashville knows that to a property owner, oftentimes the building permits to construct a home or improve the property may be worth more than the undeveloped property itself. Thus, all Nashville has to do is to make its demand cost less than the value of the developed property. The Supreme Court has recognized this and that is the reason why it has been vigilant in the past to safeguard the protections of the Fifth Amendment with the unconstitutional conditions doctrine.

Legal Documents

Complaint

The Legal Team

Braden Boucek is the VP of Legal Affairs for the Beacon Center.

Meggan DeWitt is the Staff Attorney for the Beacon Center.