A Taking

In DM Arbor Court, Ltd.. v. City of Houston, the Fifth Circuit held that the City’s denial of repair permits under its flood control ordinance constituted a categorical taking under the Supreme Court’s Lucas framework.

After the Arbor Court apartment complex was severely damaged by flooding, the City refused to issue repair permits unless the buildings were elevated to meet new floodplain requirements—a cost the court found to be “prohibitively expensive” and “economically unfeasible.” Both the property owner’s and the City’s experts agreed that, under these conditions, there was “no economically viable, or feasible, or beneficial use of the property.” The Fifth Circuit stated, “Saying that a property’s only remaining use is to hope for future development is the same as saying that the property must remain idle today. That is a categorical taking under Lucas.”

A dissent argued that the district court’s analysis was correct, emphasizing that Lucas takings are reserved for the “extraordinary case” where a regulation “permanently deprives property of all value. No. 23-20385, Aug. 12, 2025