The Commons of Lake Houston has developed a 3,300-acre community near Lake Houston since 1993, selling lots section by section; its business plan used revenue from early phases to finance later ones. In The Crossing, a 300-plus-acre section in the floodplain, the City approved a general plan for 122.5 acres and 531 lots and the developer invested over $1 million; then Hurricane Harvey struck in 2017, and in April 2018 the City amended its ordinance to require slabs at least two feet above the 500-year floodplain rather than one foot above the 100-year floodplain. The Commons says this raised required elevations by an average of 5.5 feet, made 557 of 669 lots undevelopable, and cost it millions in lost revenue.¹

The Commons sued in 2018 for a regulatory taking; the court of appeals dismissed that suit as unripe. After the developer's permit applications were ignored or rejected, it sued again in 2020. The trial court denied the City's plea to the jurisdiction, but the First Court of Appeals reversed and dismissed, holding no valid takings claim existed because the ordinance was a valid exercise of police power and tracked federal flood-insurance criteria (698 S.W.3d 572, 2023). The Court granted review and heard argument October 31, 2024.¹

Petition for review from the First Court of Appeals in an interlocutory appeal from the denial of a plea to the jurisdiction; argued October 31, 2024.²

Whether The Commons can allege a valid regulatory-takings claim when the City amended its floodplain ordinance as a valid exercise of police power and to comply with the National Flood Insurance Program, and whether the claim is ripe and the developer has standing.¹

Ripeness and standing are questions of law reviewed de novo.¹

The Commons (Petitioner): the amendment caused a taking of the developer's property under Lucas or Penn Central.

City of Houston (Respondent): a regulation adopted under the police power and to satisfy the flood-insurance program can never be a taking; the claim is unripe because the City has not denied a permit or variance; and The Commons lacks standing because it had a mere expectancy and its claim is not redressable.¹

Not applicable to the Court's decision; the opinion does not recite the petition's cert-worthiness arguments.

None noted

Holding

A Texas regulatory taking is not defeated because the regulation is a valid exercise of police power or was meant to comply with the National Flood Insurance Program; the developer's claim is ripe and it has standing; the Court did not decide whether The Commons has in fact alleged a taking under Lucas, Penn Central, or the Texas "damaged" provision.¹

Reasoning

The takings clause waives governmental immunity for a viable claim, and whether a regulation is a valid police-power measure is a separate question from whether it causes a compensable taking; Turtle Rock does not create a bright-line exemption, and Adolph v. FEMA held only that a flood ordinance tracking NFIP criteria does not, on its face, effect a taking, leaving as-applied claims to be tested under Lucas and Penn Central. On ripeness, the City's paper trail, unresponsiveness and argument that the developer has no right to a permit and its claim "cannot ever ripen" showed de facto finality; and The Commons has a vested ownership interest and a redressable claim for compensation.²

Disposition

Court of appeals' judgment reversed and the case remanded to the trial court.³

Vote Breakdown

Opinion of the Court by Justice Boyd.⁴