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Land Use and Planning Litigation United States Supreme Court

U.S. Supreme Court Addresses the 'Denominator Problem'

In a recent case, the U.S. Supreme Court applied what has come to be known as the Penn Central balancing test to uphold New York City's refusal to approve an office tower atop Grand Central Terminal.


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Government may generally regulate land use in ways that diminish the market value of the regulated land, unless the regulation amounts to an unconstitutional taking under Penn Central Transportation Company v. City of New York, 438 U.S.104, or Lucas v. South Carolina Coastal Council, 505 U.S. 1003.

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