Squatters' Rights Laws Violate the Takings Clause

Where these laws allow squatters to occupy houses without the owner's consent, they qualify as takings of private property that require payment of compensation under the Fifth Amendment.

(Illustration: Lex Villena; Lev Kropotov )

In recent weeks, there has been a lot of media coverage of squatters' rights laws that sometimes have the effect of blocking property owners from removing trespassers who occupy their houses without the owners' permission. Newsweek describes some highly publicized recent cases:

A recent string of incidents in Georgia, New York and Washington has brought squatting, the practice of occupying someone else's property without their consent, into the spotlight.

In Washington, a squatter named Sang Kim made headlines after preventing Jaskaran Singh, a landlord, from possessing his $2 million property following Kim's refusal to pay rent for two years.

Earlier in March, a New York property owner was arrested over unlawful eviction after confronting a group of alleged squatters who had taken over her deceased parents' home in Flushing, Queens, ABC 7 reported. While the woman held the property's deed, one man said he was on a lease for the house—which meant the property owner was barred from kicking him out [he, in fact, did not actually have a lease].

That same month, David Morris, a landlord in Atlanta, told Fox 5 of a group of squatters who were preventing him from building affordable housing on his nine-acre land and whom he was unable to remove because of a moratorium on evictions.

Morris told the outlet he had agreed to let four people stay on the land without paying rent about 10 years ago, but that he found the number of people occupying the property had grown to about "30 campers." Though the squatters were taken away from the land, Morris said he spent $10,000 to clean up their garbage.

John Stossel of Reason made a video focusing on the New York case.

As often happens when an issue attracts media attention, it is hard to tell from early reports how widespread the problem actually is. But even a few cases of successful squatting may be problematic, because they could incentivize imitation. Media attention could accelerate that process.

Ideally, state and local governments should make it easy for property owners to swiftly remove squatters, and should subject the trespassers to civil and criminal sanctions. But where they instead facilitate this violation of property rights, the laws that do so violate the Takings Clause of the Fifth Amendment, which requires payment of "just compensation" whenever the government takes "private property."

In Cedar Point Nursery v. Hassid (2021), the Supreme Court ruled that even temporary government-authorized physical occupations of private property are "per se" (automatic) takings. Thus, the Court struck down a California law requiring agricultural growers to give union organizers access to their land for three hours per day, 120 days per year. At least some state squatter rights' laws are considerably more egregious than that: They enable squatters to completely occupy the property for many weeks or months on end, totally excluding the owner in the process. That is particularly true of New York City's law, which gives squatters who claim to be tenants strong rights against removal if they have been on the property for at least 30 days. Landowners seeking to remove the squatters after that point must go through an eviction process, which can take as long as two years.

Chief Justice John Roberts' opinion for the Court in Cedar Point does outline some exceptions to the rule that state-mandated physical occupations qualify as takings. But squatter rights don't fall within any of them. For example, the squatters pretty obviously aren't government employees conducting health and safety inspections.

Squatters could perhaps argue that their activities fall within what the Court called "traditional common law privileges to access private property." The common law does recognize the right to claim property through "adverse possession." But traditional common law precedent permits that only after squatters have had continuous exclusive possession of the land for a long period of time (usually five years or more), and only if the owner made no effort to assert his or her rights during that time. The New York City law and others like it go way beyond that.

The Takings Clause may not be the best possible remedy for this situation. Filing and winning such a case could take many months. And if  property owners do prevail, they generally get only the "fair market value" of the rights lost, which may not fully compensate all of their losses. However, this avenue can provide at least some valuable redress; the longer the squatters remain, the greater the amount of compensation the government will have to pay. And fear of takings liability may incentivize state and local governments to repeal or tighten up the laws that cause the problem.

Legal issues aside, it's worth noting that squatters' rights laws end up harming the very people they are supposed to help: low-income tenants. If property owners have reason to fear that squatters can occupy their land without their consent, they will be less willing to rent property to begin with, charge higher rents, screen potential tenants more carefully (thereby potentially excluding those with low income, few or nor references, and the like), or some combination of all of these measures. They may also be incentivized to impose more costly and elaborate security restrictions on access to land (which in turn is likely to raise rents). All of this predictably reduces the availability of housing and increases its costs.

I hope property owners and public interest law firms give serious consideration to bringing takings challenges against these laws. They are not a panacea for the problem. But they could help.

UPDATE: Prominent takings expert Robert Thomas (Pacific Legal Foundation) comments on this post at the Inverse Condemnation Blog:

In other cases where the courts have upheld regulations and restrictions on an owner's right to recover possession from an actual tenant -- you know, someone with whom the owner actually and expressly agreed, and then transferred the right to exclude to the tenant -- the courts frequently note that "no one is forcing you to become a landlord."

Well here, the owner is being forced to become a landlord.

Professor Somin wraps by noting, "I hope property owners and public interest law firms give serious consideration to bringing takings challenges against these laws. They are not a panacea for the problem. But they could help."

Since we are part of a non-profit, pro bono, public interest law firm as the good professor describes, we shall note here that the welcome mat is out, and if the above-situation is your situation, let us know.