Diversified Holdings, LLP v. City of Suwanee
The Supreme Court of Georgia held that when a landowner claims a city has caused harm through a particular zoning classification, inverse condemnation is not an available remedy for the landowner unless he or she can meet the separate requirements for such inverse condemnation claim.
Diversified Holdings owned thirty acres of undeveloped land within the City of Suwanee. The city's comprehensive plan and zoning had the property alloted for commercial use with the aim for high density, high intensity office space. Diversified, however, was unable to find a purchaser for the property under its commercial zoning and wanted the property to be rezoned for multifamily use, for which they claimed they had received multiple offers. The city council, on recommendation of the planning commission, denied the application to rezone the property and Diversified filed suit alleging that the denial amounted to a taking of property.
The trial court found that a rezoning of the property would substantially increase the fair market value of the property but that hte current zoning was substantially related to the public health, safety, and welfare. In the end, the trial court held that Diversified had not shown that the current zoning was not substantially related to the health and welfare and the city's decision did not amount to an abuse of discretion.
The Court held that if a land use regulation is arbitrary and capricious it would not be allowed to stand, but they could not identify any zoning case where the party claiming an inverse condemnation received financial damages for the loss of their property. The Court also agreed with the trial court that the city's decision was substantially related to the public's health, morality, and welfare. The Court concluded that the application to rezone the property was properly denied.