Fresh Pond Shopping Center, Inc. v. Callahan Et Al.

Background

A property owner agreed in June 1979 to buy a six-unit apartment building next to property it already owned, planning to demolish it and pave the lot for parking for a commercial tenant. The apartments were covered by Cambridge City Ordinance 926, which required a removal permit from the Cambridge Rent Control Board before taking units out of the rental market. Although only one unit was occupied when the owner sought the permit, the Board denied the request. A Massachusetts trial court upheld the ordinance, and the state Supreme Judicial Court affirmed by an equally divided vote. The owner appealed to the United States Supreme Court.

Reasoning

The central federal question was whether Cambridge’s removal-permit scheme amounted to a government taking of private property without compensation under the Fifth and Fourteenth Amendments. The Supreme Court dismissed the appeal for want of a substantial federal question, leaving the lower courts’ rulings intact. The dismissal is an order rather than a full merits opinion, so the Court did not decide whether the ordinance is a compensable taking under the federal Constitution.

Real world impact

Because the Supreme Court dismissed the appeal, Cambridge’s rent-control removal restrictions and the Rent Control Board’s denial of a demolition permit remain effective against this owner. Landlords who wish to remove rent-controlled units must go through the same local permitting process and may face denials. The dismissal leaves open the federal takings issue for future cases; it could be raised again on different facts or reach the Court later.

Dissents or concurrances

Justice Rehnquist dissented, saying he would note probable jurisdiction and hear the case. He argued the ordinance functions like a permanent physical occupation that deprives the owner of meaningful use and that denial without compensation raises a serious Takings Clause question.