The purpose of this paper is to articulate the inherent unfairness in compensation outcomes between landowners whose land is physically taken versus those whose land is regulated. Using Rawlsian theory as the normative standard of “fairness as justice”, the paper argues that both physical and regulatory takings should be compensated.
Most jurisdictions invariably provide market price compensation when land is physically acquired. When land is not physically taken but merely subject to regulation, however, there is no corresponding need to compensate, even where the economic loss suffered by the landowner is the same. Adopting Rawlsian theory, this paper explains why justice and fairness in land use planning require both physical takings and regulatory takings to be equally compensable.
Applying Rawlsian theory to compare compensable compulsory purchase with non-compensable regulatory takings of land show that the latter is not compatible with an ethical planning praxis.
While Rawlsian theory has been applied in urban planning research before, this would be its first application in highlighting the apparent justice paradox which now distinguishes a physical and regulatory taking of land.
