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Downzoning Protection
The Property & Land Use Stability (PLUS) Act
When a government changes the rules impacting your property to allow fewer homes, your land loses value overnight. This bill says that if a local government wants to restrict what you can build, it has to pay you for the loss in value or leave your property’s rules as they were.
Downzoning Protection
About the bill
“When a city reduces what you can build on your own property, you lose real value with no right to compensation. This bill fixes that. It protects property owners from arbitrary government action and keeps homes from being killed before they ever get built.”
— Jim Manley, State Policy Director, Pacific Legal Foundation, 2026
“This bill [SB 330] is based on a simple premise: Once a community has set their local rules, housing that meets those rules should get the green light and not face years of unnecessary delays.”
— State Senator Nancy Skinner, author of SB 330, Berkeleyside, June 2022
What this bill does
Cities often “downzone” residential property, quietly reducing how much housing a property owner can build. These actions not only restrict homebuilding; they can also sharply reduce property values, often with little notice. This model legislation prohibits local governments from reducing the potential number of homes a property owner can build unless the owner is compensated for the loss in value.
Why it's needed
Reducing how many homes a property can hold doesn’t always look like a rezoning. A city can add a new permit requirement, adopt a design rule, or pass a neighborhood plan that lowers the number of homes that can be built on a lot. Each change may seem small on its own, but together they can quietly shrink a community’s capacity for new housing. These changes also cost property owners real value, and in most states, local governments can make them without compensating owners or accounting for the homes that will no longer be built.
Frequently asked questions
What does this bill actually do?
This bill prevents local governments from enacting or enforcing any zoning change that reduces what can be built on a property, except when needed to protect federal and state law, and for nuisance abatement. Downzoning is defined broadly: it includes reductions in density, height, or floor area, but also new procedural barriers like discretionary reviews or conditional use permits, use restrictions, and overlays or plans that reduce buildable area. Cities can still downzone, but they must pay owners for the lost value.
Property owners, developers, and nonprofits have a clear path to challenge downzoning in court, to stop enforcement, get a declaratory ruling, or recover damages for lost property value. Attorney’s fees go to prevailing plaintiffs. Local governments bear the burden of proving a valid exception applies, and can avoid compensation by withdrawing the downzoning within 60 days of a formal challenge.
Who is getting hurt by the status quo?
Anyone who owns property or is counting on being able to build on it. Seniors who bought a lot expecting to build a smaller home to age in place. Families who bought land as a long-term investment. Growing families counting on the ability to add a unit for a parent or rent out space to cover their mortgage. Small builders who planned a project based on what the zoning allowed when they bought the land.
The broader cost falls on everyone who needs a home. When cities reduce what can be built, fewer homes get built, and families looking for a place to live have fewer options.
How common is downzoning?
For most of the 20th century, downzoning was one of the most common zoning changes in American cities. What began as a tool to guide growth became a tool to prevent it, as established neighborhoods used zoning to lock in low density and exclude new housing. A 2025 study of Chicago found hundreds of downzoning actions between 1970 and 2016, concentrated in the city’s highest-value neighborhoods. The pattern is not unique to Chicago.
There is no national tracking system for downzoning. Most cities don’t report when they reduce development rights, and nothing requires them to. That invisibility is part of what makes it so persistent and so costly. A review by the Urban Institute found that downzonings limit construction and raise rents.
Why can't local jurisdictions just fix this themselves?
A statewide rule sets one consistent guardrail, so whether a property keeps its housing capacity doesn’t depend on who shows up to a particular meeting. Downzoning decisions can easily be driven by a few organized voices. A small group of nearby residents can push to reduce what a property can hold, while the people who would have lived in those homes aren’t there to object. Even a city council that wants more housing can struggle to resist that pressure one hearing at a time.
Would my state benefit from passing this bill?
Yes. Local governments in every state have the power to reduce what can be built on private property, and the majority of states have no rule preventing them from doing it without compensation. A handful of states have acted: Arizona, California, Florida, Oregon, and North Carolina have passed some form of downzoning protection. Everywhere else, property owners have no recourse for when a city changes the rules.
The Legislation
Full model legislation text
Clean version
Annotated
Section 1. Downzoning not enforceable.
(a) No amendment to zoning regulations or a zoning map that downzones property shall be enforced except in compliance with the provision of this Act.
(b)For purposes of this Act, “downzoning” means any zoning action, land use regulation, ballot initiative, or administrative policy that results in:
(1) A reduction in permitted density, floor area ratio (FAR), building height, lot coverage, build requirements, or other form-based entitlement;
(2) A regulation that introduces or increases procedural barriers, including new discretionary reviews, conditional use permits, public hearings, or other non-ministerial processes, for projects that previously qualified for by-right or administrative approval;
(3) A regulation that reduces or restricts the lawful use, division, sale, or possession of property;
(4) The imposition of design standards, objective development standards, specific plans, neighborhood plans, or overlay zones that reduce a parcel’s feasible yield or buildable area relative to prior entitlements.
This section establishes that if a government action downzones property, it is not enforceable except in compliance with this Act. That principle follows the strongest modern property rights laws in Arizona and Oregon, each of which requires compensation or waiver when a land use change reduces fair market value. The definition of downzoning is intentionally broad. It captures not just explicit reductions in density, but also procedural changes and design standards that effectively reduce what can be built, following the same logic used in California’s Housing Crisis Act of 2019 (SB 330).
Section 2. Applicability.
(a) This Act shall apply to all Local Authorities. For the purposes of this Act, “Local Authority” means a city, county, city and county, municipality, township, village, parish, borough, or other political subdivision with authority over land use, building permits, or residential development. The term includes a chartered or home-rule jurisdiction.
(b) The provisions of this Act shall apply to any Downzoning adopted after the effective date of this Act.
Applies the law to every local jurisdiction with zoning or permitting authority, and only to zoning actions taken after the law takes effect. That prospective-only structure follows Arizona and Oregon, which similarly apply to later-enacted land use changes rather than retroactively undoing earlier regulations. This prevents claims over older rules while giving property owners a clear rule going forward.
Section 3. Exceptions.
(a) This Act shall not apply to downzoning necessary to:
(1) Protect the public from legitimate threats to health or safety, which includes regulations necessary to prevent or mitigate conditions that pose an imminent threat to human life or property, such as geologic hazards, unstable soil, earthquake fault zones, fire hazard severity zones, or known flood-prone areas, as defined by local emergency management authorities or applicable building and fire codes.
(2) Comply with federal or state law, including the Endangered Species Act, the Fair Housing Act, the Americans with Disabilities Act, or applicable building accessibility standards.
(3) Prevent or abate a nuisance, meaning persistent activity that objectively injures the physical condition of adjacent land or interferes with its use.
(b) This Act shall not prevent the addition of compatible commercial, light industrial, or mixed-use zoning overlays, provided that residential capacity is not reduced and the modifications are consistent with the jurisdiction’s adopted land use or comprehensive plans.
The exceptions are narrow and intentional. They follow Arizona’s Proposition 207 which exempts regulations genuinely necessary to protect public health and safety, prevent nuisance, or comply with federal or state law. A zoning overlay that adds compatible commercial or mixed-use uses without reducing residential capacity is not a downzoning and does not trigger this law.
Section 4. Enforcement and remedies.
(a) A property owner, housing developer, or nonprofit organization may bring an action in state court for any of the following forms of relief:
(1) Enjoin enforcement of downzoning;
(2) Declaratory relief;
(3) Recover damages for the loss of fair market value caused by downzoning.
(b) The burden shall be on the government to prove by clear and convincing evidence that an exception under section 3 applies.
(c) A prevailing property owner, housing developer, or nonprofit organization in a court action shall be awarded reasonable attorney’s fees and costs.
(d) The government shall not require an application for a project to indemnify, defend, or hold harmless government in any manner with respect to an action brought by the applicant, or another person, alleging that the government violated the applicant’s rights or deprived the applicant of benefits or protections provided by law.
Property owners, developers, and nonprofits can go to court to stop a downzoning, seek a declaratory ruling, or recover damages. That enforcement model combines the private right of action used in Arizona and Florida with the broader standing rules developed in California housing law, recognizing housing organizations as proper plaintiffs in land use enforcement cases. Attorney’s fees go to prevailing plaintiffs, which is what makes the right real for property owners who can’t outspend a city’s legal department. The section also bars the government from using indemnity, defense, or hold harmless clauses to deter claims that it violated the Act.
Section 5. Compensation.
(a) A jurisdiction covered by Section 2(a) of this Act shall compensate a property owner if the enforcement of downzoning results in a demonstrable reduction in the fair market value of the property attributable to limitations on the property’s lawful use.
(b) The amount of compensation shall be calculated as the difference between the fair market value of the property immediately before the adoption of a downzoning and the fair market value after its enforcement. This valuation must be established through an independent, certified appraisal submitted by the claimant.
(c) A jurisdiction may avoid liability for compensation by electing to waive the application of downzoning as it pertains to the subject property within 60 days of receiving written notice from a property owner or within the time to answer an action filed pursuant to Section 4, whichever comes first. If waived, the regulation shall be treated as void with respect to that property.
Compensation is calculated as the difference in fair market value before and after the downzoning takes effect, established through an independent appraisal. That before-and-after valuation method follows Arizona, Florida, and Oregon. Cities can waive the downzoning as applied to the specific property within 60 days of receiving a written claim or within the time to answer an action filed under Section 4, whichever comes first. If they do, the restriction is void for that property, and no compensation is owed. The deadline prevents cities from leaving property owners in prolonged uncertainty while deciding whether to pay or back down.
Lessons from other states
Several states have passed laws that protect property owners from downzoning, using three main approaches. Florida (1995), Oregon (2004 and 2007), and Arizona (2006) require governments to compensate owners when new rules reduce property value. North Carolina (2024) requires the written consent of affected owners before a downzoning, and California (2019) bars cities from reducing overall housing capacity. Florida’s, North Carolina’s, and California’s laws passed through the state legislature. Oregon’s and Arizona’s passed as statewide ballot measures.
Florida’s experience shows how owners use a compensation requirement. In 1998, after Miami Beach reduced allowable floor area and unit bonuses, property owners filed nearly $40 million in Bert Harris claims against the city within months.
Oregon’s law generated more claims than any other state’s: property owners filed more than 7,000 claims under Measure 37. In 2007, Oregon voters approved Measure 49, which scaled the law back by limiting each claim to a small number of new home sites. This bill avoids Oregon’s problem from the start by applying only to downzonings adopted after it takes effect.
Recommended reading:
- Legislative Responses to the Regulatory Takings Conundrum, Mercatus Center (Emily Hamilton and Charles Gardner, 2025)
- Legislative Exits from the Land Use Labyrinth, Regulatory Transparency Project (Braden Boucek, Emily Hamilton, and Kimberly Hermann, 2021)
- Property Ownership Fairness Act: Protecting Property Rights, Goldwater Institute (Christina Sandefur and Timothy Sandefur)
- MAP Webinar: The PLUS Act (Property & Land Use Stability) with Jim Manley of the Pacific Legal Foundation, presentation slides and webinar clip (2026)
Florida — enacted 1995
Florida's Bert J. Harris, Jr., Private Property Rights Protection Act of 1995 was one of the first state laws allowing private property owners to seek compensation in response to government regulations affecting their property value. The law sets a high bar. Owners must show an ‘inordinate burden’ on a reasonable, investment-backed expectation,’ which can be costly and slow to prove and requires a written appraisal. By 2008, 202 claims had been brought under the law.
Arizona — enacted 2006
Arizona voters approved Proposition 207 in 2006 with more than 60% of the vote. Drawing on Oregon’s and Florida’s experience, it applies only to land use laws adopted after the measure took effect, which avoided the flood of retroactive claims Oregon faced. A property owner is entitled to compensation for any reduction in fair market value caused by a new land use law, and does not need a written appraisal to bring a claim. The measure exempts laws that protect public health and safety, but the local government must show by a preponderance of the evidence that a law falls within that exemption. Property owners who win can recover their legal costs, but local governments cannot recover theirs from owners who lose. This gives local governments a strong financial reason to avoid changes that could trigger a claim.
Oregon — enacted 2004, revised 2007
Oregon voters passed Measure 37 in 2004, requiring state and local governments to compensate property owners for land use rules that reduced their property’s value. The measure applied to any rule adopted since the owner or their family acquired the property, in some cases decades earlier. Governments that couldn’t pay could instead waive the rule. Owners filed more than 7,000 claims by March 2007, many seeking large subdivisions on farm and forest land. Because few governments could afford to pay, waivers became the default, and voters grew concerned about development on farmland. In 2007, voters approved Measure 49 by 62% of the vote, which voided the waivers and replaced them with a limited number of home sites: up to three without proof of lost value, and up to ten with it. Oregon’s experience is the clearest lesson for drafting this kind of law: compensation rights that reach back to past rules invite a flood of claims and political backlash.
California — enacted 2019
California took a different approach from the compensation laws in other states: instead of requiring payment, it limits downzoning directly. The Housing Crisis Act of 2019 (SB 330) bars covered cities and counties from reducing residential capacity below the zoning in place on January 1, 2018. A city can still reduce what’s allowed on some parcels, but only if it increases capacity elsewhere at the same time, so there is no net loss of housing capacity. It also bars housing moratoriums and limits the number of hearings for projects that meet local rules. SB 330 was originally temporary. SB 8 (2021) extended it to January 1, 2030, and clarified that downzonings passed by ballot initiative must also meet the no-net-loss requirement.
North Carolina — enacted 2024
In 2024, the North Carolina legislature passed SB 382, a hurricane recovery funding bill that included a short provision requiring local governments to get the written consent of all affected landowners before any downzoning. Since then, lawmakers have introduced bills to narrow the provision.
- North Carolina Passes Sweeping Surprise Ban on Downzoning, Reason (2024)
- New NC Law Protects Property Rights by Limiting Local Down-Zoning, Carolina Journal (2025)
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