The Commons of Lake Houston, Ltd. v. City of Houston, Texas

CourtTexas Supreme Court
DecidedMarch 21, 2025
Docket23-0474
StatusPublished

This text of The Commons of Lake Houston, Ltd. v. City of Houston, Texas (The Commons of Lake Houston, Ltd. v. City of Houston, Texas) is published on Counsel Stack Legal Research, covering Texas Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
The Commons of Lake Houston, Ltd. v. City of Houston, Texas, (Tex. 2025).

Opinion

Supreme Court of Texas ══════════ No. 23-0474 ══════════

The Commons of Lake Houston, Ltd., Petitioner,

v.

City of Houston, Texas, Respondent

═══════════════════════════════════════ On Petition for Review from the Court of Appeals for the First District of Texas ═══════════════════════════════════════

Argued October 31, 2024

JUSTICE BOYD delivered the opinion of the Court.

After Hurricane Harvey struck Texas in 2017, the City of Houston amended its ordinances to increase the elevation requirements for construction in a floodplain. A developer sued the City for inverse condemnation, alleging that the amendments caused a regulatory taking of the developer’s property under the Texas Constitution. The trial court denied the City’s plea to the jurisdiction, but the court of appeals reversed and dismissed the case, holding the developer cannot establish a valid takings claim because the City amended the ordinance as a valid exercise of its police power and to comply with a federal flood-insurance program. Although these facts are undisputed, we do not agree that they negate the possibility of a taking. Nor do we agree with the City that the developer’s claims are unripe or that the developer lacks standing to assert them. We thus reverse the court of appeals’ judgment and remand the case to the trial court for further proceedings. I. Background The Commons of Lake Houston first began developing a 3,300-acre residential community near Lake Houston in 1993. Focusing on one phase at a time, it has subdivided, platted, and cleared the raw land in sections, adding streets and utilities and then selling empty lots to buyers and builders who design and construct the homes. This case involves a section called The Crossing, a 300-plus-acre area that includes many of the project’s most valuable lots. The Commons’s business plan relied on revenue from the earlier phases to finance the subsequent phases and ultimately produce profits from the last phases, including The Crossing. The Crossing’s lakefront and lakeview lots are more valuable than most, but they also lie in areas colloquially referred to as the 100- and 500-year floodplains.1

1 Like similar federal laws, the City’s ordinances have referred to “base

flood elevations” as areas having a 1-percent or 0.2-percent chance of flooding in any given year. See HOUS., TEX., CODE, Ordinance 85-1705, §§ 19-2 (defining base flood elevation as the flood elevation for “a flood having a one percent chance of being equalled [sic] or exceeded in any one year”), 19-33 (requiring new construction to be “elevated to or above the base flood elevation”) (Sept. 25, 1985), amended by Ordinance 2018-258 (Apr. 4, 2018); see also Christine A. Klein, The National Flood Insurance Program at Fifty: How the Fifth Amendment Takings Doctrine Skews Federal Flood Policy, 31 GEO. ENV’T L. REV. 285, 296 (2019) [hereafter NFIP at Fifty] (explaining that federal law

2 Part of the overall project, including The Crossing, is within the City of Houston’s city limits. Through the years, the City has generally supported the project, approving a municipal utility district, agreeing to provide utility services, approving a general plan2 for each section, and granting The Commons various permits and waivers. In 2017, the City approved a general plan for 122.5 acres in The Crossing, which included plans for water, sanitary sewer, drainage, and streets for 531 lots. After obtaining the City’s approval, The Commons proceeded to invest over $1 million in developing The Crossing. Because The Crossing lies within the floodplain, however, the City code requires The Commons to obtain a floodplain-development permit or a variance from that requirement.3 The City-approved general plan was based on the code’s requirement that foundation slabs be constructed at an elevation at least one foot above the 100-year

“focuses on ‘special flood hazard areas,’ which are defined as places that have a one percent chance each year of flooding (‘1%-chance floodplains’)”). Like the parties (and many others), we will refer to the 1-percent-chance and 0.2-percent-chance floodplains as the 100-year and 500-year floodplains, without intending to support the misconception that these areas will flood only once every 100 or 500 years. See Klein, NFIP at Fifty, 31 GEO. ENV’T L. REV. at 303 (“Although colloquially referred to as the ‘hundred-year floodplain,’ these areas have a one percent chance of flooding each year, making it possible to have ‘hundred year’ floods in successive years.”); Flood Zones, FEMA (July 8, 2020), https://www.fema.gov/about/glossary/flood-zones (“The 1-percent annual chance flood is also referred to as the base flood or 100-year flood.”). 2 A general plan is “a map illustrating the general design features and

street layout of a proposed development of land that is to be subdivided and platted in sections.” HOUS., TEX., CODE § 42-1 (2024). 3 See id. §§ 19-16, 19-20.

3 floodplain.4 In August 2017, however, Hurricane Harvey struck the Houston area, dumping over sixty inches of rain, breaking flood-damage records, and directly causing at least sixty-eight deaths.5 In response, and anticipating that the Federal Emergency Management Agency (FEMA) would revise its maps to identify new “special flood hazard areas,”6 the City amended its ordinances in April 2018. As amended, the City code now requires that foundation slabs be constructed at an elevation at least two feet above the 500-year floodplain.7 The Commons asserts that the amendment increased the required slab elevations in The Crossing by an average of 5.5 feet and, as a result, rendered 557 of the 669 total lots (and over seventy-five percent of the total acreage) undevelopable. Because of the new elevation requirement, The Commons alleges it had to cancel development and sales contracts, lost $4.4 million in revenue and $1.8 million in bond reimbursements, and had to borrow over $1 million to cover cash flow. Ultimately, The Commons asserts, the amendment destroyed its expected profits from the entire 3,300-acre project.

4 Id. § 19-2 (Sept. 25, 1985), amended by Hous., Tex., Ordinance 2018-

258 (Apr. 4, 2018), https://library.municode.com/tx/houston/ordinances/code_ of_ordinances?nodeId=891265. 5 See Klein, NFIP at Fifty, 31 GEO. ENV’T L. REV. at 306–07.

6 See Hous., Tex., Ordinance 2018-258 (Apr. 4, 2018).

7 See HOUS., TEX., CODE §§ 19-2 (defining “minimum flood protection

elevation” to mean “the 0.2 percent flood elevation, plus 2 feet”), 19-33 (requiring new construction to be “elevated to at least the minimum flood protection elevation”); see also Flood Zones, FEMA (July 8, 2020), https://www.fema.gov/about/glossary/flood-zones (defining the 0.2-percent-chance flood level as the 500-year floodplain).

4 The Commons filed this suit against the City in 2020,8 asserting that the amended ordinance caused a regulatory taking for which the Texas Constitution requires reasonable compensation. The City filed a plea to the jurisdiction, arguing the claim was unripe because the City had not yet denied a permit and The Commons had not sought a variance. The City also argued that governmental immunity bars the suit because The Commons failed to allege a valid takings claim. The trial court denied the City’s jurisdictional plea, the City took an interlocutory appeal, and the court of appeals reversed. 698 S.W.3d 572, 588 (Tex. App.—Houston [1st Dist.] 2023). Without reaching or addressing the City’s ripeness argument, the court of appeals held that The Commons failed to assert a valid takings claim because the City amended the ordinance as a valid exercise of its police power and to “track” the criteria of the federal National Flood Insurance Program. Id. at 585–86. We granted The Commons’s petition for review. II.

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