American Institute of Certified Planners (AICP) Practice Exam

What significant requirement did the court establish in Nollan v. California Coastal Commission regarding exactions?

1. They must serve a substantial public purpose

2. They can be imposed arbitrarily

3. Exactions are not permissible

4. Exactions must be minimal

The correct answer is: They must serve a substantial public purpose

In the case of Nollan v. California Coastal Commission, the court established the necessity for exactions to serve a substantial public purpose, creating a clear link between the conditions imposed by the government and the effects of the proposed development. This decision emphasized that for a governmental body to lawfully impose conditions on a permit, there must be a direct relationship between the exaction required and the anticipated impact of the proposed development on the community. This requirement stems from the broader legal principle aimed at ensuring that property owners do not face arbitrary demands from government entities when seeking development permits. By requiring a substantial public purpose, the court reinforces the importance of fairness and reasonableness in the regulatory process, ensuring that conditions placed on development serve to mitigate specific adverse impacts rather than simply serving broader public interests without a causal link. The other options do not accurately reflect the court’s findings. The notion of arbitrary imposition or the claim that exactions are not permissible contradicts the ruling, which allows for certain exactions when they meet the established criteria. Similarly, while a minimum level of impact is important, the critical factor established by the court is the requirement for a substantial public purpose tied to the development’s impact.