Regulatory Takings in the Floodplain: Police-Power and NFIP-Driven Ordinances Are Not Immune from Texas Takings Claims

I. Introduction

The Supreme Court of Texas’s decision in The Commons of Lake Houston, Ltd. v. City of Houston, No. 23‑0474 (Tex. Mar. 21, 2025), is a significant development in Texas takings law at the intersection of land-use regulation, floodplain management, and federal flood-insurance policy.

After Hurricane Harvey, Houston revised its floodplain ordinances to require substantially higher building elevations in areas mapped as 100‑ and 500‑year floodplains. A long-running residential developer, The Commons of Lake Houston, alleged that these amendments rendered most of a key phase of its development economically useless, destroying the financial viability of its 3,300‑acre project. The developer sued for inverse condemnation under Article I, Section 17 of the Texas Constitution.

The First Court of Appeals dismissed the suit, holding that there could be no taking as a matter of law because (1) the ordinance was a valid exercise of the City’s police power to protect health and safety, and (2) the ordinance tracked (or was designed to track) FEMA’s National Flood Insurance Program (NFIP) criteria. The Supreme Court of Texas emphatically rejected both propositions and revived the case.

The Court also addressed two jurisdictional issues: whether the claim was ripe (given that no floodplain-development permit had been formally denied) and whether the developer had standing. On all three fronts—takings theory, ripeness, and standing—the Court sided with the property owner and remanded for further proceedings.

At its core, the decision establishes and clarifies three key principles:

• A regulation adopted pursuant to a valid exercise of police power can still effect a compensable taking.
• Local floodplain ordinances adopted to comply with, or in anticipation of, NFIP criteria are not categorically insulated from takings claims.
• Where a city’s permitting conduct and litigation position make clear that an owner can never obtain the permission needed to avoid the alleged taking, a regulatory-takings claim is ripe even without a formal permit denial.

II. Background and Procedural History

A. The Development and the Ordinance Change

The Commons of Lake Houston began developing a 3,300‑acre residential community near Lake Houston in 1993. It proceeded in phases, selling lots to builders who then designed and constructed homes. The section at issue, “The Crossing,” is a 300+ acre area containing many of the project’s most valuable lakefront and lakeview lots, many within the 100‑ and 500‑year floodplains.

Historically, Houston’s floodplain code required new construction in the 100‑year floodplain to be elevated at least one foot above the “base flood elevation” (essentially the 100‑year flood level). The City approved a general plan for a 122.5‑acre portion of The Crossing in 2017, anticipating 531 lots with infrastructure. The developer invested over $1 million relying on that general plan.

Hurricane Harvey then struck, with catastrophic flooding. In April 2018, anticipating FEMA map changes and aiming to align with NFIP-related standards, Houston amended its code to require foundations to be constructed at least two feet above the 500‑year floodplain (0.2% annual chance flood level). The Commons alleged that:

• The average required slab elevation in The Crossing rose by 5.5 feet.
• 557 of 669 lots (over 75% of the acreage) became undevelopable under the amended ordinance.
• It had to cancel development and sales contracts, losing millions in expected revenue and bond reimbursements.
• The financial blow destroyed the expected profits from the entire 3,300‑acre project.

B. The Litigation Timeline

1. First lawsuit (2018 – Commons I): The Commons sued even before the amended ordinance took effect. Houston argued the claims were unripe because no floodplain-development permit had been sought or denied. The court of appeals agreed and dismissed for lack of ripeness. (City of Houston v. Commons at Lake Houston, Ltd. (Commons I), 587 S.W.3d 494 (Tex. App.—Houston [14th Dist.] 2019, no pet.))
2. Permit applications and interactions (2019–2021):
   • November 2019: The Commons submitted a request seeking approval for slab elevations at the old standard (one foot above the 100‑year floodplain). Houston did not respond.
   • City officials then advised that a floodplain-development permit required building-specific plans; there was no mechanism for a blanket permit for all lots.
   • February 2020: The Commons submitted a site-wide application for a “blanket” finished floor elevation one foot above the base flood elevation. The City rejected it for lacking “a complete set of plans for a specific building.”
   • March 2020: A second attempt, now including lot-by-lot proposed elevations, was again rejected for lack of specific structural plans.
   • Repeated efforts to obtain guidance between April and August 2020 yielded no resolution.
   • Late 2020: The Commons submitted an amended general plan conforming to the new ordinance, drastically reducing the developable acreage and omitting the most valuable lakefront lots. The City approved the amended general plan, but still would not act on general floodplain-permit requests lacking specific building plans.
3. Second lawsuit (this case): The Commons sued again in November 2020, alleging a regulatory taking under Texas’s takings clause. Houston responded with a plea to the jurisdiction, asserting:
   • Ripeness: no permit denial, no variance request.
   • Immunity: the petition failed to allege a viable takings claim because the ordinance was a valid police-power measure and tracked NFIP criteria.
   The trial court denied the plea. On interlocutory appeal, the First Court of Appeals reversed and dismissed, holding that no taking could arise from a police-power ordinance adopted to comply with NFIP. 698 S.W.3d 572 (Tex. App.—Houston [1st Dist.] 2023).
4. Review in the Supreme Court of Texas (2025): The Supreme Court granted review and, in an opinion by Justice Boyd, reversed the court of appeals and remanded.

III. Summary of the Supreme Court’s Holding

The Court’s holdings are carefully cabined but doctrinally important.

A. On the Merits Framework (But Not the Merits Outcome)

The Court expressly did not decide whether Houston’s ordinance amendment, as applied to The Commons, actually caused a compensable taking under:

• Lucas (total deprivation of economically beneficial use),
• Penn Central (unreasonable interference with use and enjoyment), or
• Article I, § 17’s “damaged” language.

Instead, the Court decided what cannot, as a matter of law, defeat such a claim:

1. A taking is not categorically precluded just because the regulation is:
   • a valid exercise of the police power (e.g., to protect health and safety), or
   • adopted to comply with, or to anticipate, NFIP/FEMA floodplain requirements.
2. The case is ripe for adjudication, despite the absence of a written permit denial, because:
   • the City’s permitting process, as applied, made it impossible for the developer to obtain the relief needed to develop under the old standard, and
   • the City now argues that the developer has “no right” to obtain the permit and that the claim “cannot ever ripen”—statements that establish “de facto” finality.
3. The developer has standing:
   • It owns the property allegedly taken or damaged, which is the relevant vested interest.
   • Its claimed injury (loss in property value and project viability) is redressable through an award of compensation.

Accordingly, the Supreme Court:

• Reversed the court of appeals’ dismissal.
• Held that Article I, § 17 waives governmental immunity for this type of inverse-condemnation claim.
• Remanded the case for the trial court to address, in the first instance, whether the ordinance effects a compensable regulatory taking or “damage” under Texas law on the developed factual record.

IV. Doctrinal Framework: Texas Takings Law in Context

A. The Texas Takings Clause and Governmental Immunity

Article I, Section 17 of the Texas Constitution provides:

“No person’s property shall be taken, damaged, or destroyed for or applied to public use without adequate compensation being made, unless by the consent of such person…”

This language:

• Embeds the fundamental right to own, use, and enjoy private property, treating it as a “cherished liberty.”
• Waives governmental immunity when a plaintiff alleges a viable inverse‑condemnation claim.
• Goes beyond the federal Takings Clause by adding “damaged,” “destroyed,” and “applied,” terms that potentially broaden the scope of compensable governmental interference with property.

The Court reiterates settled doctrine:

• Governmental immunity ordinarily bars suits against cities and other governmental entities, depriving courts of jurisdiction.
• Article I, § 17, however, is itself a waiver of that immunity—but only if the plaintiff pleads a legally viable takings claim. (City of Houston v. Carlson; Steele v. City of Houston)

B. Elements of an Inverse-Condemnation Claim

To prevail on an inverse-condemnation claim under Texas law, a plaintiff must plead and prove:

1. Affirmative governmental conduct;
2. Proximate causation;
3. A taking, damaging, destroying, or applying of private property;
4. Involving specific property owned by the plaintiff;
5. For public use;
6. Without payment of adequate compensation;
7. Done intentionally, or with knowledge that the result was substantially certain.

Whether facts rise to the level of a compensable taking is ultimately a question of law for the court, though underlying factual disputes may require resolution by a factfinder.

C. Types of Takings: Physical vs. Regulatory

The Court adopts the now-familiar conceptual structure drawn largely from U.S. Supreme Court precedent:

• Physical takings: actual occupation, appropriation, or invasion of property (e.g., flooding, seizure of land, mandatory physical installations). These are categorically compensable.
• Regulatory takings: burdensome regulations that limit how property can be used.
  • Loretto-type: permanent physical occupation authorized by regulation.
  • Lucas-type: regulation deprives the owner of all economically beneficial use of the property.
  • Penn Central-type: regulation falls short of total deprivation but unreasonably interferes with use and enjoyment, assessed through an ad hoc multi-factor test.
  • Exaction cases (e.g., Stafford Estates): approval conditioned on dedications or payments must satisfy nexus and rough proportionality tests.

The Commons alleges only a regulatory taking, specifically:

• a possible Lucas taking (if the ordinance truly eliminates all economically beneficial use of the affected property), and/or
• a Penn Central taking (if it unreasonably interferes with its planned development and investment-backed expectations).

Texas’s express “damaged” language also raises the possibility—left open on remand—that a non-physical but severe interference (e.g., blocking economically viable access or development options) could be compensable even if it falls short of federal takings standards.

V. Analysis of the Court’s Reasoning

A. Police Power Is Not a Safe Harbor Against Takings Liability

1. The Court of Appeals’ Error

The First Court of Appeals grounded its dismissal on a familiar proposition: that a “proper and reasonable” exercise of police power is not a compensable taking. Finding that the floodplain ordinance clearly promoted public health, safety, and welfare, it concluded that no taking was legally possible.

The Supreme Court of Texas rejects this categorical approach as inconsistent with decades of Texas and federal takings jurisprudence.

2. The Relationship Between Police Power and Takings

“Police power” is the government’s inherent authority to enact regulations for public health, safety, morals, and general welfare (e.g., zoning, building codes, nuisance abatement). The Court underscores:

• All property is held subject to the valid exercise of police power (City of College Station v. Turtle Rock Corp.; Lombardo v. City of Dallas).
• Governments necessarily interfere with property rights daily; most such intrusions are not compensable takings (Jim Olive Photography; Carlson).
• Conventional zoning and safety regulations typically do not require compensation, even when they reduce property value or foreclose some uses (Mayhew; Quick v. City of Austin).

But the Court strongly restates a pivotal point, quoting and building on Steele and Teague:

• Labeling a regulation “police power” does not avoid the Constitution’s compensation requirement.
• The distinction between “police power” and “eminent domain” has been called illusory, a “Serbonian bog,” and a “crazy quilt” in prior opinions (Teague; Brazos River Authority; San Antonio River Authority v. Garrett Brothers).
• The real question is not the regulatory label, but whether the government’s action crosses the line into the domain of a taking as articulated in Loretto, Lucas, and Penn Central.

3. Reading Turtle Rock Correctly

The court of appeals relied heavily on language in Turtle Rock that a city need not compensate for losses caused by the “proper and reasonable exercise of its police power.” The Supreme Court explains why this reliance is misplaced:

• In Turtle Rock, the Court was evaluating a parkland-dedication ordinance in the context of an exaction claim.
• It held that, on its face, the ordinance was not unconstitutionally arbitrary or unreasonable; it then remanded to consider whether the ordinance imposed a disproportionate burden on the particular developer.
• Crucially, Turtle Rock expressly rejected a bright-line rule and demanded a “careful analysis of the facts” in each case.

Thus, the central insight of Turtle Rock is consistent with today’s opinion: an exercise of police power that is reasonable in general can still amount to a taking as applied to a particular parcel if it crosses the lines marked by Lucas or Penn Central (or by Texas’s “damaged” clause).

4. Public Purpose vs. Public Use

Another subtle but important point is the distinction between:

• whether a law promotes a valid public purpose (a typical police-power question), and
• whether the interference with property rights requires compensation (a takings question).

Federal doctrine (e.g., Lingle v. Chevron) and Texas doctrine both treat these as separate inquiries. If there is no valid public purpose, then the government action is not merely a non-compensable regulation—it is an impermissible taking for a non-public use, which no amount of compensation can cure. If there is a valid public purpose, that merely clears one hurdle; the focus then shifts to whether the regulation goes “too far” such that compensation is required.

In short, the Court reaffirms:

A regulation adopted pursuant to valid police power may still effect a compensable taking if it causes a permanent physical occupation, totally destroys economically beneficial use, or unreasonably interferes with use and enjoyment of specific property.

B. NFIP-Driven Floodplain Regulations Are Not Categorically Immune

1. The Court of Appeals’ Reliance on Adolph

The court of appeals found decisive the Fifth Circuit’s decision in Adolph v. FEMA, 854 F.2d 732 (5th Cir. 1988). There, plaintiffs claimed that flood-elevation requirements implemented under the NFIP rendered their property unmarketable. The Fifth Circuit:

• Held that FEMA itself could not be liable for a taking because the NFIP is voluntary for local governments.
• Observed that a local ordinance tracking NFIP standards does not, “on its face,” effect a taking.

The court of appeals read Adolph as endorsing a categorical rule that ordinances consistent with NFIP standards cannot give rise to takings claims, even against local governments.

2. The Texas Supreme Court’s Narrow Reading of Adolph

Justice Boyd’s opinion carefully dissects Adolph and makes two key clarifications:

1. FEMA’s immunity ≠ local immunity. Adolph held that FEMA’s role in a voluntary program could not itself be a taking. That does not mean local ordinances implementing or exceeding NFIP criteria are insulated from constitutional challenge.
2. NFIP-consistent ordinances may still cause takings as applied. Even in cases Adolph cited, courts rejected takings claims based on the specifics: no physical invasion, no total deprivation of value, no unreasonable interference under Penn Central, or lack of causation. None of those cases announced a rule that NFIP-linked flood controls are immune from takings review as a matter of law.

The Supreme Court quotes Adolph’s actual holding about a local ordinance: it does not, on its face, effect a taking, but the “validity under state law of the actual application of this ordinance to a particular piece of property depends upon the facts involved in each case.” That language directly contradicts the categorical immunity the court of appeals thought it found.

3. Application to Houston’s Ordinance

Houston amended its ordinance to require foundations at least two feet above the 500‑year flood level, in anticipation of stricter FEMA mapping and standards that, in fact, were never implemented. Thus:

• The ordinance is more restrictive than NFIP currently requires.
• But even if it perfectly matched NFIP criteria, the Court holds that NFIP-consistency is irrelevant to whether a taking occurred in Texas.

On remand, the trial court must decide, based on the evidence, whether the ordinance:

• leaves The Commons with no economically beneficial use in the affected areas (Lucas),
• imposes an unreasonable interference when the Penn Central factors are applied, and/or
• “damages” the property in the Texas-constitutional sense (which could be broader than federal law).

The takeaway: local governments cannot rely on NFIP compliance as a blanket shield against state takings claims. They must expect case-specific, as-applied scrutiny when their floodplain regulations impose especially harsh burdens on particular properties.

C. Ripeness and the “Final Decision” Requirement

1. General Principles

Ripeness is a component of subject-matter jurisdiction, reviewed de novo. In the takings context, a claim is not ripe until there is a final decision about how the regulation applies to the specific property. Otherwise, courts cannot determine whether the regulation has gone “too far.”

The typical requirements for finality:

• The owner must apply for permission to develop under the regulation.
• If denied, the owner must generally seek a variance or some form of relief.
• However, the process need not be exhausted where further applications or variance requests would be “futile.”

Federal and Texas cases like Mayhew, Palazzolo v. Rhode Island, Pakdel v. San Francisco, and Herrington v. Sonoma County all emphasize that:

• Finality is a modest requirement.
• “De facto” finality is sufficient—the government must “commit to a position.”
• Government cannot impose repetitive or unfair land-use procedures to avoid reaching a final decision.

2. The City’s Conduct and Its Litigation Position

After the first suit was dismissed for lack of ripeness, the developer reasonably tried to obtain the necessary approvals:

• It submitted applications for floodplain-development approval under the old standard.
• The City:
  • did not act on one;
  • rejected later applications for lacking structural plans (which no developer could produce until lot purchasers designed homes);
  • insisted no site-wide/blanket permit was possible; and
  • never indicated any willingness to permit deviations from the new elevation requirements.

In this Court, the City went further, arguing for the first time that:

• The Commons, as a developer rather than a homebuilder, “has no right to obtain the permit.”
• The takings claim “is not ripe on any questions presented and cannot ever ripen.”

The Court reads these statements, combined with the procedural history, as conclusive proof of finality. In Justice Boyd’s words, they “clearly indicate absolute finality.”

3. The Court’s Ripeness Holding

The Court holds:

• The developer was not required to engage in endless, futile re-applications and variance requests.
• A government “may not burden property by imposition of repetitive or unfair land-use procedures in order to avoid a final decision.”
• On these facts, the City’s conduct and arguments show that further administrative efforts “would make no difference.”

Accordingly, the regulatory-takings claim is ripe.

This is a notable clarification for future litigants: governmental delay, circular procedural demands, and litigation concessions that the owner can never obtain the requested permission can collectively satisfy the finality requirement, even in the absence of a formal written permit denial.

D. Standing and Vested Rights

1. Vested Right in the Property vs. Vested Right in Prior Regulations

The City contended that The Commons lacked standing because it had only a “mere expectancy” (not a vested right) in developing under the former elevation standard. The Court responds:

• Standing in a takings case does not require a vested right in the continuation of prior regulations.
• What matters is a vested ownership interest in the property allegedly taken or damaged. (City of Sunset Valley)
• The Commons unquestionably holds such an ownership interest in the lots at issue.

In other words, even though regulations can change, if the new regulations go so far as to “take” or “damage” the property, the owner has standing to seek just compensation.

2. Argument That Only Builders Are Affected

The City also argued that The Commons lacked standing because:

• It sells lots; it does not build houses.
• The ordinance, therefore, restricts only where houses can be built, not the developer’s property interest.

The Court rejects this formalism. The ordinance allegedly:

• Eliminates or severely depresses the market value of the affected lots.
• Destroys the financial assumptions on which the entire 3,300‑acre development was structured.

Those are direct injuries to the developer’s property rights. The fact that the immediate building will be done by third parties does not break the causal chain or strip the landowner of standing.

3. Redressability

Finally, the City implied a lack of redressability, contending that courts cannot know how the ordinance will actually be applied without building-specific plans, and so cannot determine whether a taking occurred.

The Court views this as a repackaged ripeness argument and finds it unpersuasive:

• The complaint alleges that the ordinance, as written and as consistently applied, makes it economically infeasible or impossible to develop the lots.
• If that allegation is proven, an award of compensation would “remedy the alleged injury,” satisfying redressability. (Meyers; Heckman)

Thus, The Commons meets all three components of constitutional standing: injury-in-fact, traceability, and redressability.

VI. Role of Precedents in Shaping the Decision

A. Texas Takings and Immunity Cases

• Steele v. City of Houston:
  • Key authority for the proposition that Article I, § 17 itself waives immunity and that “damaged” is distinct from “taken.”
  • Stresses that compensation is required even when property is merely “damaged” for public use and that “police power” labels do not negate takings liability.
• City of Houston v. Carlson and City of Dallas v. VSC:
  • Reaffirm that the Texas Constitution waives immunity for takings claims.
  • Provide the jurisdictional lens applied at the outset of the opinion.
• Harris County Flood Control Dist. v. Kerr:
  • Demonstrates that flood-control programs can lead to takings claims, though the plaintiffs in Kerr lost on causation and intent.
  • Supplies doctrinal framing for the causation and affirmative-conduct elements.

B. Regulatory-Takings Canon: Loretto, Lucas, Penn Central, and Texas Counterparts

• Sheffield Development Co. v. City of Glenn Heights, Mayhew v. Town of Sunnyvale, Edwards Aquifer Auth. v. Day:
  • Adopt the Penn Central factors under Texas law and discuss per se takings under Lucas and Loretto.
  • Provide the doctrinal scaffolding for distinguishing between per se and ad hoc takings, and for examining investment-backed expectations and economic impact.
• Jim Olive Photography v. University of Houston System:
  • Clarifies that not all serious economic interferences amount to takings, particularly in the absence of physical invasion.
  • Here, used to emphasize that many daily interferences are non-compensable, but that does not foreclose serious as-applied claims.
• Town of Flower Mound v. Stafford Estates:
  • Provides the “essential nexus” and “rough proportionality” test for exaction-based takings, refining Turtle Rock.
  • Demonstrates that even infrastructure-oriented police-power ordinances can create takings liability if they demand disproportionate concessions.

C. Police Power vs. Takings: Teague, DuPuy, Stewart, Turtle Rock

• DuPuy v. City of Waco:
  • Important early case recognizing that “damaged” in § 17 covers non-physical interferences (e.g., substantial impairment of access).
  • Rebuts the notion that physical invasion is always necessary for compensation; informs the Court’s open-ended treatment of “damage.”
• City of Austin v. Teague:
  • Critiques the police-power/eminent-domain dichotomy as doctrinally unhelpful.
  • Emphasized again in this opinion to show that labels do not resolve whether compensation is owed.
• City of Dallas v. Stewart and Lombardo v. City of Dallas:
  • Confirm the breadth of police power (e.g., nuisance abatement), but also illustrate that due process and takings protections can still apply in extreme cases.
• City of College Station v. Turtle Rock:
  • Clarifies that “proper and reasonable” police-power regulations usually are non-compensable.
  • Yet also stands for the need for as-applied analysis and rejects a bright-line immunity rule—the key point the court of appeals overlooked.

D. NFIP-Related and Floodplain Decisions: Adolph, Texas Landowners, and Others

Though not binding in Texas courts, several federal and out-of-state decisions are used to situate NFIP-based regulations in the broader takings landscape:

• Adolph v. FEMA:
  • Important for its recognition that NFIP participation is voluntary, and its refusal to find a per se taking by FEMA.
  • Cited carefully to reject the lower court’s overbroad reading.
• Texas Landowners Rights Ass’n v. Harris (D.D.C. 1978), aff’d 598 F.2d 311 (D.C. Cir. 1979):
  • Rejected takings claims based on NFIP-related restrictions where owners retained economic use and value.
  • Illustrates that floodplain restrictions can survive Lucas/Penn Central scrutiny, but do not establish categorical immunity.
• Other state cases (Maple Leaf Inv., Pope v. City of Atlanta, Dur-Bar Realty, Grenier, Turner v. County of Del Norte, Responsible Citizens v. Asheville):
  • Used to illustrate recurring reasons flood-control regulations have survived takings challenges: lack of total deprivation, retained practical uses, or nature (not government) as the primary source of loss.
  • But the Texas Court emphasizes these as examples of fact-specific analyses, not as the basis for a blanket rule.

E. Ripeness and Standing: Mayhew, Palazzolo, Pakdel, Heckman, etc.

• Mayhew v. Town of Sunnyvale:
  • Texas’s leading case on regulatory-takings ripeness, requiring a final decision and generally at least one variance attempt.
  • Also acknowledges the futility exception, which The Commons successfully invokes.
• Palazzolo v. Rhode Island:
  • Establishes that the owner need not pursue endless, futile administrative applications.
  • Emphasizes that government may not use “repetitive or unfair land-use procedures” to avoid a final decision—quoted directly here.
• Pakdel v. City & County of San Francisco:
  • Clarifies that the finality requirement is “relatively modest” and can be met by “de facto” finality.
  • Inspires the Court’s conclusion that the City’s litigation stance itself satisfies finality.
• Heckman v. Williamson County, Meyers:
  • Reinforce that standing requires injury-in-fact, traceability, and redressability.
  • Support the conclusion that compensation would redress the developer’s alleged economic injury.

VII. Complex Concepts Simplified

A. Inverse Condemnation

“Condemnation” usually means a formal eminent-domain process where government sues to take property, and a court sets just compensation. “Inverse condemnation” flips the roles:

• The property owner sues the government.
• Allegation: the government has already taken or damaged property (through regulation, physical invasion, or other conduct) without paying compensation.
• Remedy: an order requiring the government to pay adequate compensation for that taking or damage.

B. Police Power vs. Takings Power

• Police power: authority to regulate in the interests of health, safety, and welfare (e.g., building codes, zoning, environmental protections).
• Takings (eminent-domain) power: authority to appropriate private property for public use, with compensation.

In practice these powers overlap. A law can be both:

• a valid police-power regulation (pursuing a legitimate public purpose), and
• so burdensome on a specific parcel that it constitutes a “taking” requiring compensation.

C. 100-Year and 500-Year Floodplains

• 100-year floodplain: area with a 1% chance of flooding in any given year (base flood or “special flood hazard area”).
• 500-year floodplain: area with a 0.2% annual chance of flooding.

The terms are misleading; a “100‑year flood” can occur in back‑to‑back years. The critical point for this case: Houston moved from requiring elevation one foot above the 100‑year flood to two feet above the 500‑year flood—a major upward shift in required building heights.

D. Loretto, Lucas, and Penn Central Tests

• Loretto: If a regulation authorizes a permanent physical occupation of property (e.g., cable boxes on buildings), it is a per se taking, regardless of how small the invasion.
• Lucas: If a regulation leaves the owner with no economically beneficial or productive use of the property, it is a per se taking (subject to “background principles” like nuisance law).
• Penn Central: For all other significant regulatory burdens, courts weigh:
  • The economic impact on the property owner.
  • The extent of interference with reasonable, investment-backed expectations.
  • The character of the governmental action (e.g., broadly applicable vs. targeted; fairness; opportunity for relief).

E. National Flood Insurance Program (NFIP)

• Federal program created in 1968 to make flood insurance available in flood-prone areas.
• Insurers offer subsidized coverage only in communities that:
  • adopt and enforce floodplain management ordinances, especially for 100‑year flood areas.
• Local participation is voluntary but practically important; without NFIP, mortgage lending and rebuilding in flood zones become much more difficult.

This case confirms that local choices made to participate in NFIP do not create an automatic exemption from state constitutional takings rules.

F. Ripeness, Final Decision, and Variances

• Ripeness: Courts avoid deciding abstract or hypothetical disputes. A claim is “ripe” when the dispute has sufficiently developed and the impact on the plaintiff is concrete.
• Final decision: In land-use cases, courts generally require the government to make a final, definitive decision applying the regulation to the property before a takings claim is heard.
• Variance: A formal request for an exception from zoning or regulatory requirements. Seeking a variance can be part of the “final decision” process.

In this case, the Court finds that further attempts to get permission or a variance would have been futile, satisfying the finality requirement.

VIII. Likely Impact and Open Questions

A. For Local Governments and Floodplain Regulation

This decision does not condemn floodplain regulation; it does, however, place important limits on how municipalities may rely on such regulation:

• No categorical immunity. Cities cannot assume that labeling an ordinance as flood-safety or NFIP-compliant insulates it from takings review. Courts will examine how the regulation affects particular properties.
• Administrative process design matters. Cities that:
  • Provide no workable mechanism for site-wide or development-level relief,
  • Refuse to act on applications without offering clarity or alternatives, and
  • Then argue that no permit can ever be granted,
  risk a finding of “de facto” finality and ripeness for takings suits.
• Tailoring and flexibility are advisable. More nuanced tools (e.g., variances, alternative mitigation measures, elevation credits, buyout programs) will help cities achieve resilience goals and reduce exposure to takings liability.

B. For Developers and Property Owners

The case offers several strategic lessons:

• Gather detailed economic evidence. On remand, The Commons must prove the extent of lost value and whether any economically viable uses remain. Future plaintiffs should likewise document:
  • pre- and post-regulation valuations,
  • lost profits or financing arrangements,
  • marketability and alternative uses.
• Document interactions with permitting authorities. Emails, letters, application forms, and oral representations will be crucial evidence of “finality” and potential futility of further applications.
• Consider Texas’s “damaged” clause. Plaintiffs might frame claims not only as federal-style “takings” but also as “damage” to property under Article I, § 17, especially where access, infrastructure, or partial usability is compromised rather than wholly extinguished.

C. For Texas Takings Doctrine

Doctrinally, this case:

• Reinforces the distinctiveness of the Texas Constitution. The Court again highlights the broader protection offered by “taken, damaged, or destroyed,” without yet fully mapping its outer boundaries. That leaves open room for future expansion beyond federal doctrines.
• Reaffirms as-applied analysis. Bright-line immunity rules (e.g., “police power” or “NFIP compliance” as categorical shields) are inconsistent with the case-by-case approach of Penn Central and Texas precedents.
• Clarifies ripeness in a more property-owner-friendly direction. By emphasizing “de facto” finality and condemning “repetitive or unfair” procedures, the Court lowers the risk that procedural maneuvering will bar substantive review of serious takings claims.

D. Open Questions on Remand

On remand, the trial court will face several unresolved substantive issues:

• Does the ordinance effect a Lucas taking?
  • Is it truly impossible to make any economically beneficial use of the 557 allegedly affected lots?
  • Do remaining uses (e.g., open space, recreational uses, reduced-density development) retain enough value to defeat a Lucas claim?
• Does the ordinance effect a Penn Central taking?
  • What is the magnitude of the economic impact relative to overall project value and investment?
  • Were The Commons’s investment-backed expectations reasonable given preexisting floodplain rules and the inherent risk of floodplain development?
  • What is the “character” of Houston’s action—broadly applicable in response to a major disaster, or unduly harsh in the way it singles out highly valuable lakefront lots?
• How does the Texas “damaged” clause apply?
  • Does rendering a large portion of property effectively undevelopable for its planned high-end residential use constitute “damage” distinct from “taking”?
  • Can non-physical interference with infrastructure-based access or utility constitute compensable “damage”?

These questions ensure that The Commons will likely be cited not only for its procedural holdings but, after remand and perhaps later appeals, for its substantive application of Lucas, Penn Central, and the “damaged” clause in the floodplain context.

IX. Conclusion

The Commons of Lake Houston v. City of Houston is less about resolving a particular developer’s takings claim than about clearing away doctrinal obstacles that would have prevented such claims from being meaningfully adjudicated.

The Court’s central contributions are:

• Reaffirming that valid police-power regulations, including flood-safety ordinances, may still effect compensable takings when they cross the thresholds set by Lucas and Penn Central, or when they “damage” property under Texas’s broader constitutional text.
• Clarifying that NFIP participation and FEMA-aligned standards do not confer categorical immunity from state takings claims; instead, courts must conduct as-applied, fact-specific analyses.
• Strengthening the ripeness doctrine for property owners by recognizing that de facto finality, coupled with futile or unfair administrative processes and unequivocal litigation positions, can satisfy the final-decision requirement.
• Confirming that developers who own the land at issue have standing to pursue takings claims, even if they are not the ultimate homebuilders and even if regulations change mid-project.

By reversing the categorical approach of the court of appeals, the Supreme Court preserves the constitutionally mandated balance between private property rights and the legitimate demands of public safety and flood-risk management. Going forward, Texas courts will continue to police that boundary through careful, fact-intensive adjudication rather than through broad immunizing doctrines. In an era of increasing climate-related regulation, The Commons ensures that flood-resilience efforts proceed with full recognition of the costs imposed on particular landowners—and of the constitutional requirement that such costs, when they go “too far,” be shared by the public as a whole through just compensation.