Requiem for Regulation

Garrett Power recently posted "Requiem for Regulation", published recently in Environmental Law Reporter. From the article:

By the 1970s, most students of government had come to agree... that American society needed more and better planning. According to the consensus viewpoint, free markets no longer had the answers for the overcrowded cities, stressed natural environments, and acute social problems. The national government needed to take command over water and air quality, and state and local governments needed top-down federal aid. All three levels of government must follow the example set by the social democracies of Western Europe and put in place regulations that would plan for a better society. American governments had the constitutionally requisite powers. State and local governments were vested with a “police power” to promote “public health, safety, morals, or general welfare.” The federal government was vested with a more specific power to “regulate Commerce . . . among the several States.” Any new regulations however, might deprive some private owners of their property rights and might deprive some capitalists of their “investment-backed expectations.” And the U.S. Constitution prohibited all governments from “taking” private property or “impairing” contract rights. The Constitution even more sharply curtailed the regulatory power of the national government to matters of interstate trade. When would bold new plans for a Great Society not run afoul of the Constitution?

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By the three-quarter mark of the 20th century, a remarkable set of Supreme Court precedents had swollen the regulatory powers of governments while shrinking private rights to property and contract. The Court had given the regulators wide discretion.

Zoning map of Euclid Village, Ohio, at issue in Village of Euclid v. Ambler Realty Co. (1926),
 a leading case on the constitutionality of land use regulation

After discussing a number US Supreme Court decisions, Power goes on:

Post-Penn Central, there appeared to be no real obstacles—political or constitutional—to the creation of a well-planned, pollution-free society. Congress established national standards for “clean air” and “clean water.” When the Nixon Administration’s federal land use initiative was left in the lurch by President Richard Nixon’s resignation as he faced impeachment, state governments undertook their own “quiet revolution in land use control.” State laws addressed the complex problems of reallocating responsibilities between state and local governments. At the local level, detailed zoning maps had been supplanted by development agreements. Negotiations between the local jurisdiction and the landowner contractually fixed the terms and conditions upon which projects may go forward. The developer was contractually guaranteed project approval, while the locality benefited from customized performance standards and assurances that infrastructure demands would be met.

But things changed under the Rehnquist and Roberts courts:

During the first two-thirds of the 20th century... the “judicial liberalism” in [US Supreme] Court precedents had created a living Constitution that changed with the times. The Justices took it upon themselves to balance public benefits against private losses and approved bold government plans for a better society. But in the years since then, the Court’s judicial conservatives have sometimes shown renewed determination to curtail governmental activity in general, and to limit federal, state, and local planning in particular.