The United States Supreme Court has raised the legal standard for a municipality to use land use exactions for sustainable development. Land use exactions frequent local government affairs and occur when a government demands a dedication of land or money in exchange for a municipal approval, such as a permit. Koontz v. St. Johns River Water Management District found certain proposed government exactions for land use permits as “demands” on the applicant and required a “‘nexus' and ‘rough proportionality’ between the property that the government demands and the social costs of the applicant's proposal,” regardless of whether the exaction was a condition precedent or a condition subsequent. Even without incurring a “takings” for purposes of the Fifth and Fourteenth Amendments to the United States Constitution, if government-imposed exactions are found to be “[e]xtortionate demand[s],” this would still “run afoul of the Takings Clause not because they take property but because they impermissibly burden the right not to have property taken without just compensation.” Thus, if there is no “essential nexus” and “rough proportionality,” the exaction is an actionable “unconstitutional condition.” After Koontz, this standard now applies even if an applicant has only been asked to make payments to improve public land. However, this comment argues that municipalities can use environmental impact review to shield themselves from the threat of uncertain, broad, and costly litigation during negotiations with developers.

Part II of this paper discusses the import of municipal exactions to environmental stewardship and sustainable development. Part III provides an overview of the Unconstitutional Conditions Doctrine, which played a decisive role in the Koontz case. Part IV centers around the majority and dissenting opinions in Koontz, as well as the issues settled, and those now raised, by the Court's ruling. Part V analyzes the New York State Environmental Quality Review Act (SEQRA) and focuses on its procedural and substantive requirements. Comparative treatment is also given to the environmental review statutes in the States of California and Washington. Part VI concentrates on case illustrations that reveal how these statutes satisfy the Unconstitutional Conditions Doctrine, as extended by Koontz. This Part focuses chiefly on SEQRA, but also explores possible outcomes under its analogous state counterparts. Part VII concludes with potential ramifications for local environmental law and sustainable development.