The Texas Supreme Court has said it’s OK for the government to reduce your property value by ninety percent if the government’s regulations are “rationally related to its goal …” and to its “interest.” Here is part of its 1998 opinion on this issue in Quick v. City of Austin, regarding Austin’s Save Our Springs Ordinance:
“We perceive that the real crux of the Petitioners’ complaint is that the Ordinance unreasonably reduces property values and requires excessive expenditures in order to comply with its provisions. The Petitioners established that the Ordinance will result in at least a $225 million decrease in property values in regulated areas, and that the Ordinance has caused some parcels of land to lose ninety percent of their value. The City has not refuted this evidence.
“However, in this case, the fact that the Ordinance severely impacts some property values does not make it invalid, arbitrary, unreasonable, inefficient, or ineffective in its attempt to control water quality. While the Ordinance’s impervious cover limitations undoubtedly substantially affect the value of some property parcels, such limitations are a nationally-recognized method of preserving water quality. Further, it is indisputable that limiting pollutants in runoff water will aid in preserving water quality. We therefore conclude that the Ordinance’s provisions are rationally related to its goal of protecting water quality.
“Because we have concluded that the Ordinance is rationally related to the governmental interest in protecting water quality, the City has the right to significantly limit development in watershed areas in furtherance of this interest.”