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Traditional land use law categorizes governmental activities that affect the value of private property as exercises of either the state's police power or eminent domain power. This dichotomy has created what Professor John J. Costonis describes as the "disparity issue": if in a legitimate exercise of its police power a state reduces the value of land, no compensation is required; if the governmental action devalues land too much, however, it is deemed a taking within the eminent domain power and full compensation according to the land's "highest and best use" is required. Often, this compensation exceeds the land's present value.

This Article will address the question "[W]hy must compensation be pegged to the prohibitively expensive 'highest and best use' level in cases of overregulation?"' It is submitted that in some cases the highest and best use principle is inappropriate. If some compensation can be justified when the state exercises its police power, then less than full compensation may be appropriate when the state exercises its eminent domain power.

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