272 U.S. 365 (1926), argued 27 Jan. 1926, reargued 12 Oct. 1926, decided 22 Nov. 1926 by vote of 6 to 3; Sutherland for the Court, Van Devanter, McReynolds, and Butler in dissent. During the first quarter of the twentieth century, many municipalities, including Euclid, Ohio, enacted comprehensive zoning schemes. These zoning ordinances were challenged on various constitutional grounds, and state courts disagreed as to their constitutionality. The zoning ordinance enacted by the Euclid village council is noteworthy because litigation over its validity reached the Supreme Court. In Euclid v. Ambler Realty Co., the justices concluded that zoning was a constitutional exercise of the police power, thereby laying the foundation for virtually universal implementation of this form of land use regulation.
In 1922, Euclid was a community of fewer than ten thousand citizens located in the Cleveland metropolitan area and in the path of urban expansion. The village council adopted a comprehensive zoning ordinance dividing the town into use districts, area districts, and height districts. These districts or zones overlapped, so that development of each parcel of land in the community was restricted as to use, area, and height. The use limitations, the controversial feature of the ordinance, were cumulative in nature. With a few minor exceptions, single-family dwellings were the only structures permitted in the most restrictive use zone (U-1). Progressively more intensive uses were permitted in five other use zones (U-2 through U-6), with virtually all types of residential, commercial, and manufacturing use permitted in the least restrictive zone (U-6).
Ambler Realty Co. owned a large, unimproved tract of land in Euclid. It apparently was holding this sixty-eight-acre parcel for investment, planning to sell it for industrial development. A considerable portion of the property was zoned U-6 and thus could be used for industrial purposes. However, the rest of the property was zoned U-2 or U-3, thereby being significantly restricted and substantially reduced in value.
Ambler Realty Co. filed suit in federal district court challenging the validity of the Euclid zoning ordinance on due process, equal protection, and taking grounds. The court ruled in favor of the landowner, finding that its property had been taken without just compensation, and granted an injunction prohibiting the village from enforcing the ordinance.
The Supreme Court reversed the lower court's decision, sustaining the constitutionality of zoning as a means of regulating private land use. The Court initially noted that zoning could only be justified as an exercise of the police power to promote the public welfare. Drawing an analogy to nuisance law, the Court concluded that a zoning arrangement must be viewed in a given context. The Court focused on the prohibitory aspects of the Euclid ordinance, particularly the exclusion of commercial enterprises and apartment buildings from certain residential zones, and found a rational relationship between these restrictions and the health, safety, and general welfare of the citizens of the municipality. It noted a number of factors that established this nexus, including the minimization of traffic hazards and the reduction of noise. The Court stressed that it was upholding the zoning ordinance in its “general scope.” It, however, recognized the possibility that an ordinance might be unconstitutional as applied to a specific parcel.