What are the three factors in the Penn Central balancing test?

• A. Economic impact, investment-backed expectations, and the character of government action.
• B. Public necessity, proportionality, and legislative intent.
• C. The owner's wealth, location, and the type of property.
• D. The duration and frequency of regulation.

Answer: (A)

In regulatory takings analysis, the Penn Central balancing test looks to see when a government regulation goes so far as to require compensation. The three factors considered are: the economic impact of the regulation on the owner, the investment-backed expectations the owner had when acquiring the property, and the character of the governmental action taken. The economic impact focuses on how much value or use is lost because of the rule. The investment-backed expectations look at what a reasonable owner anticipated at the time of purchase or investment, and whether the regulation defeats those expectations. The character of the governmental action examines the nature of the regulation—whether it’s a physical appropriation or something like a land-use regulation pursued for public objectives—and how that nature weighs against the disruption to the owner’s rights.

Together these factors guide a flexible, case-by-case weighing rather than a single rigid formula. For example, even a substantial economic hit might be balanced against strong, legitimate public purposes and a predictable regulatory framework that didn’t destroy all reasonable use, while a direct physical taking or a regulation that utterly eliminates all economically beneficial use would tilt more toward compensation.

The other choices mix elements that aren’t part of the Penn Central trio. They don’t capture the three-factor framework used to evaluate takings beyond per se physical seizures, and they don’t center on the relationship between value, expectations, and the action’s nature that Penn Central relies on.