1034
Kennedy, J., concurring in judgment
ket value or resale potential. This is a curious finding, and I share the reservations of some of my colleagues about a finding that a beachfront lot loses all value because of a development restriction. Post, at 1043-1045 (Blackmun, J., dissenting); post, at 1065, n. 3 (Stevens, J., dissenting); post, at 1076 (statement of Souter, J.). While the Supreme Court of South Carolina on remand need not consider the case subject to this constraint, we must accept the finding as entered below. See Oklahoma City v. Tuttle, 471 U. S. 808, 816 (1985). Accepting the finding as entered, it follows that petitioner is entitled to invoke the line of cases discussing regulations that deprive real property of all economic value. See Agins v. City of Tiburon, 447 U. S. 255, 260 (1980).
The finding of no value must be considered under the Takings Clause by reference to the owner's reasonable, investment-backed expectations. Kaiser Aetna v. United States, 444 U. S. 164, 175 (1979); Penn Central Transportation Co. v. New York City, 438 U. S. 104, 124 (1978); see also W. B. Worthen Co. v. Kavanaugh, 295 U. S. 56 (1935). The Takings Clause, while conferring substantial protection on property owners, does not eliminate the police power of the State to enact limitations on the use of their property. Mugler v. Kansas, 123 U. S. 623, 669 (1887). The rights conferred by the Takings Clause and the police power of the State may coexist without conflict. Property is bought and sold, investments are made, subject to the State's power to regulate. Where a taking is alleged from regulations which deprive the property of all value, the test must be whether the deprivation is contrary to reasonable, investment-backed expectations.
There is an inherent tendency towards circularity in this synthesis, of course; for if the owner's reasonable expectations are shaped by what courts allow as a proper exercise of governmental authority, property tends to become what courts say it is. Some circularity must be tolerated in these matters, however, as it is in other spheres. E. g., Katz v.
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