I dissent.
In my judgment the majority opinion, although avowedly relying upon decisional precedents, actually represents a radical alteration of existing California law. The resulting change would not in itself cause me concern, if I were satisfied that it was responsive to a growth of principle or that it would in all probability improve the applicable rule of law. Nevertheless, I feel that however pragmatically desirable the majority may view the result in this case, the rule which they have created in achieving it may only confuse the trial courts of this state and in the long run may prove to be far less palatable to this court.
Admittedly, the problems incident to the elimination of nonconforming uses are troublesome ones.* 1 Ten years ago there was general agreement that the fundamental problem facing zoning was the inability to eliminate the nonconforming use.2 Since their existence limits the effectiveness of land use controls, state and local legislatures have sought ways to neutralize the effect of such uses and finally to eliminate them. Among the methods available to accomplish this are: (1) condemnation through the power of eminent domain; (2) abatement through the law of nuisance; (3) forbidding resumption of a nonconforming use after a specified period of nonuse or “abandonment”; (4) prohibiting or limiting the right of the owner to repair, extend, or rebuild the nonconforming structure; (5) offering inducements either to move or to make the use comply with the ordinance’s requirements.
The early optimism about the spontaneous withering away of nonconforming uses has proven erroneous; in fact, the very zoning ordinances which make uses nonconforming often invest them with a monopolistic position that enables them to survive. In the face of this, and of the fiscal impracticality of some of the alternatives listed above, planners have con-*882eluded that “the only positive method of getting rid of nonconforming uses yet devised is to amortize the nonconforming building. That is, to determine the normal useful remaining life of the building and prohibit the owner from maintaining it after the expiration of that time.” (Italics added.)* *3 (Crolly and Norton, Termination of Nonconforming Uses (1952) 62 Zoning Bulletin 1; quoted in City of Los Angeles v. Gage, supra, 127 Cal.App.2d 442, 455.)
Some courts have taken the position that provisions for amortization of nonconforming uses are necessarily invalid, regardless of the length of time provided for the use to continue and regardless of the benefit to the public in securing uniformity within zone use districts. The most articulate and persuasive recent statement of this position coming to my attention is contained in Hoffmann v. Kinealy (Mo. 1965) 389 S.W.2d 745, where the Supreme Court of Missouri held that abatement of preexisting nonconforming uses in conjunction with an amortization period was unconstitutional. The court reasoned that since a preexisting lawful use could not properly be terminated immediately,4 such a taking should not be permitted to be achieved “by the simple expedient of postponing such taking for a ‘reasonable’ time.” (389 S.W.2d at p. 753.) The court remarked that it would be a “strange and novel doctrine indeed which would approve a municipality taking private property for public use without compensation if the property was not too valuable and the taking was not too soon, . . .” (389 S.W.2d at p. 753.)
Although an early case, Jones v. City of Los Angeles (1930) 211 Cal. 304, at p. 309 et seq. [295 P. 14], seemed to presage adoption of this position in California, subsequent cases have firmly, and I believe very wisely, committed us to the proposition that “zoning legislation looks to the future in regulating district development and the eventual liquidation of noncon*883forming uses within a prescribed period commensurate with the investment involved.”5 (Livingston Rock etc. Co. v. County of Los Angeles (1954) 43 Cal.2d 121, 127 [272 P.2d 4].) Livingston and the nearly contemporaneous case of City of Los Angeles v. Gage, supra, 127 Cal.App.2d 442, which relied on it, elaborated the basic philosophical foundation for approval of compelled elimination of nonconforming uses within specified periods. “Implicit in the theory of the police power,” we said in Livingston, “as differentiated from the power of eminent domain, is the principle that incidental injury to an individual will not prevent its operation, once it is shown to be exercised for proper purposes of public health, safety, morals and general welfare, and there is no arbitrary and unreasonable application in the particular case. [Citations.]” (43 Cal.2d at p. 127.) And in Gage, the court pointed out, in an often quoted passage, the arbitrariness inherent in the distinction between the permissible impact on land values of “prospective” zoning ordinances and the impermissible infringement upon “vested rights” of attempts to eliminate nonconforming uses. The court there said, “The distinction between an ordinance restricting future uses and one requiring the termination of present uses within a reasonable period of time is merely one of degree, and constitutionality depends on the relative importance to be given to the public gain and to the private loss. . . . The elimination of existing uses within a reasonable time does not amount to a taking of property. . . . Use of a reasonable amortization scheme provides an equitable means of reconciliation of the conflicting interests in satisfaction of due process requirements.” (City of Los Angeles v. Gage, supra, 127 Cal.App.2d 442, at p. 460.)
Since these seminal decisions over 15 years ago this court has not addressed itself to the validity of provisions for the removal of nonconforming uses within specified amortization periods. The Courts of Appeal have wrestled with the difficult considerations implicitly required to be dealt with by our directive to uphold amortization periods if, but only if, they are “reasonable.” Illustrative of the varying results and the diverse formulations *884of the applicable standards are: City of La Mesa v. Tweed & Gambrell Planing Mill (1956) 146 Cal.App.2d 762 [304 P.2d 803] (holding invalid as a taking of property without compensation a five-year tolerance period as applied to a 20-year-old building with an estimated remaining economic life of 20 years); McCaslin v. City of Monterey Park, supra, 163 Cal.App.2d 339 (holding invalid a 60-day amortization period as applied to a gravel pit operation); City of Santa Barbara v. Modern Neon Sign Co. (1961) 189 Cal.App.2d 188 [11 Cal.Rptr. 57] (holding invalid as a taking of property without due process and/or without just compensation a one-year period as applied to recently installed moving advertising signs); National Advertising Co. v. County of Monterey, supra, 211 Cal.App.2d 375 (holding a five-year period valid as applied to advertising signs of the type involved in the instant case.)
As I have already indicated, analyses of the constitutional problems presented in these cases are not precisely uniform. The results of the cases probably satisfy neither the desire of local planners for autarchy nor the demands of some economists for rigorous social cost analysis. However, as accommodations of the clash between governmental initiative for the public welfare on the one hand and private security in the ownership of property on the other, they have been as satisfactory as can be expected. But this freedom of trial and intermediate appellate courts, thus far intelligently exercised, to decide the questions of reasonableness through a process of balancing public benefit against private detriment will no longer exist under the rationale of the majority opinion. The majority upset the judgment of the trial court which applied the heretofore approved balancing test. They substitute, however, not a conclusion that the trial court’s decision was arbitrary in light of the facts of this case, but a litmus paper test for reasonableness: the concept of depreciation, fashioned solely from guideline materials developed for income tax purposes by the United States Internal Revenue Service.
Briefly, and I hope fairly restated, the reasoning of the majority proceeds as follows: Under the amortization regulations of the Internal Revenue Service, 31 of plaintiff’s 42 advertising signs have been “fully amortized.”6 The trial court found that these signs were kept in good repair and accordingly, had many years of useful life remaining. This, however, say the majority, is irrelevant since “repairs cannot be relied upon to defeat zoning legislation which looks to the future and the eventual liquidation of non*885conforming uses.”7 In addition, these signs may have some value even after they are removed from their present locations. Therefore, so the majority conclude, the requirement that they be dismantled and removed within one year is reasonable.
I am not persuaded that the majority have grounded their opinion upon a simple failure by plaintiff to meet its burden of proof in demonstrating that the grace period of the ordinance is, as applied to its billboards, so short as to be unreasonable. Were this the case, although I would still consider the disposition erroneous,8 I would be less apprehensive about the future development of this area of the law. However, it seems plain to me that the implicit rationale of the majority opinion is that recovery of investment is the controlling factor in determining the reasonableness of an amortization provision. If the reason for reversal of the trial court’s judgment as to the amortized, signs is in fact that plaintiff fell short of demonstrating unreasonableness (principally because it neglected to provide evidence of “present actual value” of the signs) I do not understand how *886this justifies affirmance of the judgment as to the unamortized signs. As the majority point out, the evidence as to both classes of signs was identical.
Rather than infer that the majority have reached a result inconsistent with their rationale, I am compelled to conclude that the different dispositions as to amortized and unamortized signs reflect a considered judgment that once initial investment is recovered through deductions from business income under 26 U.S.C.A., section 167, any amortization period, however, brief, is reasonable.
I do not think that this is logically persuasive, economically sound or likely to produce fairer or more satisfying decisions by the courts below in future cases involving the removal of nonconforming uses. It seems to me that instead of providing a predictable and uniform standard by which to determine the reasonableness of zoning ordinances, the majority have established a mechanical and illusory criterion.
Under our decision in Livingston, supra, 43 Cal.2d 121, we indicated that the focus of judicial inquiry is on the “reasonableness” of a particular amortization period as applied to a particular piece of property or its use. What this entails, really, is a judgment whether, in light of the public ends to be served by removal, this quantum of private loss is an acceptable one. To put it somewhat differently, our holding in Livingston requires the determination as to whether or not the nonconforming interest affected by a given ordinance is too substantial to justify its removal in a stipulated period of time having in mind the objectives of the ordinance.
This analysis demands, at the very least, an accurate measure of the private loss.9 In some cases this may be accomplished by determining the difference between the fair market value of the property' on the effective date of the ordinance and its fair market value when the nonconformity is eliminated.10 In others, the loss to the property owner may be affected by such factors as “the expense and practicality of a relocation, the loss of good will occasioned by a relocation, the economy of converting the physical facilities into a conforming use, and the financial benefits derived by the land owner from operation under the monopoly given him by the *887zoning ordinance.” (See Note, The Abatement of Pre-existing Nonconforming Uses Under Zoning Laws: Amortization (1962) 57 Nw.U.L.Rev. 323, 332.)
Certainly, recovery of an owner’s original investment is one factor to be considered in the balancing of public benefits and private losses. But it is simply inaccurate to assume that depreciation guidelines necessarily reflect parallel devaluations in the physical world. That a taxpayer’s adjusted basis in property is zero hardly means that such property is in fact without market value. To focus solely on depreciation is to ignore the loss involved and the realistic ways of measuring it.
The balancing of these disparate elements of property value against the often uncertainly articulated public values of zoning policy which we required in Livingston is indeed a difficult task. Obviously the approach adopted by the majority to such problems is at once facile and convenient since it eliminates any necessity for involved factual inquiries. Like the older vested rights theory which condemned any legislation requiring the eventual elimination of lawful nonconforming uses, it in effect establishes the useful device of a conclusive presumption. The vested rights theory holds that when a use is in existence prior to a zoning change, the loss to the owner is conclusively presumed to outweigh the benefit to the community.11 The majority opinion, on the other hand, appears to me to propose that when an owner has “fully amortized”12 his initial investment in a structure, the presumption which should be indulged in is that either: (1) immediate removal entails no loss or (2) whatever loss is suffered is outweighed by the benefit to the community.
Unfortunately, these presumptions are not always going to be valid. Nor will the results they produce be accepted with as much equanimity when the “fully amortized” structure to which they are applied is not an intrusive billboard but is an elegant though elderly apartment house.
In sum, I think that the majority have abandoned the principles announced by this Court in Livingston and developed and applied by a number of Courts of Appeal opinions. In their place is a single mechanical rule devised by a federal taxing agency to govern procedures in an un*888related area of governmental activity. In order to arrive at this novel doctrine, the majority have ignored evidence in the record from which the trial court could have found that the signs possessed, at thef minimum, a present value in excess of $10,000, (See, ante, fn. 8.) In light of the public benefit involved, I believe that the trial court could properly have concluded that a loss of this magnitude is too substantial reasonably to be borne in a period of only one year.
I think that the trial court properly applied existing California law and that its determinations of fact are supported by substantial evidence in the record. Finding no error in the record, I would affirm the judgment.
Peters, J., and Tobriner, J., concurred.
“A ‘nonconforming use’ within the meaning of zoning regulations has been defined as ‘the use of a building or land that does not agree with the regulations of the use district in which it is situated.’ ” (58 Am.Jur., Zoning, § 146, p. 1021.) The nonconforming uses which have posed problems for the courts are those which antedate the enactment of the zoning ordinance that prohibits them, i.e., those which complied with all zoning laws when they were constructed.
Grant v. Mayor & City Council of Baltimore (1957) 212 Md. 301 [129 A.2d 363, 365]; City of Los Angeles v. Gage (1954) 127 Cal.App.2d 442, 454 [274 P.2d 34].
Stated in its simplest terms, amortization contemplates the compulsory termination of a nonconforming use at the expiration of a specified period of time, which period is equal to the useful economic life of the nonconformity. (Katarincic, Elimination of Nonconforming Uses, Buildings and Structures by Amortization— Concept v. Law (1963) 2 Dusquene L.Rev. 1.)
Until the present opinion, this appeared to be the rule in California as well. See, e.g., City of Los Altos v. Silvey (1962) 206 Cal.App.2d 606, 609 [24 Cal.Rptr. 200]: “Discontinuance forthwith of a nonconforming use which is not a nuisance and which existed when the ordinance was adopted is a deprivation of property without due process of law.” (See also McCaslin v. City of Monterey Park (1958) 163 Cal.App.2d 339 [329 P.2d 522]; National Advertising Co. v. County of Monterey (1962) 211 Cal.App.2d 375 [27 Cal.Rptr. 136].) The erosion of this doctrine seems to me to be one of the inevitable but undesirable consequences of the majority opinion. If a structure which has been “fully amortized” may be constitutionally required in all instances to be removed in one year, I suppose six months or one month would likewise be permissible. At least the rationale of the opinion suggests no distinction between the periods.
The adoption of this position was foreshadowed by the language in County of San Diego v. McClurken (1951) 37 Cal.2d 683 [234 P.2d 972], which was relied on by the court in Livingston as authority for the quotation in the text, supra. McClurken involved the application of a statute forbidding enlargement of an existing nonconforming use. We there said: “Such a provision [one exempting existing uses but forbidding their enlargement or reconstruction] is ordinarily included in zoning ordinances because of the hardship and doubtful constitutionality of compelling the immediate discontinuance of nonconforming uses. [Citation.] ‘The object of such a provision is the gradual elimination of the nonconforming use by obsolescence or destruction by fire or the elements, and it has been frequently upheld by the courts.’ [Citation.] There is a growing tendency to guard against the indefinite continuance of nonconforming uses by providing for their liquidation within a prescribed period. [Citation.]” (37 Cal.2d at p. 686.)
General accounting usage normally refers to the write-off of tangible assets used in a trade or business as “depreciation” rather than “amortization,” which applies to intangibles. (Michie, Federal Tax Handbook (1968) at p. 383.)
I cannot agree with the casual dismissal of plaintiff’s repairs in connection with its structures, nor do I think it warranted by the cases to which the majority refer. Livingston did not involve and does not mention repairs. And in People v. Ricciardi (1943) 23 Cal.2d 390 [144 P.2d 799], the repairs were to a structure which was a nonconforming use. Here, however, the billboards in issue did not become nonconforming until 1965. It is obvious that most repairs took place before that date and, hence, were to conforming structures.
It also appears that these repairs may have been in part the bases for the “book value” which is accorded no weight by the majority. It is a reasonable inference from the testimony of the plaintiff’s witness that the Internal Revenue Service refused to permit p'aintiff to treat all such repairs as annual expenses and thus deduct them under 26 U.S.C.A. section 162. Instead, some portion was required to be treated as a capital expenditure and this value added to the signs’ “basis.” This would account for a book value even in signs which had been fully depreciated.
In my view there is sufficient evidence in the record from which the trial court could have concluded that the value of the signs (while not identified precisely) was too substantial, in light of the purely esthetic benefit to the public, to permit removal in a period as short as one year. I cannot concur with the statement of the majority that the plaintiff “produced no evidence with respect to present actual value of any of the signs, . . .” (Ante, p. 880.) While plaintiff did not, as would have been preferable, produce expert appraisal testimony as to the present value of the signs, it did introduce substantial data concerning the revenue schedules for the existing contracts on each board and an analysis of the corresponding expenses. An examination of these documents reveals that 39 signs (three are donated by plaintiff to use for public service messages and, hence, create no income) produce approximately $23,700 gross income annually under contracts existing at the date of trial. The approximate net income for these signs is $3,630 annually. Most contracts aré for a term of three years. Even assuming, therefore (and there is no practical reason to so assume) that none would be renewed at the expiration of their terms, the present value of the income stream for the three-year contract period is approximately $10,155, assuming a discount rate of 8 percent per year. And the trial court’s finding is undisputed that, due to extensive repairs, the signs had many years.of useful life remaining.
This side of the equation is capable of much more precise identification than is the “public interest” to be served. It is often difficult to be certain who are the primary and intended beneficiaries of governmental action. Courts can make only very rough approximations of relative priorities to be attached to local problems.
In this we analogize to the valuation procedure followed in the law of eminent domain. There the general rule is that when private property is taken for public use the compensation is measured by the fair market value of the property taken. (Rose v. State of California (1942) 19 Cal.2d 713 [123 P.2d 505].) The compensation for any damage resulting to the landowner is measured by the diminution in value of the property. (Rose, id., at p. 737; People v. Ricciardi, supra, 23 Cal.2d 390, 401.)
Note, supra, 57 Nw.U.L.Rev. 323, at p. 332.
The opinion apparently makes no provision for either nondepreciable property (land; property not used in a trade or business or for the production of income) or for nonconforming uses—which are themselves not capable of amortization or depreciation in the conventional accounting sense of the term as employed by the majority. See, e.g., the treatment of the nonconforming uses in Gage, supra, 127 Cal.App.2d 442, and, for a noticeably inept attempt to apply amortization theory to the concept of a use, see Harbison v. City of Buffalo (1958) 4 N.Y.2d 553, 562 [176 N.Y.S.2d 598, 152 N.E.2d 42, 47].