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Foley v. Orange County, 2016 WL 361399 (11th Cir.) involved a zoning enforcement action taken against Plaintiffs by Defendant County for having unpermitted accessory buildings that housed a toucan-raising operation, which was upheld through the local administrative process and state courts. Plaintiffs then filed a federal action making various state and federal law claims against county employees in their individual and official capacities, challenging the denials and the county authority to regulate and asserting various civil rights claims. Both parties moved for summary judgment and the court granted partial summary judgment on one state claim to plaintiffs, while granting summary judgment to the county on the remaining claims and finding immunity for county employees. Plaintiff appealed summary judgment on their substantive due process, equal protection, compelled and commercial speech and illegal search and seizure claims. The court reviewed the summary judgment decisions de novo. The court said it would dismiss a claim, inter alia, if it were wholly insubstantial or frivolous, i.e., if had no plausible foundation or a prior Supreme Court decision clearly forecloses the claim.

Marijuana facilityOn May 3, 2016, the City of Hillsboro adopted new land use regulations in preparation for recreational marijuana uses of the product.  The city’s new code allows marijuana production facilities only in the General Industrial (I-G) and Industrial Park (I-P) zones.  However, such production facilities are not allowed in the city’s recently adopted Industrial Sanctuary (I-S) or the light rail industrial zones.  As a practical matter, this limitation in the I-S zone may turn out to be smart planning as the city has envisioned high energy users at these locations, and marijuana production could have had adverse impacts to energy infrastructure and availability in the area.

Justice Antonin Scalia passed away last week after almost 30 years as a justice of the U.S. Supreme Court. Although his impact was felt throughout the country, it is worth pausing to look at how he affected the land use system more broadly and, in particular, Oregon’s system.

Shook v. Pitkin County Board of County Commissioners, 2015 WL 3776876 (Colo. App., June 18, 2015), involved a complaint of a potential land use code violation on Plaintiff’s property. Following an investigation, a notice of violation was directed at Plaintiff, who obtained a permit. No further action was taken on the violation; however, Plaintiff sought all public records concerning the complaint. Defendant supplied some of the requested records, but did not include the name and address of the complainant and certain handwritten notes of the inspector who processed the complaint. Plaintiff filed a declaratory judgment action to obtain that information under the Colorado Open Records Act (CORA), but the trial court upheld the denial of disclosure under an exception in that Act. Plaintiff appealed, seeking the disclosure and statutory attorney fees and costs. 

iStock_000040764222_LargeThe Department of Housing and Urban Development (HUD) wasted no time in finalizing the new affirmatively furthering fair housing rules the day after the U.S. Supreme Court upheld disparate impact claims under the Fair Housing Act in Texas Department of Housing Affairs v. Inclusive Communities Project, Inc. (see last week’s post for a summary of that case). Disparate impact results from governmental policies that may not have been intended to create segregation, but do in fact result in segregation. The Supreme Court’s ruling upholds the Fair Housing Act’s prohibition on discrimination caused by policies or practices that have an unjustified disparate impact because of race, color, religion, sex, familial status, national origin, or disability.

The new rule requires certain public entities (“entitlement jurisdictions” that receive federal funding for housing) that have, under previous HUD rules, been required to prepare an Analysis of Impediments to Fair Housing (AI) to prepare an Assessment of Fair Housing Report (AFH). The AFH meets standardized reporting requirements, and is drafted to assist program participants in reducing disparities in housing choice, and to provide access to housing opportunities, particularly for those with protected status.  The overall goal of the new reporting requirement is to expand economic opportunity and enhance quality of life.

These rules are a game changer for land use planning. HUD is proactively getting involved in the business of zoning for fair housing, not just financing units. HUD recognizes that fair housing issues may arise from factors such as zoning and land use, including the proposed location, design, and construction of housing; public services that may be offered in connection with housing (e.g., water, sanitation); and related issues. According to HUD, the AFH approach focuses primarily on assisting program participants in being better informed, and better able to set goals and priorities.  In particular HUD wants to ensure that the following conditions will be taken into consideration when making funding decisions in a particular jurisdiction - patterns of integration and segregation; racially or ethnically concentrated areas of poverty; disproportionate housing needs; and housing-related barriers in access to education, employment, and transportation, among others.

While local jurisdictions will remain in local control of land use decisions and adoption of zoning regulations under the new rules, entitlement jurisdictions are called on to provide a specific analysis of land use programs that may inhibit affirmatively further fair housing. In addition to HUD’s final rule, HUD’s Assessment Tool, adopted in 2014, and guidance to be issued in the near future, will assist recipients of federal funding to use that funding and, if necessary, adjust their land use and zoning laws in accordance with their existing legal obligation to affirmatively further fair housing.

Zoning and land use laws that are barriers to fair housing choice and access to opportunity can be quite varied and the determination of whether a barrier exists often depends on the factual circumstances in specific cases.  One example is zoning and land use laws that were intended to limit affordable housing in certain areas in order to restrict access by low-income minorities or persons with disabilities. The City of Black Jack took egregious zoning actions in the 1970s that prevented construction of low-income multifamily housing that had a racially discriminating effect and was found to violate the Fair Housing Act.  U.S. v. City of Black Jack, 508 F.2d 1179 (1974).  An example of a positive zoning action that would further fair housing would be the removal of such an ordinance. HUD intends to include additional examples in its guidance for its affirmatively furthering fair housing regulations.

Closer to home, Oregon’s 2015 legislature had a clear path to a remove a barrier to affirmatively furthering fair housing, but the Oregon Senate would not even take a public vote on House Bill 2564 to remove the constitutional ban on mandatory inclusionary zoning. Instead, the bill died in committee after having passed the House. Inclusionary zoning is a tool that requires new developments of housing to construct a particular percentage of new units for qualifying low-income home seekers. While the Oregon Senate failed to move forward, the State’s Draft Fair Housing Report 2016-2020 contains a finding that the state’s ban on inclusionary zoning “limits housing choice for persons of color and low income persons.” The AI included in the report states:

Disallowing inclusionary zoning as part of a community’s affordable housing toolkit limits the provision of affordable housing in general. In addition, limits on the use of inclusionary zoning may disproportionately affect members of protected classes to the extent that they have a greater need for affordable housing. This situation is called discriminatory effect or disparate impact.

With the fuel from the Supreme Court’s decision, as well as the new HUD regulations, Oregon’s leaders would be wise to avoid potential challenges and pick off low-hanging fruit like overturning the ban on inclusionary zoning.  Such action is an easy first step to remove barriers for protected classes and avoid disparate impact challenges.

TownhousesOn April 14, the Oregon House voted to approve House Bill 2564, which would remove the preemption on local government adoption of inclusionary zoning as a tool to advance affordable housing.  Oregon and Texas are the only states that currently maintain such a prohibition and most other states allow this issue to be resolved at the local level.  If the ban were lifted, local governments could require that some percentage of units in a development be sold as affordable units to low income buyers as part of any new housing development.  No more than 30 percent of the housing units created by a new project could be offered at below-market rates, and local government must provide builders with one or more additional incentives such as additional density, waiver of permit fees or expedited permit review to do so.

There are some who argue that repealing of the ban on inclusionary zoning is somehow incompatible with our State planning system.  Nothing could be further from the truth.  Goal 10 (Housing) requires that:

Buildable lands for residential use shall be inventoried and plans shall encourage the availability of adequate numbers of needed housing units at price ranges and rent levels which are commensurate with the financial capabilities of Oregon households and allow for flexibility of housing location, type and density.

To assure that this objective is realized, the legislature has imposed an obligation on most local governments to plan and provide for “needed housing,” namely housing types:

* * * determined to meet the need shown for housing within an urban growth boundary at particular price ranges and rent levels…

Needed housing includes attached and detached single-family housing and multiple family housing for both owner and renter occupancy; government assisted housing; mobile home or manufactured dwelling parks; manufactured homes on individual lots planned and zoned for single-family residential use that are in addition to lots within designated manufactured dwelling subdivisions; and housing for farmworkers.

iStock Country RoadThe law recognizes that under certain circumstances, continued unauthorized crossing of another’s land for a long time can lead to the right to do so indefinitely, notwithstanding that there is no agreement from the landowner.  The right so gained is called a prescriptive easement.  When the law allows one landowner to lose property rights in favor of another, without compensation, disputes often occur.  No surprise.  If it were my land, I’d be upset, too.

The Oregon Court of Appeals, in Wels v. Hippe, 269 Or App 785, 787 (2015), recently dealt with such a dispute, and provided the litigants and practitioners of the law with an in-depth analysis of one element of a prescriptive easement case – “adversity”.

In order to obtain a prescriptive easement to cross over or use the property of another under Oregon (as well as Washington) law, a plaintiff claiming a prescriptive easement is required to show, “by clear and convincing evidence, that his use (or use by former owners of his property) of the road on defendants’ property was ‘open and notorious,’ ‘adverse to the rights of defendants,’ and ‘continuous and uninterrupted’ for 10 years.”  Id, at 787.

House on euros in forestK.L.W. Construction Co., Inc. v. Town of Pelham, 2014 WL 6967664 (N.H.) involved petitions for declaratory judgment by a construction company and a developer for a refund of what in Oregon are termed “systems development charges” authorized by a New Hampshire statute. Under the statutory scheme, local governments may assess fees for capital improvements; however, if the fees are not spent within six years, they must be refunded. Defendant’s ordinance authorized a refund, but only to the “current owner” of the land assessed. Plaintiff Construction Company paid the fee, which refund was also sought by the original developer. The land in question was sold to homeowners after development and the Town contended that only these successors could claim the refund.

The assessments were levied to build a new Town fire station; however, after some of the funds had been spent for feasibility studies and architectural plans, the voters of the Town declined to authorize construction. The trial court upheld the Town’s restriction of refunds to current owners and granted its motion to dismiss Plaintiffs’ claims, determining that the statutory direction for a refund of unused fees did not require that such refund be paid to the original payee.

On appeal, the court found no factual disputer and reviewed the trial court’s order of dismissal on a de novo basis, as Plaintiffs’ standing was jurisdictional and a question of law over statutory interpretation of “refund,” a term not otherwise defined by the enabling legislation. Plaintiffs contended that local governments must follow the statutory mandate and that “refund” must be given its ordinary meaning of “pay back” or “reimburse.” Plaintiffs also contended that another statute relating to exactions was more specific, providing refunds in those cases to the payer or the payer’s successor in interest. However, the SDC statute did not contain such language and the court declined to insert the same, finding the two statutes enacted at different times and dealing with different situations.

Moreover, the court cited decisions from other courts that allowed refunds to go to other than the original payers and rejected the possibility that local governments could enter into an agreement a payer to have payments specifically refunded to that payer as requiring this arrangement to be made. Moreover, the court declined to use legislative history to interpret the refund statute, finding no necessary ambiguity that would allow for such an examination. Finally, the court rejected Plaintiffs’ takings challenges, finding no adequate preservation of constitutional issues.  The court thus affirmed the trial court’s conclusion that the local ordinance authorizing SDC refunds to current landowners to be within the statutory authorization.

This is a case of statutory interpretation. Although Oregon law does not speak to the refund issue, common practice is that unspent systems development charges must be refunded. Refunding those charges to current landowners provides for better predictability in the use of those funds and for allocation of the risk of that possibility as part of the sales price for land.

K.L.W. Construction Co., Inc. v. Town of Pelham, 2014 WL 6967664 (N.H.)

farm Feield cultivatedEd Sullivan and I co-author the annual comprehensive plan update for the American Bar Association’s State and Local Government Law Section. The most recent update was just published by the Urban Lawyer and you can read about it here. The article undertakes an annual survey of state and federal cases dealing with the role of the comprehensive plan (sometimes called the “General” or “Master” plan) in land use regulation. That survey and this resulting article illustrate trends in the current use of three modes of perception regarding comprehensive plans by state legislatures and state courts. The first mode, the “unitary view,” is that planning is neither essential nor possibly even relevant to zoning and land use regulation, and it is the local zoning ordinance that is dispositive. The second view, the “planning factor view,” is that a plan is relevant, but not necessarily dispositive of the validity of a land use regulation. The final view, the “planning mandate” view, is that planning is essential to land use regulation. Please review the article for specific examples and commentary on each of these views.

The trend in case law in this update demonstrates increased respect for comprehensive planning, less tolerance for the view that zoning regulations are isolated from their planning roots, and more emphasis on the role of planning when plans are amended or interpreted. We hope you enjoy the article and that the update assists you in your land use battles.

One of the Selective focus on the word "fair". Many more word photos in my portfolio...most common concerns about land use hearings is whether a decision maker is “biased,” or whether they can make a fair decision.  In Columbia Riverkeeper v. Clatsop County, ___ Or App ___, ___ P3d ___ (2014), the Oregon Court of Appeals expressed their view of bias and it likely does not match what most people think of “bias.”

Oregon was one of the leaders in requiring more process and elements of fairness in land use decision-making.  As far back as Fasano v. Washington Co. Comm., 264 Or 574, 588, 507 P2d 23 (1973), the Oregon Supreme Court noted that participants to a quasi-judicial proceeding are entitled to a "tribunal which is impartial in the matter."  However, the courts have also long recognized that the role county commissioners play in land use is not the same as a judge:

"A judge is expected to be detached, independent and nonpolitical. A county commissioner, on the other hand, is expected to be intensely involved in the affairs of the community. He is elected because of his political predisposition, not despite it, and he is expected to act with awareness of the needs of all elements of the county, including all government agencies charged with doing the business of the people."  Eastgate Theatre v. Bd of County Comm'rs, 37 Or App 4 745, 588 P2d 640 (1978)."

In the case decided last week, LUBA had remanded a decision because of what it saw as bias on the part of one of the county commissioners, Peter Huhtala in reviewing an application to site a liquid natural gas (“LNG”) facility.  The commissioner had run for office largely on his opposition to LNG facilities, and the record was replete with his opposition to the concept and to some particular applications.  LUBA looked at that record and found Huhtala disqualified because of his bias.

The Court of Appeals focused on the “matter” before the county commission and the Commission’s role in applying the applicable land-use laws to a discrete set of facts and evidence.  The Court of Appeals was not troubled about the commissioner’s opposition to other aspects of LNG facilities, noting that these were “political predispositions.”  The only actions Huhtala had taken with reference to the pending application did not demonstrate any bias and, therefore, the Court of Appeals found Commissioner Huhtala to not be disqualified on the basis of bias.

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We regularly update clients about changes in real estate law and on industry trends. This includes briefing clients on legislative proposals in the federal tax, housing and other legal areas affecting their businesses. Staying current enables you to anticipate and prevent legal problems as well as capitalize on new developments.
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