The Land Use Process - Module 4 of 5

Module 4: The Land Use Process

Overview of the Process

In the first three modules, we discussed the origins of urban planning as part of land use and comprehensive planning and examined the functions that zoning ordinances serve in translating the urban planner’s goals into reality. In this module, we will consider some of the legal issues that planners, municipal governments and prospective developers can encounter during the land development process.

Whether the proposed development is to acquire land to build a 75,000-seat stadium or to renovate an old downtown warehouse into high-rent apartments, every land use idea intersects with the law: local, state and sometimes federal laws can all influence whether a proposed use may go forward.  The question for each proposal is how extensive and complex this intersection with the law will become.

Land use laws and regulations ordinarily establish the procedures through which developers take their proposals from initial consideration through approval or appeal of disapproval. These procedures are not based on uniform laws but share common frameworks, which we will focus on.  

Because urban planning and land use laws are local, the names by which municipal departments, commissions and committees refer to themselves can vary. For simplicity we use generic terms to refer to these organizations.

A developer is an individual or legal entity that must interact with a municipal government to accomplish a land use objective. This includes proposals for new development, redevelopment, subdivision, revitalization, rezoning requests and building permits.

In any municipality, the land use development process is laced with deadlines by which the developer, the municipality and interested members of the public must act or see their interests subject to delay or denial. These deadlines can vary considerably.

Developer Due Diligence

In the legal sense, the land use process begins when the developer presents to the municipal government a proposed land use and pays the associated application fees. In a broader sense, however, the process begins beforehand with due diligence on the developer’s part.[1]  

The complexity and duration of the preliminary review and the entire process depend in large part on how closely the developer adheres to due diligence practices. Research is one such practice. This includes researching:

• the property, its boundaries, ownership and use history, and the same with neighboring properties,
• the local land use laws, the zoning ordinances in particular,
• timing requirements such as submittal deadlines, legal notice periods and meeting dates,
• the local comprehensive plan, if one exists, and
• whether any federal laws or regulations apply to the proposal, such as the Federal Housing Amendments Act of 1988,[2] Americans with Disabilities Act of 1990[3] or the Religious Land Use and Institutionalized Persons Act of 2000.[4]

Today, developers can do much of this research online. Many municipalities devote parts of their websites to offering information for prospective developers, including the text of zoning ordinances, zoning map, comprehensive plan, responses to frequently asked questions and additional resources. Often the developer can begin the proposal application online, although some municipalities encourage or require an informal in-person meeting before proposal submission.

Another important step during the due diligence period may be contacting the planning department. Cultivating a good professional relationship with the planning department staff early in the process can pay dividends during the preliminary review. First, the staff personnel may have several years of experience working with developers and analyzing proposals. Their responses to pre-proposal questions, including the questions they ask the developer, can be indicative of what they will look for during the review. This can help the developer to fine-tune the proposal before submitting it. In addition, while the staff personnel do not make the proposal approval decision, they do present their review findings to the people who will, such as the planning commission or the city council. These decision-makers will frequently give considerable deference to the staff review recommendations.

Preliminary Review

Staff members of the planning department meet with the developer to do a preliminary review of the proposal. The review purpose is to see how well the proposal complies with comprehensive plan guidance, zoning laws and regulations, and if necessary, other factors, such as review of possible environmental effects of the development.[5] Multiple meetings may be needed if the preliminary review reveals areas of nonconformity with the zoning ordinance or the comprehensive plan.

County commissioners and city councils create comprehensive plans to guide a community’s preferred long-term physical, economic and social development.[6] Communities usually establish comprehensive plans in compliance with local or state administrative procedure laws, which provide for public hearings to gather public opinion. These administrative laws also require city staff and planning commission input in creating the plan, which must receive formal commission or council approval. Comprehensive plan use varies in the United States, and not all communities have them. Where they exist, local zoning ordinances will likely closely reflect the comprehensive plan’s purposes.

Comprehensive plans encourage developers to include the plan’s guidance into their early project decision-making. For example, a plan could require a developer to identify significant environmental features on the property and to provide for their preservation. They can provide objective criteria and standards in cases where variances are needed. Thoroughly understanding a comprehensive plan lays a solid foundation for a developer to create a proposal that will pass preliminary review.

Next, the developer needs to consider whether it needs to seek a rezoning or variance. Some municipalities require developers to apply for a compliance certificate before proceeding with the review. The certificate identifies the permissible uses for the property it covers. If it becomes apparent that the proposed use would be inconsistent with the current zoning classification of the land, that is not necessarily fatal to the proposal. It may be possible for the developer to include as part of the land use proposal a proposal to rezone the property to make the new use consistent. Or, in some cases the less sweeping solution of obtaining a variance permit can be attempted.

Some development proposals, such as residential housing construction, require subdivision of larger land parcels into smaller lots. This is often a prerequisite for preliminary review approval. Whether the developer intends to subdivide must be considered at this stage.  

Depending on the municipality and the project size, the developer may need to submit a site plan for review. A site plan provides details about the project’s improvements, which can include current and proposed uses, building footprints and setbacks, engineering and architectural features, landscaping, parking and access to utility, sewer and water services.[7]

Aside from zoning requirements, the developer needs to know if the land in question is subject to any restrictive covenants or easements that could affect the proposed development.  

Restrictive covenants are conditions on land title that, as long as they are legal (for example, a covenant prohibiting sale to persons of a particular race are invalid), limit what uses are available to purchasers of the property or prohibit some uses.[8]  

Easements are legally recognized rights of others to use the property for a particular purpose.[9] Easements have long been used to allow access for public utilities, such as electric, water, natural gas and sewerage lines. Some municipalities use easements as externally applied restrictive covenants, using easements to require open spaces or green areas where no development can take place.

Finally, the review may consider the effects on nearby public facilities such as streets, water, drainage and sewerage, schools, transit, parking availability and electric power supply capacity.[10] If the proposed use will cause demand on the facilities to exceed capacity, a condition of approval might be for the developer to include capacity improvements in its project. 

The Role of Eminent Domain

If the land use proposal is for land already within a municipality’s jurisdiction, then a successful preliminary review will lead to examination of whether the use is permissible by right or whether the developer needs to obtain a permit or variance. If the municipality does not own the land, then the developer and the city must consider whether to annex land for the project through the process of eminent domain.

Historically, governments have used eminent domain to partially or totally acquire private property for public uses, including roads, easements, public utilities and government buildings. In exchange, the government must provide the landowner with what the Fifth Amendment calls "just compensation," which is usually a calculation of market value.  

A variation of eminent domain used in some cases is for the municipality to acquire private land and transfer it to a third party for development when the third party can better put the property to a public use. This variant was originally applied to so-called "blighted" properties that would otherwise negatively affect surrounding properties, but the Supreme Court held in Kelo v. City of New London,[11] that a municipality can also use eminent domain to transfer land from one private owner to another to revitalize commercial property with no “public use” other than financial benefit to the city.

In Kelo, the Court allowed the city of New London to condemn property in the city’s Fort Trumbull neighborhood to allow other private companies to build commercial property, in an effort to re-vitalize that city’s waterfront districts. The Supreme Court deferred to the New London's determination that the property being taken was sufficiently distressed to entitle its acquisition by eminent domain, and that the “public use” requirement of the Fifth Amendment did not actually require that the property so taken be put to a public use. The Court observed that “as with other exercises in urban planning and development, the city is trying to coordinate a variety of commercial, residential, and recreational land uses, and with the hope that they will form a whole greater than the sum of its parts... Because that plan unquestionably serves a public purpose, the takings challenged here satisfy the Fifth Amendment."

The Kelo decision has been subject to criticism for stretching the eminent domain taking authority of government. The federal government responded by issuing an executive order restricting federal eminent domain takings to public uses other than advancing the economic interests of private parties,[12] and many state legislatures and courts have sought to confine the reach of Kelo by holding that their state constitutions still require a public use other than economic benefit.[13] Still, not all states have taken steps to limit the reach of that case. So, in some places and situations, developers might still be able to persuade cities to undertake an economic benefit-based eminent domain taking even in the absence of a public use.

Certification, Public Hearing and Decision

Once the preliminary review is complete and the planning department certifies that the proposal is complete and has addressed all legal requirements, the planning department staff will forward the proposal to the municipal planning commission or its equivalent. To promote comprehensive examination, municipalities often assign representatives from multiple departments to the planning commission, including traffic management, growth management and utility support services.  

As part of its review and in accordance with legal requirements, the planning commission will usually schedule a public hearing on the proposal, after which the commission members will vote upon whether to approve it. The municipality may apply conditions or restrictions to the proposed use in exchange for approval.

If the planning commission approves the proposal, the last step is for the city council to review it. Depending on the municipality, the city council will not review every proposal. For example, proposals that would change the zoning ordinance or map or result in a rezoning or alter the comprehensive plan are more likely to receive city council attention than applications to acquire property or approve conditional use permits. In some cases, the review process might require another public hearing before the council issues its decision. Developers who receive proposal approval can commence with procedures to obtain building and other necessary permits. Rejected proposals might be sent back to the planning commission for further consideration.

Appeals

If the municipality does not approve the land use proposal and does not send it back to the planning commission for further review and modification, the proposal rejection will become final unless the developer initiates an appeal in the proper form and in a timely manner. Similarly, a third party that opposed the proposal during the review and hearing stage might appeal an approval of a proposal.  

Aside from appealing a proposal rejection on factual grounds, other possible bases for appeal include the failure of the municipality to follow its own rules (such as failing to provide for a public hearing), failure to act within its legally-mandated time limits or that the municipality acted in a manner that was arbitrary or capricious.  

Some zoning ordinances include provisions for administrative appeals, but others refer to separate statutes that govern appeals. The relevant law may provide for appeal to the planning commission[14] or to the city council, or to a separate board of appeals[15] to consider claims that the planning commission or the council acted arbitrarily or in bad faith in denying the proposal. The appeal can include a hearing at which the developer can introduce evidence and arguments in its favor, followed by another vote to sustain or reject the appeal.

The entire proposal review and approval process is subject to deadlines that apply to the developer (or third party making an appeal) and the municipality. The statutory deadlines within which the developer must file an administrative or judicial appeal are particularly important to observe because, while missing an administrative deadline during the review process might result in a delay of consideration, failure to begin the appeal in a timely way can preclude the right to appeal entirely.  

The final resort, if the administrative appeal does not provide the desired outcome, could be to formally appeal the decision to a court having jurisdiction over the subject matter of the dispute and the parties.[16] Depending on the controlling statutes, the party seeking judicial relief through appeal might need to show that it has first exhausted its administrative remedies.

In our last module, we’ll turn to the big picture – and discuss the effects of zoning rules, their effectiveness and alternatives that have been experimented with by various municipalities.