A. Def.: system of laws governing the relation between people with respect to resources


Diminution in Value Test Modified



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Diminution in Value Test Modified by Nollan

a. must deny an owner "economically viable use of the land" (pg. 1218)

b. if left w/ econ. viable use, no taking

E. Inverse Condemnation Damages

1. P seeks compensation, not injunction

a. remedy for a taking

2. compensation applies from time regulation is enacted

a. not from time regulation is determined to be a taking

3. allows compensation for temporary taking

a. ex. determined a taking - still get compensation for period from enactment thru repeal

4. First English Evangelical of Glendale v LA County (pg. 1229) established this principle

5. Problem: computing damages & risk to gov't planners of something being declared a taking (no definitive rule)

F. If a taking is found, gov't can:

1. use eminent domain & compensate

a. if this is done, can be challenged on public use grounds (gov't will usually win)

2. revoke statute

3. change statute

G. Remedies for takings

1. have an injunction issued preventing enforcement of the statute (Penn Coal)

2. inverse condemnation damages

3. compensation if eminent domain used

4. eliminating statute
XXIX. Zoning (General)

A. Reasons to use zoning

1. private land use controls & nuisance don't deal w/ externalities efficiently

a. insufficiently precise (don't know what's a nuisance)

b. high litigation costs

c. court can't always achieve just result due to high transaction costs or inaccuracy of dmgs.

2. servitudes have problems

a. high transaction costs

b. holdouts & freerider problems

c. judicial hostility to running burdens

d. high enforcement costs

B. Zoning - method to control & direct use & development of land in a municipality by dividing it into districts

1. zoning ordinance follows 'master plan' for community

2. building codes & subdivision regs. supplement zoning

a. often require things in return for permission to develop (ex. streets, parks, sewage, etc...)

3. Authority comes from state (not fed.)

a. granted either directly (state statute) or through police powers

b. "Zoning Enabling Act" - common state legislation

c. power can be revoked by state

4. Uses (sample)

a. control traffic, sewage use, congestion, tax revenue, control provision of services, aesthetics, etc...

b. preventing wealthier people from subsidizing lower incomes in same neighborhood

5. Problems

a. can lead to segregation by income (ex. kep apts. separate from single family homes)

6. Courts looks case by case

7. TESTS:

a. strike down irrational & arbitrary zoning (Nectow v Cambridge, pg. 1004 note 6)

b. can't be arbitrary or unreasonable (Euclid)


C. Euclidean zoning (Euclid v. Ambler Realty, pg. 993)

1. first case in which Sup. Ct. upheld zoning

2. rigid use restrictions by zone

3. pyramid structure

a. most exclusive uses at top

b. can build uses for zone or anything above in pyramid


[SEE NOTES FOR PYRAMID]

4. argued property devalued because of zoning (attacked legislation, not as a taking)

5. TEST: zoning is valid unless arbitrary & unreasonable

a. very low level of scrutiny

D. Nonconforming Uses

1. Def: a previously legal use that becomes zoned out

2. Rule: usually, nonconforming uses are allowed to continue until they expire

3. Alternative - Amortization clauses in ordinance

a. used to avoid a ruling of a taking

b. allows certain time period for business to recoup losses

4. Zoning cannot be used to restrict specific uses (must be fairly general)

5. PA Northwestern Distrib. v Zoning Bd. (pg. 1011)

a. zoning limiting locations of adult entertainment (couldn't specifically exclude adult book stores)

b. gave 90 day amortization period

c. found a taking based on PA const. & takings clause (pg. 1015)

d. taking was based on amortization period, not zoning

e. in PA, can't eliminate lawful, nonconforming use unless its a nuisance, abandoned or taken by eminent domain

6. Existing Uses vs. Prospective Uses

a. can limit a prospective use without being a taking

b. even if loss is the same, only existing use protected

7. Vested Rights (Note 4, pg. 1019)

a. if a significant amt. of action has been taken, can be protected

b. must be on the level of getting building permits, etc

c. just buying the land isn't enough


XXX. Zoning Flexibility Mechanisms

A. Purpose: deal w/ changes after master plan created; flexibility

B. Variances

1. used to get around zoning restrictions in individual cases

2. Requirements (P bears burden):

a. must prove undue hardship

1. no effective use if variance denied

2. not based on max. profit potential

3. look to origin of situation

4. efforts made to comply w/ zoning

b. must prove that it doesn't impair the public good

3. if 2a met, but not 2b, may require eminent domain to be used

4. if you knew zoning existed & then purchased, no variance

5. Commons v Westwood Zoning Bd. (pg. 1021)

a. wanted to build house but couldn't meet min. land requirements in zoning

b. overturned zoning bd. & granted variance

c. bd. must give specific reasons for denial

6. usually, cts. will accept bd. rationale & not examine too much (ct. did searching analysis in above case)

C. Special Exceptions

1. Def: uses permitted in the zoning plan provided certain conditions are met

a. ex. gas stations may be needed in future but only if x number of houses are built

2. much less discretion in denying permit

a. if conditions met, must issue exception

3. Cope v Town of New Brunswick (pg. 1030)

a. ct. invalidated denial of exception

* b. leg. must give specific guidelines to Bd. of Appeals

1. cannot be discretionary - "adversely effect health, safety & welfare" not specific

2. must be standards

3. prevent corruption & create accountability for Board

D. Rezoning

1. can ask for rezoning (can be challenged)

2. can be viewed as leg. function or as adjudicative function

a. if leg function (ie. broad policy decision), ct. will give little scrutiny

b. if adjudicative/judicial (ie. Bd. deciding specific issue using standards provided), cts. will give higher scrutiny

1. applies even more when very few people affected; fear of singling out & corruption

3. cts. vary in whether rezoning requires close or light scrutiny

* a. many cts. are deferential to rezoning (including floating zones)

4. Floating Zones (Fasano pg. 1036)

a. ct. said it's a leg. decision to have them but a judicial one (by leg.) to choose it (cts. disagree)

b. leg/Bd. must show (in Oregon):

1. public need for change

2. need best served by rezoning this property

b1. gives cts. broad policy role (disagreement over whether this is good or bad)

c. avoid deal-making & corruption

E. Incentive zoning (Type of rezoning)

1. provide favorable zoning/rezoning in return for something to municipality

a. alter zoning in return for something (deal-making)

2. very discretionary

3. many areas use this

a. can be written directly into zoning ord.

4. cts. use rational basis to examine relation between items traded (ex. plaza in return for higher bldg.)

5. Problems:

a. requires zoning ord. to be overregulating in order to later bargain (some say good, some bad)

1. ex. zone for 45 floors, then bargain for 50

2. many say zoning ord. should reflect actual limits

b. asking private entity to create something they don't want to be responsible for

1. incentive to maximize value for community not present

c. incentive to overregulate

d. easy for developers to take advantage of system (harder for private individuals)

1. indiv. not as aware or organized in neighborhoods

6. Advantages

a. cost free method of getting things for municipality

b. benefits community

c. makes wealthy give back to city

7. Spot Zoning - rezoning applying only to indiv. or small # of people

a. worried about corruption & violating master plan

b. can try if variance impossible

c. see Elliott v City of Athens below


XXXI. Permissible & Impermissible Purposes of Zoning

A. Issues to examine:

1. Is objective appropriate for gov't to pursue?

2. Is objective put forward merely as a subterfuge for another objective?

3. Is it appropriate for gov't to limit property rts. through zoning, often without compensation?

4. Does the purpose justify limiting personal rts. through zoning?

5. Are the negative impacts on third parties justified by the purpose of zoning?

B. Original justification for zoning - eliminate nuisance

1. Justifications have tremendously expanded (see below)

C. Aesthetics/Preserving property values

1. aesthetics stems from preserving/enhancing property values

2. Rationale: allowed to preserve values by creating amenities, setting min. standards, decreasing density, etc... & now through aesthetics

a. 'ends' of preserving property values is a legit. purpose and therefore, the 'means' of zoning thru aesthetics is rationally related

* b. aesthetics zoning now valid on its own (doesn't need to be based on values)

3. Problem: should gov't bolster indiv. property values?

a. how is community defined?

4. Stoyanoff (pg. 1065)

a. wanted to build 'unusual' house in traditional neighborhood; needed approval of architectural bd.

b. ct. says preservation of value is legit. end for gov't

1. maintains tax base

2. bulk of personal investment in a home

5. Standard of review: low level of scrutiny

a. "not arbitrary or unreasonable

6. Note: if freedom of expression more directly involved, higher level of scrutiny (see notes, pg. 1076)

a. commercial billbds. can be restricted; noncommercial ones can't (Metromedia)

b. can disperse or concentrate adult entertainment (Young & Renton) but can't be eliminated (Schad)

c. 1st amendment requires higher scrutiny

D. Preserving Community Character

1. can be used as basis of zoning

2. disagreement over level of scrutiny

a. leads to a big difference in outcome (see below)

3. Belle Terre (pg. 1080)

a. zoning restricted more than 2 unrelated people living together (Stony Brook)

b. majority uses rational basis test to promote value of a nice community

c. dissent argued for strict scrutiny (means must be necessary for ends) since privacy & associational rts. at risk

1. argued not necessary since other means available (like limiting # of people/house - applies evenly)

d. same analysis as Nash

4. Problem: can be used over-broadly to promote interests of community

5. can't limit # of family members living together (Moore v E. Cleveland pg. 1087) - disting. Belle Terre

a. requires strict scrutiny when it occurs

6. Belle Terre suggests you can exclude based on status (students)

7. Discrimination & preserving community character

a. Elliott v City of Athens (pg. 1091)

1. ord. limited to 4/house; wanted a group home for recovering alcoholics

2. city wouldn't rezone or spot zone

3. challenged as violation of Fair Housing Act - discrim. against handicapped

a. brought disproportionate impact case (couldn't prove intent)

4. city rationale: exclude college students

* 5. city defends based on exemption from FHA for reasonable maximum occupancy regulations

6. ct. says can set limits on unrelated people but not on related people (see above cases)

* 7. uses balancing test for reasonability

a. city's needs & interests vs. needs of handicapped

b. said they could go elsewhere in city

c. ord. affects other groups so not a disproportionate impact

d. strong city interest in controlling traffic, density & noise

b. challenges under FHA - use balancing test

1. can balance specific application of regulation or statute type in general

c. can also challenge under equal protection clause

d. see Cleburne (footnote, pg. 1102) for an ord. struck down on rational basis grounds

e. Protected groups - use higher level of scrutiny

1. ct. didn't find mentally retarded a protected group

2. many say Cleburne really was higher scrutiny

E. Growth Controls to limit character of community

1. typically upheld

2. limit growth of community

3. use rational relation test (as long as reasonable & not a taking)

4. Golding (pg. 1131) - upheld limiting new construction for 18 yrs.
XXXII.Exclusionary & Inclusionary Zoning - zoning for purpose of excluding groups of people (income or race)

A. Background

1. decentralization of urban areas & rapid growth of suburbs (see Tables)

2. very racially polarized

a. blacks concentrated in cities

b. segregation less in south than north

c. disparities not uniform - Asian

3. poverty higher in cities

4. job markets shifted to suburbs

a. moved low skill jobs further from people who do them

b. transportation not readily available in suburbs

c. leads to greater concentration of poverty

5. Reasons for rapid suburbanization & disparities

a. desire for homeownership & space

1. cheaper in suburbs (land more exp. in city)

b. Fed. incentives for homeownership

1. guaranteeing mortgages (post-War)

2. tax subsidies for homeowners 3. didn't guarantee loans in areas of cities undergoing racial transformation

4. led to decline of values & mortgage capital in cities

c. Fed. public housing program was voluntary by municipality

1. most suburbs didn't participate; cities did

2. led to concentration of subsidies in city

3. created externalities of pushing people out of city

4. cycle - areas of concentration grew faster

5. public housing attracted more poor

d. Fed. subsidies for transportation (ie highways)

1. easier to commute

2. increased benefit of living in suburbs

3. shifted employment base

e. technology changed

1. manufacturing changed from vertical (space intensive) to horizontal

2. facilitated move away from cities

3. simultaneous w/ highway development

f. racism

1. whites wanting to leave minorities moved to suburbs

2. fear of declining property values

6. Results of Suburbanization

* a. Spatial mismatch - disparity between where poor live & where jobs (manufacturing) are

1. hard to get to jobs from inner city

2. hard to get info about jobs

b. barriers erected in suburbs (zoning) to keep poor out

1. concentrated poor even more

c. concentration effects in inner cities(social problems)

1. no role models

2. lower tax base, worse schools

7. See:


a. Discrim in Urban Housing Markets (133-148 supp.)

b. Why Markets Don't Stop Discrim. (149-156 supp.)

B. Zoning Relationship

1. permits limiting access to poor in suburbs

a. created many requirements (ex. min lot size) which increased prices

2. Reasons for Zoning ordinances

a. preserve community character

b. protect environment

c. fiscal - most revenue comes from property tax

1. valuable houses & low demand for services maximizes $

2. poor can't afford large homes (less revenue) & demand more services

d. promote homogenous atmosphere

C. Tiebout Model - Efficiency of exclusionary zoning

1. main theory of urban economics

2. Assumptions:

a. everyone has full info

b. costless mobility

c. unlimited # of local governments

3. Marketplace of municipalities created

a. each has own mix of taxation & services

b. choose one that gives you what you want to pay for (efficient choice)

c. move to where mix is right for you

d. result: homogenous community

e. municipalities restrained in spending based on demands of citizens (will move if overspends)

4. Problem: if poor have free mobility

a. take advantage of other's payments (cross- subsidization)

b. wealthy will move away, poor will follow

1. creates a cycle

c. Solution: exclusionary zoning keeps poor out of jurisdiction

1. leads to efficiency under Tiebout

2. sets min. values in community - ensures payment of min. taxes to support services

3. form of Tiebout head tax

5. many disagree with model

a. equity vs. efficiency

6. Inefficiencies (problems w/ model)

a. leads to higher housing prices

1. this is ok if due to more amenities

2. may be due to monopoly power (restraining supply) which raises price

b. may force long commutes

1. can't locate close to work due to exclusionary zoning

2. inefficient allocation of resources (externalities)

c. commercial & industrial areas forced to locate on periphery

1. zoned out by suburbs

2. forced to choose inefficient sites

3. breaks up agglomeration economies (similar industries locating near each other (ie diamond or garment district))

d. can concentrate inner city population even more (externality)

1. generates more extreme problems in cities requiring more gov't resources (inefficient)

2. encourage middle/upper income & employers to leave city

D. 2 sets of proposals to deal w/ inner city poverty

1. enrichment - jobs to people

a. spend in inner city to relieve problems

b. enterprise zones

c. public housing

d. Schill argues inefficient

1. encouraging businesses to locate in inefficient location

2. no guarantee jobs will go to poor

3. long-term effect unknown

4. only use when market not providing enough or when substandard housing a problem

2. deconcentration - people to jobs

a. move people to suburbs

b. Filtering - one method of deconcentrating

1. as new homes are built, richer people move in

2. these vacancies are then filled by people continuously moving 'up'

3. allows poor to move to older, now vacant housing

4. most common method of distributing housing

c. housing certificates & allowances

d. arguments against deconcentration

1. weaken black political power

2. reduce ethnic culture, structure & institutions

3. ultra-poor will remain (what happens to them?)

4. health care & transportation may be harder in suburbs

3. SEE SCHILL articles (pg. 260-268 supp & 316 supp. & pgs. 566-572)

E. Attacking exclusionary zoning in ct.

1. very hard in fed. ct.

a. use rational basis test

b. must show intent was to discriminate based on race

1. can be hidden w/ economic intent

c. Arlington Hts. demonstrates this

d. can use Fair Housing Act to show disparate impact

2. if fed. ct. blocked, try state ct.

a. many offer much greater protection (ex. Mt. Laurel)

F. State Solutions (see below)

G. NJ - Mt. Laurel cases

- most dramatic break from presumptive validity of zoning

1. Mt. Laurel I (pg. 1105)

a. determined zoning had to reflect regional needs, not municipal needs

1. general welfare is regional

b. based on Enabling Act & NJ Const. (would lose under fed. const.)

c. municipality must bear "fair share" of regional need of low & moderate cost housing

d. limited to developing municipalities

e. deals purely w/ zoning; must remove barriers

f. create reasonable opportunity for housing to be built; didn't mandate such housing

g. adopted decentralization theory & spatial mismatch

1. no other case has done so

h. fiscal zoning can't be main purpose of zoning

i. ordered ord. rewritten & rely on future litigation

1. assumed towns would act in good faith

2. Mt. Laurel II (pg. 353 supp)

a. towns didn't comply, Sup. Ct. angry

b. fair share extended to all growth areas as defined in State Plan

c. 3 judge ct. for all Mt. Laurel actions

d. created affirmative obligation

1. must take steps to get housing built

2. facilitate subsidy use by builders

3. must now use inclusionary zoning

a. create incentives to build

b. density bonuses (build some low & get bonus market units)

c. mandatory set asides - when building market rate housing, must set aside certain # of units for low cost housing

e. builders remedy

1. if bldr. can prove town hasn't met obligations & propses a project w/ >20% low and moderate housing, town must allow it (ct. order authorizing entire project)

2. towns in effect lose control of zoning

f. once fair share met, can exclude or zone for fiscal purposes

3. Mt. Laurel III & Fair Housing Act of 1985 (NJ) (361 supp)

a. leg. responded by passing Act

1. upheld in ct.

b. ended builder's remedy

c. Council on Affordable Housing (COAH) determines fair share allocation

d. all ct. cases goto COAH

e. towns can submit plan to meet allocation to COAH

1. if given substantive certification, plan is presumptively valid for 6 yrs.

2. helps avoid lawsuits

f. regional contribution agreements

1. can transfer up to 50% of obligation to another juris. in region for $

2. must be consensual & must be reviewed

3. some argue this defeats purpose

4. Results: (see articles - pgs. 378-387 supp)

1. only 1/10 of needs met

2. only 1/5 certified by COAH

3. issue: was Mt. Laurel used by children of mid-class people in towns or by target pop.

4. little evidence if minorities have been helped or still the same racial composition

5. Issue: Should NJ Sup. Ct. get reinvolved? or Should ct have never gotten involved?

H. Alternatives to NJ approach

1. can use US Fair Housing Act

a. ex. Huntington (pg. 388 supp)

b. argued racially discrim. impact & zoning was struck down

c. case by case method

** 2. Sup. Ct. has never ruled if disparate impact can be challenged under FHA (most Circuits allow it)

3. NY approach - Berenson & Suffolk

a. litigation method

b. look beyond borders to regional communities

c. challenge case-by-case; no systematic process

4. CT approach - N. Branford Planning (pg. 395 supp)

a. variance on litigation model

b. leg. stepped in & created system for challenging

c. burden of proof in zoning challenges shifted to D if based on low income housing

1. town must justify denial

2. must be necessary reason, not rational reason

d. if town has 10% low income housing, not subjected to shifted burden of proof

5. Mass. approach

a. anti-snob model

b. non-profit or gov't developers can get a comprehensive building permit from municipality

1. don't need indiv. project permits

c. if denied, appeal to State Housing Appeals Comm.

1. examine de novo to see if reasonable & consistent w/ regional needs

2. no deference to zoning bd. decision

d. if Comm. decides against town, goes to appellate ct. which must give deferential treatment if reasonable

e. 10% CT. limit also applies

I. Overall response to FHA

1. supply oriented subsidies from gov't have declined

2. reliance on for profit developers

a. leverage off of market rate housing

3. market glut has led to developers w/ no incentive to build at all

a. change from when leg. passed
XXXIII.Is Zoning Necessary? (Summary - pgs. 1132-1140)

A. Purpose: prevent private individuals & corporations from developing solely w/ self-interest maximizing as the goal

1. forces externalities to be dealt with

B. Criticism of zoning

1. abuses - special influences

2. often goes too far

3. can hurt more than help

a. ex. min. lot size leads to sprawl & inefficiency

4. high admin. costs

5. unfair redistribution of wealth

6. promotes segregation

7. lack of flexibility

8. freezes current uses

C. Alternatives

1. rely more on nuisance or covenants

2. nuisance boards

3. Houston until recently didn't zone

a. no specific constraints

b. see pg. 1137 for results

D. Reasons zoning is unnecessary

1. econ. forces tend to spearate uses even without zoning

2. when econ. forces don't, property owners will enter into agreements to provide such protection

3. covenants can be just as effective

4. when covenants expire, land will be used as needed at time (flexible & efficient)

5. allows supply & demand to function more freely

6. remove political influence

XXXIV.Alternatives to Regulation

A. ex. could private sector have preserved Grand Central without gov't intervention? (Penn Central)

1. could take contributions & buy negative easement (not efficient)

2. could use eminent domain to condemn (buy) negative easement (problem: city bankrupt)

3. used regulation to control
XXXV.Various Tests - level of scrutiny (summary)

A. Rational Basis

1. Def: rationally related to some legitimate, articulated gov't purpose

a. not a difficult test to meet

2. Uses:

a. due process clause for most laws including economic affairs

b. eminent domain

B. Strict Scrutiny

1. Def: necessary to promote a compelling government interest

a. much harder test

2. Uses:

a. due process for "fundamental rights" including voting, traveling, some aspects of privacy; "liberty"

C. choice of test can predetermine outcome

D. cts. can disagree over proper test to use

1. see Nash (majority & dissent disagreed)

a. argue property rts. protect liberty (much disagreement)

E. cts. give less scrutiny to leg. actions that are legislative functions (deciding overall city policy) than to adjudicative functions (like determining specific issues)

G. Challenges to gov't action (always identify doctrine being used to help w/ analysis)

1. if challenging a gov't statute, its based on substantive due process (ie. Nash)

a. Test: rational basis or strict scrutiny (depending on rt. affected)

1. means & ends test

2. if challenging something as a taking (gov't denies), based on just compensation clause

a. Test: see takings tests (ie. perm. phys. invasion, etc.)

b. one of tests is similar to subst. due process test

3. if challenging eminent domain (gov't admits), based on just compensation clause

a. Test: public use requirement - based on rationally related to a conceivable gov't purpose

1. very similar to subst. due process test

Misc.: can make new rules prospective or retrospective or phased in

Questions:

pg. 893 - touch & concern eliminated????

pg. 860 - estate of same duration to run????

pg 894 - unreasonable restraints on alienation thru servitudes invalid????



Does a nuisance have to be permanant?

How does Nollan affect dim. in value test (pg. 1218 states dim. in value must deprive of all econ. viable use)? Does it supplement or change test?
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