How much notice do local governments have to provide nearby property owners about plans for new subdivisions? And does it matter if those property owners successfully had blocked an earlier rezoning proposal for the tract of land in question? The state’s second-highest court concluded that government officials may not have to provide nearby residents with any notice at all.

Independence Capital Realty, LLC owns an undeveloped 16-acre tract of land in east Charlotte next to the existing Coventry Woods and Cedars East subdivisions. The parcel was zoned as R-4 for single-family houses.

In July 2003, the company tried to have the tract rezoned to a higher density. The Coventry Woods Neighborhood Association opposed the rezoning. In August 2004, the Charlotte City Council rejected Independence Capital’s rezoning request.

That did not end the matter, however. On Feb. 14, 2005, Capital Reality sought preliminary approval from the Charlotte-Mecklenburg Planning Commission for a subdivision plan for the land. The proposal for a development to be called “Independence Woods” included a request for a “density bonus” allowing 72 single-family homes to be built, instead of the 58 houses typically allowed under R-4 zoning. Coventry Woods and Cedars East residents were not informed that a subdivision proposal had been filed.

On Dec. 13, 2006, the planning commission’s staff gave preliminary approval to the subdivision plan. The city’s subdivision ordinance requires only that the developer be notified of the staff’s decision. A notice about the preliminary approval was posted on the planning commission’s Web site on Jan. 5, 2007.

The CWNA first became aware of Independence Capital’s plans for Independence Woods in July 2007, well after the 10-day window to challenge the planning commission’s staff decision had passed. Its attempts to challenge the subdivision plan were rejected as untimely. Charlotte’s Zoning Board of Adjustment also held that no hearing was required before the preliminary approval was issued.

In March 2008, the CWNA and a number of Coventry Woods and Cedars East residents sued the city of Charlotte, the planning commission, and Independence Capital to overturn the preliminary approval of the subdivision plan for Independence Woods with its denser, infill development.

After a Superior Court judge ruled against them, the homeowners and the neighborhood association brought the matter before the Court of Appeals.

On appeal, CWNA argued the process for staff approval of the subdivision plan was simply unfair, as it “wholly fails to afford aggrieved persons any notice of staff decisions, whereby such person could avail him or herself of such [appeal] rights.”

This denial of notice, they contended, amounts to “a “fundamental denial of due process,” which is prohibited by both the 14th Amendment of the U.S. Constitution and Article I, Section 19 of the North Carolina Constitution.
For such a claim to succeed, the appeals court noted that a constitutionally protected property interest must exist. The N.C. Supreme Court, in a 1988 decision Armstrong v. Armstrong, explained that “[t]here is no such thing as a vested right in the continuation of an existing law.”

Thus if the claim by Coventry Woods and Cedars East residents simply is based upon the expectation that the status quo would continue, then they do not have a property interest sufficient to support a due process claim.

This is exactly what the Court of Appeals decided. It found that the plaintiffs were “essentially relying on a belief that they are entitled to freedom from the inconvenience that they believe would result in the event that Independence Capital was allowed to develop Independence Woods consistently with the approved preliminary plan.”

Because the decision by the three-judge appeals panel was unanimous, the N.C. Supreme Court is not required to take the case if CWNA and the residents choose to appeal.

The case is Coventry Woods v. City of Charlotte (09-611).

Michael Lowrey is an associate editor of Carolina Journal.