News: CJ Exclusives

NC Court Upholds Limits On Zoning

Locality must specify justifications for exclusion ahead of time

In a potentially significant decision, the North Carolina Court of Appeals has held that the addition of the phrase “without limitation” to a list of specific reasons why a town can reject a land-use decision does not grant the locality new authority. The town may reject only an application for a reason that is specifically listed in its zoning ordinances, not any reason the locality might choose.

The case involves a Knightdale couple, Milton and Marva Knight, who wanted to put a modular house on a piece of property zoned “residential/agricultural.” A modular home is a factory-built house built to local building codes. By contrast, a manufactured home is a factory-built house constructed to a national manufacturing standard.

Knightsdale’s Unified Development Ordinance requires a zoning compliance permit with town council site plan approval for new modular homes in RA districts. The town’s planning and appearance board recommended that the council approve the plan, subject to certain improvements that the Knights had agreed to make.

After hearing public comment, however, the town council rejected the proposal. The council’s decision was based upon concerns about the impact a modular home would have upon the value of neighboring properties. It came despite there being no specific language in the ordinance allowing the council to consider such effects in making its decision.

The Knights appealed, first unsuccessfully to Superior Court, and then to the Court of Appeals. They contended that the town lacks the authority under its ordinance to reject a site plan for diminishing the value of nearby properties. In contrast, the town argued that a “without limitation” phrase in the ordinance gave the town discretion to reject site plans for reasons not specifically listed in the ordinance.

The specific wording of the ordinance includes:

(Section) 4.3.5.4.3
“The Town Council shall approve, approve with conditions, or deny, or take any other action consistent with its usual rules of procedure on the site plan. Actions shall be based on conformity with this chapter, the Comprehensive Plan, and other adopted plans and standards; however, no site plan shall be approved unless the Town Council first finds that the plan meets all the following:

(…)
(Section) 4.3.5.4.3.2
The plan contains adequate measures to protect other properties, including public corridors, from adverse effects expected from the development, including without limitation, stormwater, noise, odor, on and off-street parking, dust, light, smoke and vibration.

The Court of Appeals rejected the town’s argument. It noted that the N.C. Supreme Court has held that zoning restrictions derogate common-law property rights and that “limitations and restrictions not clearly within the scope of the language employed in such ordinances should be excluded from the operation thereof.”

“Here, the adverse effects listed in Section 4.3.5.4.3.2 of the Town’s UDO (“stormwater, noise, odor, on and off-street parking, dust, light, smoke and vibration”) are all physical in nature,” wrote judge Robin Hudson for the court. “Nonetheless, respondents argue that the phrase ‘without limitation’ preceding the enumerated effects allows the Town to consider any negative impact a plan would have on surrounding properties. We disagree.”

“Given the Supreme Court’s limitation of zoning restrictions … we conclude that diminution in neighboring property values is excluded from the scope and intent of Section 4.3.5.4.3.2 of the Town’s UDO. According to the UDO as written, therefore, Town could have considered any of the specific physical effects listed in the UDO, but had no authority to consider the site plan’s potential effect on surrounding property values. ”

The appeals court concluded the town erred in rejecting the application for site-plan approval. It returned the case to Superior Court for entry of an order requiring the town to issue the zoning compliance permit for the Knight’s home.

The case is Knight v. Town of Knightdale, (03-355).

Link to ruling here.