Pasquotank Loses Manufactured Housing Case In Appeals Court

The state’s second highest court has rejected an attempt by an eastern North Carolina county to limit the age of manufactured housing units brought into the county.

The N.C. Court of Appeals held earlier this year that the General Assembly had not granted localities the authority to exclude or otherwise zone manufactured or mobile homes based upon value-based criteria.

In 2001, the Pasquotank County Commission considered changes to its zoning regulations on manufactured and mobile homes. Specifically, several commissioners were concerned that older manufactured or mobile housing units were a drain on the county’s resources.

County Attorney Brenda White told the commission that the county had the authority to regulate manufactured and mobile housing under its general police power to protect the health, safety, welfare, and environment within the county. In her opinion, this authority could extend to prohibiting older units from coming into the county.

She noted that the tables from the county tax assessor showed that the values of manufactured and mobile homes decrease substantially over their first 10 years, and that a 10-year-old manufactured home has about the same value for tax purposes as a used car.

The commission voted 4-2 to amend its existing ordinance to include a provision requiring that “[m]anufactured homes must have an attached HUD label and shall not be more than ten (10) years old on the date of application for a building permit for the purpose of permanent set-up.”

Five C’s Inc. buys used manufactured and mobile homes for placement within Pasquotank County. When the ordinance was adopted, it had 10 manufactured homes in inventory that were at least 10 years old. Soon after the ordinance was adopted, its application for a building permit to locate permanently a 23-year-old manufactured home was rejected by the county.

The company challenged the regulation in court, though the case did not come to trial before a judge until 2008. After Superior Court Judge J. Richard Parker ruled in the county’s favor, Five C’s sought review by the Court of Appeals.

A question of authority

Under North Carolina law, counties have only as much authority as is granted to them by the state. In 1973, the General Assembly enacted N.C. Gen. Stat. § 153A-4, which gives counties “adequate authority to exercise the powers, rights, duties, functions, privileges, and immunities conferred upon them by law.” This law also states that that law and local acts “shall be broadly construed and grants of power shall be construed to include any powers that are reasonably expedient to the exercise of the power.”

While this general grant of authority would seem adequate for Pasquotank to regulate manufactured housing as they did, Five C’s argued that a different provision of state law applied. The company’s position was that the General Assembly had later passed a provision specifically limiting counties’ ability to regulate manufactured housing.

“Plaintiff argues the County ‘exceeded its statutory authority by restricting the location of manufactured homes within [the County] based solely on age,’” wrote Judge Robert N. Hunter Jr. for the Court of Appeals.

“We agree.”

The appeals court’s decision was based upon restrictions the General Assembly placed in 1987 upon the abilities of cities and counties to use zoning to limit the placement of manufactured homes. Specifically, N.C. Gen. Stat. § 153A-341.1 states:

(d) A city may adopt and enforce appearance and dimensional criteria for manufactured homes. Such criteria shall be designed to protect property values, to preserve the character and integrity of the community or individual neighborhoods within the community, and to promote the health, safety and welfare of area residents. The criteria shall be adopted by ordinance.

A separate provision applies this provision to counties as well.

The Court of Appeals rejected the argument advanced by the county that increasing the tax base by requiring that manufactured homes have a certain value was a legitimate interest of government.

“The intent of the Ordinance is to increase the tax base by elimination of housing which rapidly depreciates in value,” wrote Hunter.

“This wealth based criterion is neither an appearance nor dimensional criteria. The nexus between the County’s intention and its statutory authority ‘to protect property values, to preserve the character and integrity of the community or individual neighborhoods within the community, and to promote the health, safety and welfare of area residents[]’ is too tenuous.”

“The County cannot accomplish by indirect legislation what it cannot achieve by direct legislation. The County therefore exceeded the power the General Assembly has conferred upon it with regard to zoning regulations for manufactured homes.”

N.C. Court of Appeals rulings are controlling interpretations of state law that are binding upon the state’s trial courts unless they are overruled by the N.C. Supreme Court. Because the ruling by the three-judge panel of the Court of Appeals was unanimous, the high court is not required to hear the case should Pasquotank County seek its review.

Lowrey is an associate editor of Carolina Journal.