Frank Graham inherited a 600-acre wooded tract located about a half mile outside a small town in rural North Carolina. With the economy turning around he is considering moving forward with development of the tract. He has been thinking a residential subdivision and small shopping center would fit nicely on this tract. He thinks a portion of the land might also be great for some industrial development or maybe even a mobile home park. Frank remembered seeing something in the papers about the county adopting zoning a few years ago. So before setting off on this project, he thinks it would be prudent to run his ideas by his cousin Eddie Graham, who is the long-term county manager for the county where this property is located.

Frank drops by Eddie’s office. After catching up about their mutual relatives, Frank briefly sketches out his thoughts about development of his tract. “Well,” Eddie says, “sounds like you have some good ideas. A good starting point even if a bit controversial. But I’m afraid I can’t be of much help. You need to go see the folks at town hall. City zoning applies out there.”

Frank is confused. “Eddie, I don’t follow all this government stuff the way you do, but I’m pretty sure this land is still out in the county. The town may be growing out that way, but I think I’d remember if it had been annexed. I’m pretty sure I don’t pay city taxes on that land. Are you sure about city zoning?”

“It’s outside the city,” Eddie explains, “but it has been subject to city zoning a long time. They got ETJ at least a decade ago.”

“And what, pray tell, is ETJ?” Frank asks.

“ETJ” is shorthand for extraterritorial jurisdiction. In this context, it is the authority of a city to apply its planning and development regulations to adjacent areas outside the city limits. Folks like Frank often want to know if this is legal and, if so, how it came to be.

Initial Grant of ETJ Authority

For many years states have authorized municipal regulation of extraterritorial areas to protect public health and safety. For example in the early 1800’s Georgia allowed Savannah to prohibit rice farms within a mile of the city and Maryland allowed Baltimore to apply health regulations to ships within three miles of the city. The North Carolina supreme court in 1912 upheld a law giving Greensboro authority to impose sanitary regulations in the area one mile beyond the city limits. State v. Rice, 158 N.C. 635, 74 S.E. 582 (1912). The legislature in 1917 gave all cities the authority to adopt similar health and safety regulations for areas within a mile of the city limits, an authority that is found today in G.S. 160A-193.

So how did the municipal authority in North Carolina to regulate nuisances in adjacent areas get extended to allow city planning, zoning, subdivision, and other development regulations in extraterritorial areas?

As zoning and other land use regulations first came into widespread use in North Carolina, planning and development regulation were almost exclusively municipal concerns. Most cities of any size had adopted zoning by the late 1940s. By contrast, while a handful of urban counties had gotten approval to adopt zoning, most counties in the state had no authority to adopt zoning ordinances until 1959. As the post–World War II development boom took off, a good deal of the development occurred along the urban fringe, often in unregulated areas just outside of city corporate limits. The Institute of Government’s land use law expert, Phil Green, observed in 1953 that most of this fringe area development was taking place in “relatively chaotic fashion.”

To deal with this issue of unregulated development on the urban fringe, several cities sought authority to adopt “perimeter zoning.” Raleigh, Chapel Hill, Gastonia, and Tarboro were granted a one-mile ETJ for planning regulations in 1949. By 1958, nineteen municipalities had secured similar local legislation as extraterritorial zoning authority had been granted to Carrboro, Chapel Hill, Charlotte, Elizabeth City, Farmville, Gastonia, Goldsboro, Greensboro, High Point, Jacksonville, Kinston, Mooresville, Raleigh, Salisbury, Snow Hill, Spencer, Statesville, Tarboro, and Winston-Salem. At this point the legislature decided to look into whether this authority should be extended to all cities.

The Municipal Government Study Commission examined the issue in 1958 and came to this conclusion:

The Commission recognizes that municipalities have a special interest in the areas immediately adjacent to their limits. These areas, in the normal course of events, will at some time be annexed to the city, bringing with them any problems growing out of chaotic and disorganized development. Even prior to that time they affect the city. Health and safety problems arising outside the city do not always respect city limits as they spread . . . . Subdividers of land outside the city commonly wish to tie to city water and sewerage systems. New industrial and commercial development may, for a variety of reasons, take place just outside the corporate limits.

The study commission recommended that all cities with populations of at least 2,500 be granted a one-mile area of extraterritorial jurisdiction and that cities with larger populations be granted up to five miles of extraterritorial jurisdiction, provided the county agreed.

The legislature adopted the bulk of the study commission’s recommendations and granted statewide authority for municipal extraterritorial land use regulation in 1959. The current statutory scheme of tiered extraterritorial jurisdiction of one to three miles based on city population was adopted in 1971.

Use of ETJ

A 2005 survey by the School of Government indicated that 62% of the responding North Carolina cities had adopted extraterritorial zoning. Cities with larger populations were far more likely to have done so than their less populous counterparts. The overwhelming majority (85%) of cities with ETJ only exercised this jurisdiction within one mile of the city limits.

By 2012, the number of municipalities reporting use of extraterritorial zoning had slightly increased to 65 percent. A 2012 School of Government report estimated that about 500,000 people resided in municipal extraterritorial areas.

A 2018 survey by the School of Government indicated these rates have held steady as 66 percent of responding cities reported they exercised ETJ. As with prior surveys, the adoption rate for ETJ substantially increased once the population of the municipality passes 1000. Only 34 percent of cities with populations under 1000 reported ETJ adoption, compared with 79 percent of those with populations between 1000 and 10,000, 77 percent of those with populations from 10,000 to 25,000, and 84 percent of those with populations over 25,000.

Allocation of City and County Authority in the ETJ

When a city adopts an extraterritorial boundary ordinance, the city acquires jurisdiction for all of its development regulations. This includes not only zoning and subdivision ordinances but also housing codes, building code enforcement, and regulations on historic districts and historic landmarks, open spaces, community development, erosion and sedimentation control, floodways, and mountain ridges protection. A city may not, however, apply a regulation in the ETJ that is is not also applying within the city.Bona fide farm uses in the ETJ are exempt from city zoning to the same extent they would be exempt if the property was in county jurisdiction.

The county loses its jurisdiction for those development regulations that are adopted by the city. it may, however, apply a county regulation that the city does not apply in the ETJ (but the county is not required to do so).

The city does not acquire, nor does the county lose, jurisdiction for regulations adopted under the general ordinance-making power of G.S. 160A-174, such as a nuisance lot, junked car, or noise ordinances.

See this post for more on which regulations are affected by ETJ.

Process for Adoption of ETJ

G.S. 160D-202 includes a detailed process that must be followed by a city in establishing extraterritorial jurisdiction, including newspaper notice, mailed notice, and public hearing requirements.

In certain instances, county approval must be given for a city to exercise its extraterritorial powers. G.S. 160D-202(c) requires county approval whenever a city with a population of more than 10,000 seeks to extend its extraterritorial jurisdiction beyond one mile. It also requires that county approval be secured for the extension of city extraterritorial jurisdiction into any area where the county is already enforcing  county zoning and  subdivision regulations. This includes the one-mile area adjacent to cities.

County Representation on City Boards

A principal concern with granting municipalities extraterritorial power has been the lack of political representation for extraterritorial residents. The legal aspects of this concern were largely resolved when the U.S. Supreme Court concluded that federal constitutional guarantees of due process and equal protection are not violated when states grant municipalities extraterritorial jurisdiction without extending the right to vote in municipal elections to extraterritorial residents. Holt Civic Club v. City of Tuscaloosa, 439 U.S. 60, 70–75 (1978).

The 1958 study commission noted the concern that residents of these areas were not entitled to vote in city elections It  recommended mandatory representation of extraterritorial residents on city planning boards and boards of adjustment “to meet this objection in a practical and yet legal manner.” This recommendation was incorporated into law. G.S. 160D-303 requires proportional representation of ETJ residents on all city appointed boards that deal with city development regulations that are applied in the ETJ. That statute also sets the process the city is to follow in making these ETJ appointments.

Future of ETJ

While most cities in the state have had authority to adopt extraterritorial development regulations for over a half-century, controversy remains.

With adoption of legislation making future involuntary annexation more difficult, some cities have returned their ETJ area to county jurisdiction. Several counties have established policies that limit their approval of new municipal ETJ to those areas  where the city can show it has plans to extend urban services, particularly city water and sewer. The General Assembly has removed ETJ authority for several cities, but has authorized larger ETJ areas for many small population cities. While wholesale revisions of the state’s ETJ scheme have not been seriously considered since 1959, the topic remains controversial, more so in some areas than in others.

Frank Graham had straightforward questions. What is ETJ, is it legal, and why was it allowed? Those questions have straightforward answers laid out above.

The more difficult questions revolve around how the state should state organize its local governments to deal with growth and development on urban fringes. How do we best manage the transition from rural to suburban? Who should plan for orderly and efficient growth in these areas? Which units of government should provide what types of urban services? How is expanding necessary infrastructure to be funded? How should provision of services be coordinated with planning and development regulation? How should cities and counties coordinate their planning efforts? How should we manage for transitions in jurisdiction over time? What is fair, reasonable, equitable, and effective for cities, for counties, and for residents and landowners in these areas?

Those questions are likely to be before our city councils, county boards of commissioners, and the legislature for some time to come. As long as they are, we will continue to grapple with the broader implications of Frank’s questions.