What Conditions Can Be Included in Conditional Zoning?
Published: 11/11/21
Author Name: David Owens
Conditional zoning is a popular development regulation tool used in North Carolina. Legislative conditional zoning was first used in the state in the 1990s, was approved by the courts in 2001, and was expressly authorized by the zoning statutes in 2005. It is now the most frequently made rezoning in the state. With this widespread use comes the question of just what conditions can be included in a conditional rezoning.
The standards in traditional conventional zoning districts (sometimes referred to as general use districts) must be uniformly applied throughout a city or county. The same permitted uses and dimensional standards apply to all property placed in the same zoning district. No site-specific, individualized conditions are allowed. Every property within a particular zoning district, no matter where it is within the city or county, is subject to exactly the same zoning rules.
By contrast, G.S. 160D-703(a)(2) authorizes cities and counties to adopt conditional zoning districts that can include individualized development conditions. If the local government wants to allow some of the permitted uses within a proposed zoning district, but not all of them, it can accomplish that through use of conditional zoning. A fairly common practice of local governments is to amend their zoning text to create a set of conditional zoning districts that parallels their conventional districts. For example, if there is a “Highway Commercial” district, the text would also include a “Highway Commercial-Conditional” district. Then an individual rezoning to the “Highway Commercial-Conditional” would include conditions applicable only to that site. That includes changes to the permitted uses and dimensional standards that would otherwise apply in the regular “Highway Commercial” zoning district. Conditional zoning is a way to allow a landowner to make a use of property that they desire while incorporating conditions that address the concerns of neighbors or local government. For more on the difference between conventional and conditional zoning, see this post and this Ch. 160D guidance document on conditional zoning.
Conditional zoning is very popular in North Carolina. In our 2018 SOG survey, over half of the responding local governments reported use of conditional zoning. Its use is particularly common in larger population cities, with 77 percent of the cities with populations over 25,000 reporting use of conditional zoning. Not only do many local governments make this option available, it is often applied. In our survey, the responding jurisdictions reported that 55 per cent of all rezonings considered in the previous year were rezonings to conditional districts. 78 percent of all rezonings were conditional rezonings in cities with populations over 25,000.
Given this widespread use, a question invariably arises. What type of conditions can be included in a conditional rezoning?
Basic Limits
The general factors that can legitimately be considered in a rezoning, and those that cannot, apply to conditional zoning. For example, it is entirely appropriate to consider the land use impacts of a proposed development and what the comprehensive plan suggests, while it would be illegal to base a decision on the racial, ethnic, or religious identity of the applicant or the identity of the property owner. My colleague Adam Lovelady discusses legitimate and appropriate considerations for legislative zoning decisions here and improper considerations here. These factors fully apply to conditional rezonings. Also, conditional zoning will often also be “spot zoning,” so the factors necessary to show that the zoning is reasonable should be addressed in the rezoning process.
Two Additional Statutory Limits
When conditional zoning is involved, there are two important statutory limits that also must be considered.
First, both the landowner and the local government must agree to place property into a conditional zone and they must also agree on the specific conditions imposed. The landowner does not have to like being in a conditional district. The owner might well prefer that their property be in a conventional zoning district with a wider range of permitted uses and fewer development restrictions. However, the city or county governing board may conclude that such a rezoning would allow some uses or development plans that would be harmful to the neighbors or the public. Conditional zoning allows the owner and local government to find a mutually acceptable alternative to the traditional zoning.
G.S. 160D-703(b) provides that property may only be placed in a conditional zoning district “in response to a petition by all of the owners of the property to be included.” This required “petition” can take the form of a rezoning application or a written request or agreement that a pending rezoning be made a conditional rezoning. If a landowner objects to being in a conditional district, the local government cannot put the property in one. This statutes goes on to provide that while either the owner or the local government may propose specific conditions, “only those conditions approved by the local government and consented to by the petitioner in writing may be incorporated into the zoning regulations.” If an owner objects to a proposed condition, it cannot be included. When the owner objects to a particular condition, the local government has the choice of approving the conditional zoning without the objectionable condition or denying the conditional rezoning if the governing board concludes the rezoning without that condition would be inappropriate.
Second, the zoning statute limits the scope of conditions that can be imposed. G.S. 160D-703(b) says that the conditions imposed in a conditional rezoning are limited to those that address conformance of the development and use of the site to local government ordinances and adopted plans and to those conditions that address “impacts reasonably expected to be generated by the development or use of the site.” This section of the statutes also says that conditions “not authorized by otherwise applicable law,” including taxes, impact fees, building design elements for single-family homes, and excess drive-way improvements, cannot be included “unless consented to by the petitioner in writing.”
So, the local government does not have unlimited discretion in imposing conditions. In addition to the standard constitutional and statutory limits on zoning regulations, all the conditions must be approved by the landowner and they must be tied to securing compliance with adopted ordinances or plans or be reasonably related to minimizing potential impacts of the proposed development. Written approval by the owner to being placed in a conditional zone and to the specific conditions imposed is required.
Potential Conditions
Not surprisingly, the two most used conditions are ones that limit the range of permitted uses and that require a detailed site plan for future development of the site. Both types of conditions are permissible in North Carolina. Over 70 percent of the jurisdictions responding to our 2018 survey reported that their conditional zoning either always or frequently included these two conditions.
Use Restrictions. A conventional zoning district typically allows dozens of different land uses. Some of those uses may have modest land use impacts for the neighbors, while others might be problematic in a particular setting. A condition imposed on a conditional zoning can allow a specific use on a specific parcel that the owner desires while ruling out other uses that are objectionable to the neighbors or local government if placed on that property. A condition can also expand the range of permitted uses, such as allowing a range of mixed uses within a building or allowing a wider range of uses on a larger site, but it more often restricts the uses that would have been allowed in a comparable conventional zoning district. Some zoning regulations allow only conditions that are more stringent than those in the corresponding conventional zoning district while other local ordinances allow any modifications deemed appropriate. State law allows either approach.
Site plans. A site plan incorporated into a conditional rezoning can identify where roads, buildings, parking, particular uses, and buffers will be located. It can provide information on landscaping or stormwater management, although details on these aspects of the development may be addressed later in the permitting process. Securing agreement on the site plan for the forthcoming development at the rezoning stage provides clarity for the owner, developer, and neighbors as to how the development will proceed. It shows how potential adverse impacts will be addressed and minimized. A clear site plan helps assure that there will not be unpleasant surprises for any of the affected parties as the development materializes.
Site development details. A related set of permissible conditions are often used to address specific aspects or details of the potential development. While not quite as frequently employed as the two conditions noted above, over 50 percent of jurisdictions responding to our 2018 survey reported frequently using these types of conditions.
While a commercial district might require that buildings have a 25-foot setback from the rear property line, a conditional district could increase that to a 50-foot rear yard setback to address potential negative impacts on neighboring residential properties. Other measures could be required to buffer approved development from neighboring properties, such as requiring a solid fence at a specified location, additional landscaping, or restrictions on exterior lighting. Alternatively, the setback in a conditional district could be reduced if a smaller setback would provide an adequate distance for the particular development and setting. How streets within the development connect to neighboring streets can be specified. The location and design of driveways can be specified. A condition could set the maximum density of future residential development to assure that there are adequate streets, utilities, schools, and recreational facilities to support the development. The design of buildings can be specified to assure harmony with their surroundings. G.S. 160D-702(b) allows the imposition of building design standards even on single-family homes if that is voluntarily consented to by the owners as part of seeking approval of a rezoning. Sometimes something as simple as a condition specifying the location and screening of trash dumpsters or the hours of operation of a commercial use can be the key to resolving potential conflicts between the developer and the neighbors. As with the range of permitted uses, a zoning regulation can restrict these detailed conditions to those that are more stringent than the corresponding traditional district or it can allow any modification deemed appropriate.
Infrastructure. For some developments, particularly those that are very large, securing adequate supporting infrastructure is a key consideration in development approval. The location, construction standards, and financing of roads, utilities, schools, parks, and greenways are important for both the developer and the local government. Details on how this is to be accomplished can be incorporated into the conditions included in a conditional rezoning. These types of conditions are permissible but are less commonly imposed.
If there is to be substantial cost-sharing or the voluntary provision of extra public benefits, it would be prudent for the local government and the landowner to use a development agreement in addition to conditional zoning. G.S. 160D-1006(d) allows a development agreement to include mutually acceptable provisions for financing public facilities, provided that any measures offered by the developer beyond those that could be required by the local government are expressly set out in the agreement. While these additional measures in a development agreement cannot include a tax or impact fee not otherwise authorized, they can include a wide range of possible conditions, including donations of land and construction of public and community facilities. Development agreements can include, for example, an agreement to donate land for a school or a fire station, relocation of a road, or even construction of a building for a community nonprofit (such as a YMCA) – items that could not be mandated unilaterally by the local government, but which can be included in the agreement with the voluntary written consent of the landowner. The statutes antincipate that a development agreement and a conditional rezoning for a project will sometimes be negotiated and approved at the same time. G.S. 160D-1003(b) allows for a development agreement and a rezoning to be considered concurrently and for a development agreement to be incorporated into a conditional rezoning. When this is done, one of the conditions generally included in the conditional rezoning is compliance with all the terms and conditions of the accompanying development agreement.
Social equity. A final set of conditions that are sometimes considered are those that address social equity concerns. While common in some states, this type of condition has to date not been frequently applied in North Carolina. These types of conditions are not specifically addressed by our statutes or cases. However, they may be proposed to secure plan compliance or to address impacts of the development. For example, some North Carolina comprehensive plans call for a full range of housing affordability in new developments. Other plans may address the need for more affordable and work-force housing. In response, some conditional zonings and development agreements have included agreement on provision of a specified amount of affordable housing or commitments to make payments to a local affordable housing trust fund.
Developers of some projects are willing to commit to employment of local workers or those under-represented in the workforce, to provide job training programs, or to undertake similar initiatives. In some states community benefit agreements are used, where the developer and community organizations negotiate and adopt agreements prior to or as a part of the development approval process. These agreements can build community support for a development by assuring that members of the community, as well as the developer, benefit from the development. The degree to which a local government can enforce such an agreement if it is incorporated or referenced in a conditional zoning, or whether only the parties can do so, is unclear in North Carolina.
While it is likely that these social equity conditions can be included in a conditional rezoning and in a development agreement if both the owner and the local government are agreeable, it is particularly important to secure written consent for their inclusion from the landowner. Given their novelty and the lack of express statutory authority to use them, considerable legal care is warranted if they are to be considered.
Impermissible conditions. There remain a few issues that cannot be addressed by conditional zoning conditions. As noted at the outset, factors that are impermissible to be considered in any zoning regulation cannot be addressed by conditions in conditional zoning. Racial, ethnic, or religious discrimination are not permitted. A condition cannot regulate who owns the development or whether it is owner or renter occupied.
Final Considerations
The conditions incorporated into a conditional rezoning should be clearly stated and should incorporate all key provisions that have been agreed to by the landowner and the local government. If a condition is discussed and informally agreed to, but it is not included in the adopted rezoning, it is not legally enforceable.
That said, it is important to be careful about how much detail is incorporated into the conditions. After all, once adopted the conditions become mandatory zoning standards with the force of law. While the regulations can allow minor modifications to be made administratively, all major modifications must go through the entire zoning amendment process (click for details on each). It may be desirable to leave some flexibility about the details of the approved project or to address those details at the permitting stages of development that happen after a rezoning. Just how much detail or flexibility is desired, and on which aspects of the development, is a policy and practical choice that should be considered.
Finally, administration and enforcement of the zoning should be considered. Adequate record keeping, staff support to inspect for compliance and enforce conditions, and education of the landowner and neighbors are all critical for the ongoing success of conditional zoning. Creating individualized, site-specific development regulations creates a substantially more complex regulatory program than reliance on conventional zoning districts with uniform standards for all property in a particular district. While the benefits may well outweigh these costs, a local government embarking upon extensive use of conditional zoning should keep this in mind.
In sum, conditional zoning is a valuable tool that allows development regulations to be carefully tailored to individual sites and particular development schemes. It allows reasoned negotiation and appropriate balancing of landowner, neighborhood, and governmental interests. Properly applied, it serves the legitimate interests of all involved. A good understanding of the scope of permissible conditions will help those involved navigate this complex process in a fair, reasonable, and legally defensible fashion.
1
Coates’ Canons NC Local Government Law
What Conditions Can Be Included in Conditional Zoning?
Published: 11/11/21
Author Name: David Owens
Conditional zoning is a popular development regulation tool used in North Carolina. Legislative conditional zoning was first used in the state in the 1990s, was approved by the courts in 2001, and was expressly authorized by the zoning statutes in 2005. It is now the most frequently made rezoning in the state. With this widespread use comes the question of just what conditions can be included in a conditional rezoning.
The standards in traditional conventional zoning districts (sometimes referred to as general use districts) must be uniformly applied throughout a city or county. The same permitted uses and dimensional standards apply to all property placed in the same zoning district. No site-specific, individualized conditions are allowed. Every property within a particular zoning district, no matter where it is within the city or county, is subject to exactly the same zoning rules.
By contrast, G.S. 160D-703(a)(2) authorizes cities and counties to adopt conditional zoning districts that can include individualized development conditions. If the local government wants to allow some of the permitted uses within a proposed zoning district, but not all of them, it can accomplish that through use of conditional zoning. A fairly common practice of local governments is to amend their zoning text to create a set of conditional zoning districts that parallels their conventional districts. For example, if there is a “Highway Commercial” district, the text would also include a “Highway Commercial-Conditional” district. Then an individual rezoning to the “Highway Commercial-Conditional” would include conditions applicable only to that site. That includes changes to the permitted uses and dimensional standards that would otherwise apply in the regular “Highway Commercial” zoning district. Conditional zoning is a way to allow a landowner to make a use of property that they desire while incorporating conditions that address the concerns of neighbors or local government. For more on the difference between conventional and conditional zoning, see this post and this Ch. 160D guidance document on conditional zoning.
Conditional zoning is very popular in North Carolina. In our 2018 SOG survey, over half of the responding local governments reported use of conditional zoning. Its use is particularly common in larger population cities, with 77 percent of the cities with populations over 25,000 reporting use of conditional zoning. Not only do many local governments make this option available, it is often applied. In our survey, the responding jurisdictions reported that 55 per cent of all rezonings considered in the previous year were rezonings to conditional districts. 78 percent of all rezonings were conditional rezonings in cities with populations over 25,000.
Given this widespread use, a question invariably arises. What type of conditions can be included in a conditional rezoning?
Basic Limits
The general factors that can legitimately be considered in a rezoning, and those that cannot, apply to conditional zoning. For example, it is entirely appropriate to consider the land use impacts of a proposed development and what the comprehensive plan suggests, while it would be illegal to base a decision on the racial, ethnic, or religious identity of the applicant or the identity of the property owner. My colleague Adam Lovelady discusses legitimate and appropriate considerations for legislative zoning decisions here and improper considerations here. These factors fully apply to conditional rezonings. Also, conditional zoning will often also be “spot zoning,” so the factors necessary to show that the zoning is reasonable should be addressed in the rezoning process.
Two Additional Statutory Limits
When conditional zoning is involved, there are two important statutory limits that also must be considered.
First, both the landowner and the local government must agree to place property into a conditional zone and they must also agree on the specific conditions imposed. The landowner does not have to like being in a conditional district. The owner might well prefer that their property be in a conventional zoning district with a wider range of permitted uses and fewer development restrictions. However, the city or county governing board may conclude that such a rezoning would allow some uses or development plans that would be harmful to the neighbors or the public. Conditional zoning allows the owner and local government to find a mutually acceptable alternative to the traditional zoning.
G.S. 160D-703(b) provides that property may only be placed in a conditional zoning district “in response to a petition by all of the owners of the property to be included.” This required “petition” can take the form of a rezoning application or a written request or agreement that a pending rezoning be made a conditional rezoning. If a landowner objects to being in a conditional district, the local government cannot put the property in one. This statutes goes on to provide that while either the owner or the local government may propose specific conditions, “only those conditions approved by the local government and consented to by the petitioner in writing may be incorporated into the zoning regulations.” If an owner objects to a proposed condition, it cannot be included. When the owner objects to a particular condition, the local government has the choice of approving the conditional zoning without the objectionable condition or denying the conditional rezoning if the governing board concludes the rezoning without that condition would be inappropriate.
Second, the zoning statute limits the scope of conditions that can be imposed. G.S. 160D-703(b) says that the conditions imposed in a conditional rezoning are limited to those that address conformance of the development and use of the site to local government ordinances and adopted plans and to those conditions that address “impacts reasonably expected to be generated by the development or use of the site.” This section of the statutes also says that conditions “not authorized by otherwise applicable law,” including taxes, impact fees, building design elements for single-family homes, and excess drive-way improvements, cannot be included “unless consented to by the petitioner in writing.”
So, the local government does not have unlimited discretion in imposing conditions. In addition to the standard constitutional and statutory limits on zoning regulations, all the conditions must be approved by the landowner and they must be tied to securing compliance with adopted ordinances or plans or be reasonably related to minimizing potential impacts of the proposed development. Written approval by the owner to being placed in a conditional zone and to the specific conditions imposed is required.
Potential Conditions
Not surprisingly, the two most used conditions are ones that limit the range of permitted uses and that require a detailed site plan for future development of the site. Both types of conditions are permissible in North Carolina. Over 70 percent of the jurisdictions responding to our 2018 survey reported that their conditional zoning either always or frequently included these two conditions.
Use Restrictions. A conventional zoning district typically allows dozens of different land uses. Some of those uses may have modest land use impacts for the neighbors, while others might be problematic in a particular setting. A condition imposed on a conditional zoning can allow a specific use on a specific parcel that the owner desires while ruling out other uses that are objectionable to the neighbors or local government if placed on that property. A condition can also expand the range of permitted uses, such as allowing a range of mixed uses within a building or allowing a wider range of uses on a larger site, but it more often restricts the uses that would have been allowed in a comparable conventional zoning district. Some zoning regulations allow only conditions that are more stringent than those in the corresponding conventional zoning district while other local ordinances allow any modifications deemed appropriate. State law allows either approach.
Site plans. A site plan incorporated into a conditional rezoning can identify where roads, buildings, parking, particular uses, and buffers will be located. It can provide information on landscaping or stormwater management, although details on these aspects of the development may be addressed later in the permitting process. Securing agreement on the site plan for the forthcoming development at the rezoning stage provides clarity for the owner, developer, and neighbors as to how the development will proceed. It shows how potential adverse impacts will be addressed and minimized. A clear site plan helps assure that there will not be unpleasant surprises for any of the affected parties as the development materializes.
Site development details. A related set of permissible conditions are often used to address specific aspects or details of the potential development. While not quite as frequently employed as the two conditions noted above, over 50 percent of jurisdictions responding to our 2018 survey reported frequently using these types of conditions.
While a commercial district might require that buildings have a 25-foot setback from the rear property line, a conditional district could increase that to a 50-foot rear yard setback to address potential negative impacts on neighboring residential properties. Other measures could be required to buffer approved development from neighboring properties, such as requiring a solid fence at a specified location, additional landscaping, or restrictions on exterior lighting. Alternatively, the setback in a conditional district could be reduced if a smaller setback would provide an adequate distance for the particular development and setting. How streets within the development connect to neighboring streets can be specified. The location and design of driveways can be specified. A condition could set the maximum density of future residential development to assure that there are adequate streets, utilities, schools, and recreational facilities to support the development. The design of buildings can be specified to assure harmony with their surroundings. G.S. 160D-702(b) allows the imposition of building design standards even on single-family homes if that is voluntarily consented to by the owners as part of seeking approval of a rezoning. Sometimes something as simple as a condition specifying the location and screening of trash dumpsters or the hours of operation of a commercial use can be the key to resolving potential conflicts between the developer and the neighbors. As with the range of permitted uses, a zoning regulation can restrict these detailed conditions to those that are more stringent than the corresponding traditional district or it can allow any modification deemed appropriate.
Infrastructure. For some developments, particularly those that are very large, securing adequate supporting infrastructure is a key consideration in development approval. The location, construction standards, and financing of roads, utilities, schools, parks, and greenways are important for both the developer and the local government. Details on how this is to be accomplished can be incorporated into the conditions included in a conditional rezoning. These types of conditions are permissible but are less commonly imposed.
If there is to be substantial cost-sharing or the voluntary provision of extra public benefits, it would be prudent for the local government and the landowner to use a development agreement in addition to conditional zoning. G.S. 160D-1006(d) allows a development agreement to include mutually acceptable provisions for financing public facilities, provided that any measures offered by the developer beyond those that could be required by the local government are expressly set out in the agreement. While these additional measures in a development agreement cannot include a tax or impact fee not otherwise authorized, they can include a wide range of possible conditions, including donations of land and construction of public and community facilities. Development agreements can include, for example, an agreement to donate land for a school or a fire station, relocation of a road, or even construction of a building for a community nonprofit (such as a YMCA) – items that could not be mandated unilaterally by the local government, but which can be included in the agreement with the voluntary written consent of the landowner. The statutes antincipate that a development agreement and a conditional rezoning for a project will sometimes be negotiated and approved at the same time. G.S. 160D-1003(b) allows for a development agreement and a rezoning to be considered concurrently and for a development agreement to be incorporated into a conditional rezoning. When this is done, one of the conditions generally included in the conditional rezoning is compliance with all the terms and conditions of the accompanying development agreement.
Social equity. A final set of conditions that are sometimes considered are those that address social equity concerns. While common in some states, this type of condition has to date not been frequently applied in North Carolina. These types of conditions are not specifically addressed by our statutes or cases. However, they may be proposed to secure plan compliance or to address impacts of the development. For example, some North Carolina comprehensive plans call for a full range of housing affordability in new developments. Other plans may address the need for more affordable and work-force housing. In response, some conditional zonings and development agreements have included agreement on provision of a specified amount of affordable housing or commitments to make payments to a local affordable housing trust fund.
Developers of some projects are willing to commit to employment of local workers or those under-represented in the workforce, to provide job training programs, or to undertake similar initiatives. In some states community benefit agreements are used, where the developer and community organizations negotiate and adopt agreements prior to or as a part of the development approval process. These agreements can build community support for a development by assuring that members of the community, as well as the developer, benefit from the development. The degree to which a local government can enforce such an agreement if it is incorporated or referenced in a conditional zoning, or whether only the parties can do so, is unclear in North Carolina.
While it is likely that these social equity conditions can be included in a conditional rezoning and in a development agreement if both the owner and the local government are agreeable, it is particularly important to secure written consent for their inclusion from the landowner. Given their novelty and the lack of express statutory authority to use them, considerable legal care is warranted if they are to be considered.
Impermissible conditions. There remain a few issues that cannot be addressed by conditional zoning conditions. As noted at the outset, factors that are impermissible to be considered in any zoning regulation cannot be addressed by conditions in conditional zoning. Racial, ethnic, or religious discrimination are not permitted. A condition cannot regulate who owns the development or whether it is owner or renter occupied.
Final Considerations
The conditions incorporated into a conditional rezoning should be clearly stated and should incorporate all key provisions that have been agreed to by the landowner and the local government. If a condition is discussed and informally agreed to, but it is not included in the adopted rezoning, it is not legally enforceable.
That said, it is important to be careful about how much detail is incorporated into the conditions. After all, once adopted the conditions become mandatory zoning standards with the force of law. While the regulations can allow minor modifications to be made administratively, all major modifications must go through the entire zoning amendment process (click for details on each). It may be desirable to leave some flexibility about the details of the approved project or to address those details at the permitting stages of development that happen after a rezoning. Just how much detail or flexibility is desired, and on which aspects of the development, is a policy and practical choice that should be considered.
Finally, administration and enforcement of the zoning should be considered. Adequate record keeping, staff support to inspect for compliance and enforce conditions, and education of the landowner and neighbors are all critical for the ongoing success of conditional zoning. Creating individualized, site-specific development regulations creates a substantially more complex regulatory program than reliance on conventional zoning districts with uniform standards for all property in a particular district. While the benefits may well outweigh these costs, a local government embarking upon extensive use of conditional zoning should keep this in mind.
In sum, conditional zoning is a valuable tool that allows development regulations to be carefully tailored to individual sites and particular development schemes. It allows reasoned negotiation and appropriate balancing of landowner, neighborhood, and governmental interests. Properly applied, it serves the legitimate interests of all involved. A good understanding of the scope of permissible conditions will help those involved navigate this complex process in a fair, reasonable, and legally defensible fashion.
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