Basics of Development Regulations

To start, let’s consider the basics of development regulations in North Carolina. Development regulations are the local rules governing when, where, and how property can be used and developed. The authority for development regulations is outlined in Chapter 160D of the North Carolina General Statutes. That chapter includes articles on planning, land use zoning, land subdivision, historic preservation, minimum housing, and more. Of course, developments like new residential neighborhoods or new shopping centers involve moving dirt, constructing buildings, and creating new demands for public infrastructure and services. So, development regulations also relate closely to environmental permitting, building safety requirements, infrastructure availability, and local government finance.

Development Impacts on Schools

Because of the rapid population growth in North Carolina, many school districts face overcrowding in their schools. If classrooms are already over capacity and more new families are moving into new homes, the community must find ways to limit growth or provide additional school capacity.

An underlying principle of development regulations is that new development should not unreasonably overburden community facilities and services. In North Carolina, the zoning authority outlined in Chapter 160D recognizes the important role of ensuring that development does not overburden public infrastructure and services: “Zoning regulations shall be made in accordance with a comprehensive plan and shall be designed . . . to facilitate the efficient and adequate provision of transportation, water, sewerage, schools, parks, and other public requirements . . . .” G.S. 160D-701. Similarly, the authority for local subdivision regulation is based on provision of adequate public infrastructure and services:

A subdivision regulation may provide for the orderly growth and development of the local government; for the coordination of transportation networks and utilities within proposed subdivisions with existing or planned streets and highways and with other public facilities; and for the distribution of population and traffic in a manner that will avoid congestion and overcrowding and will create conditions that substantially promote public health, safety, and general welfare.

G.S. 160D-804.

So, development regulations can consider adequacy of public infrastructure in the permitting process. For communities facing school overcrowding, when a school has reached maximum capacity, the local government may say ‘no’ to new development. The regulatory authority for zoning and subdivision allows for an analysis of public infrastructure and services, and the denial of development approvals if the infrastructure or services are inadequate. An adequate public facility ordinance (APFO) was struck down in Lanvale (discussed more below), but the court was focused on the impact fee aspect of that APFO. The basic statutes authorizing zoning and subdivision allow adequacy analysis as part of a development approval process. If public facilities are inadequate, the regulatory powers allow the permit to be denied. However, those regulatory powers do not imply the power to charge impact fees, as discussed more below.

No School Impact Fees

In some cases, development regulations may require exactions to offset the impacts created by a development. A land use exaction requires a developer to give property or money to the public as a condition for a development approval. Justice Alito recognized the basic notion in a notable U.S. Supreme Court decision on exactions: “[M]any proposed land uses threaten to impose costs on the public that dedications of property can offset. Where a building proposal would substantially increase traffic congestion, for example, officials might condition permit approval on the owner’s agreement to deed over the land needed to widen a public road.” Koontz v. St. Johns River Water Mgmt. Dist., 570 U.S. 595, 605, (2013). The basic principle is straightforward, but the legal framework is not simple.

Whenever we talk about exactions, we must consider whether the exaction is constitutionally sound and whether it is authorized by statute. When it comes to school impact fees, North Carolina courts have been clear—local governments do not have statutory authority to impose school impact fees. This is different from many fast-growing states where school impact fees are common. Through a series of cases starting in the early 2000s and culminating with Lanvale Properties, LLC v. County of Cabarrus, 366 N.C. 142 (2012), North Carolina courts ruled against local governments attempting to charge school impact fees on new development. And reframing impact fees as voluntary mitigation payments will not avoid legal challenge. (For more on school impact fees, see this blog from David Owens.)

The Court, in Lanvale, recognized the challenge that fast-growing communities face to fund school capacity, but the Court did not find authority in the current statutes for school impact fees:

We recognize the difficulty that county governments currently face as they try to meet their statutory obligation to provide adequate public school facilities, see N.C.G.S. § 115C–408(b) (2011), and we applaud the County’s commitment to securing additional funds for school construction. But we believe the General Assembly is best suited to address the complex issues involving population growth and its impact on public education throughout the State.

Lanvale Properties, 366 N.C. at 163.

Though local governments may not charge school impact fees for new development, in some circumstances certain development approvals may address provision of school facilities.

Conditional Approvals

Some developments—especially large-scale developments that don’t fit into typical zoning—seek conditional development approvals such as conditional zoning or development agreements. These conditional approvals allow the developer and local government to work together to ensure the development minimizes impacts. These conditional approvals provide some flexibility for what requirements may apply to the approval.

Conditional zoning is authorized by G.S. 160D-703(b). A conditional zoning district is essentially zoning for one particular site or project in which the details and standards are unique to that one site or project. Any conditions are “limited to those that address the conformance of the development and use of the site to local government ordinances, plans adopted pursuant to G.S. 160D-501, or the impacts reasonably expected to be generated by the development or use of the site.” Pursuant to the statutory authority, if the petitioner agrees and consents in writing, a conditional zoning approval may include conditions for dedication of a school site, construction of school facilities, or even “impacts fees.” But, as noted by David Owens in What Conditions Can Be Included in Conditional Zoning?, considerable legal care is warranted when communities include conditions that go beyond the basic zoning authority.

Development agreements are a separate tool for addressing the impacts and coordinating the infrastructure for major developments. Article 10 of Chapter 160 outlines the authority, procedures, and limits for development agreements in North Carolina. The authority is limited with regard to fees and taxes—under a development agreement a local government “may not impose any tax or fee not authorized by otherwise applicable law.” But, a development agreement may address provision of public facilities, as noted at G.S. 160D-1006:

The development agreement may include mutually acceptable terms regarding provision of public facilities and other amenities and the allocation of financial responsibility for their provision, provided any impact mitigation measures offered by the developer beyond those that could be required by the local government shall be expressly enumerated within the agreement, and provided the agreement may not include a tax or impact fee not otherwise authorized by law.

So, in the right circumstances, a development agreement could include a requirement for a developer to provide a site for a school or even construct a school.

Reservation of School Sites

The authorization for subdivision regulations, outlined at G.S. 160D-804(f), states that a subdivision ordinance “may provide for the reservation of school sites in accordance with plans approved by the governing board.” This authority, though, is limited and rarely exercised. Notably the authority is for reservation, not dedication, so the board of education still has to purchase the property.

The process for reservation of schools sites includes the following:

The governing board and the board of education jointly determine the location and size of any school sites to be reserved.
When a developer proposes a subdivision that includes part or all of a school site to be reserved under the plan, the governing board notifies the board of education.
The board of education must promptly decide whether it wants the site to be reserved.
If yes, then the local government ensures that any subdivision or site plan includes the reservation.
Starting with the date of approval of the subdivision or site plan, the board of education has 18 months to acquire the site by purchase or by initiating condemnation proceedings.
If there is no purchase or initiation of condemnation within 18 months, the landowner no longer has to reserve the property.

Schools as Development

The prior section discussed the role of schools in general development. This section considers the special rules for schools as development. What development regulations apply when a new school building is proposed?

Public Buildings Are Subject to Development Regulations

First off, it bears repeating that government buildings are generally subject to local development regulations like zoning and subdivision ordinances. “All local government zoning regulations are applicable to the erection, construction, and use of buildings by the State of North Carolina and its political subdivisions.” G.S. 160D-913. So, if the board of education wants to build a new school or new administrative office building, that development will be subject to the applicable development regulations of the town or county with jurisdiction.

Note that the statute is specific to “the erection, construction, and use of buildings.” A parking lot for school buses, for example, does not constitute a building. Nash-Rocky Mount Bd. of Educ. v. Rocky Mount Bd. of Adjustment, 169 N.C. App. 587 (2005). But, a garage building for school bus maintenance does.

Zoning for Schools

Commonly a local zoning ordinance will list “schools” as a defined use in the use table. As with any defined use, activities that fall under that school definition are permitted in some zoning districts and prohibited in others. Construction of a new school may require a rezoning, a special use permit, and/or site plan review.

In the 2023 legislative session, two bills were proposed to alter the local government authority to zone schools. Among other notable changes to local zoning authority, Senate Bill 675 would have required all zoning ordinances to allow public school buildings to be permitted (by right or as special use) in commercial zoning districts.

Senate Bill 692, which included a number of education-related provisions, also would allow public schools by right in commercial zoning districts (similar to Senate Bill 675). It also would have permitted public, parochial, and other private schools by right in all residential districts under very particular circumstances. One of these limitations included county size and population that only Union, Buncombe, Cumberland, Gaston, Guilford, Forsyth, Durham, Wake, and Mecklenburg counties would meet.

Neither of those two bills were enacted in the 2023 session, but similar provisions may arise in the future.

Charter schools have some flexibility in their charter requirements to accommodate land use decision processes. When a charter school is first chartered, there may be deadlines to begin operations or to commence the term of its charter. Section 2 of S.L. 2022-75 (H.B. 911) amended G.S. 115C-218.5 to allow the charter school to extend such deadlines if the school is seeking land use or development approvals or challenging the denial of land use or development approvals.

School Infrastructure

In addition to the zoning considerations, infrastructure for schools has been a topic of recent legislation and litigation.

The provision of adequate transportation facilities is an important consideration for most development approvals. Commonly zoning requests are denied because the development will add significant traffic to roads that are already strained. State law, though, has limited the extent to which road adequacy may be considered in school developments. G.S. 160D-701 states that zoning “regulations may not include, as a basis for denying a zoning or rezoning request from a school, the level of service of a road facility or facilities abutting the school or proximately located to the school.”

Additionally, state law limits the extent to which municipalities may require street improvements related to schools: “A city may only require street improvements related to schools that are required for safe ingress and egress to the municipal street system and that are physically connected to a driveway on the school site.” G.S. 160A-307.1. The statute then provides

Any required improvements must not exceed what could be required by NCDOT under G.S. 136-18(29) (“the construction and public dedication of acceleration and deceleration lanes, and traffic storage lanes and medians”).
General rules for municipal driveway permits do not apply.
Required improvements are limited to those allowed under the subdivision statutes (G.S. 160D-804).
Any improvements to the municipal street system must be reimbursed by the municipality.
Required improvements may not include required acquisition unless the entity has eminent domain power (any acquisition costs must be reimbursed by the municipality).
These limitations may not be waived as part of a zoning permit condition.

Street improvements and G.S. 160A-307.1 are central to current litigation between a charter school and a local government. In Schooldev East, LLC v. Town of Wake Forest, 284 N.C. App. 434, 876 S.E.2d 607, review allowed, 884 S.E.2d 726 (N.C. 2023), and review on additional issues allowed, 884 S.E.2d 732 (N.C. 2023), the town required sidewalk improvements to connect neighborhoods to the proposed new school development. The charter school argued, among other things, that such a requirement is preempted by G.S. 160A-307.1. The Court of Appeals, in a split decision, ruled in favor of the town, allowing the requirement of sidewalk improvements. The case is now on appeal to the North Carolina Supreme Court.

Going beyond transportation infrastructure, water and sewer capacity for schools is another topic of recent legislation. Section 40 of S.L. 2023-137 (H.B. 600) added a new statute, G.S. 115C-218.36, to provide rules for reserving water and sewer capacity for charter schools. The charter school must inquire about water and sewer availability and the public water system must respond within 30 days. If there is capacity, the public system must preserve capacity for the charter school for at least 24 months.

Conclusion

Development impacts on schools and school impacts as development are two sides of the same coin. In North Carolina, the legal framework is shaped by specific legislative changes and notable court decisions. Especially in fast-growing regions, communities must understand that important legal framework when addressing school capacity challenges

Coates’ Canons NC Local Government Law

Schools and Development Regulations in North Carolina

Published: 06/28/24

Author: Adam Lovelady

There’s a big new development proposed for the edge of town. Schools are already overcrowded. Can the town require the developer to provide for the community’s school needs?