Rezoning Conditions Done Right

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David Owens

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A developer proposes rezoning a parcel from a low density residential zone to a commercial zoning district. The neighbors would be satisfied with some of the uses allowed in the more intensive district, but are wary about others. The staff has several concerns about traffic flow and setbacks that are not addressed in the development standards in the proposed new zoning district. All of these are items that could be resolved with conditions on the approval. Is there a way these considerations be incorporated into the rezoning decision?

 As we saw in a previous post, there are serious legal problems if a city or county attempts to limit the range of uses allowed or attempts to impose site-specific restrictions when considering a rezoning to a conventional zoning district. In North Carolina there are two ways to get around this problem.

Before looking at those two options, a little background on the different types of districts is a useful starting point. As different adoption procedures must be followed depending upon which type of district is involved, it is vitally important that landowners, neighbors, staff, planning boards, and elected official understand these differences. This can be especially confusing because the two options used to impose site specific conditions—conditional use district zoning and conditional zoning—sound alike but have significantly different adoption procedures. 

Traditional zoning districts cannot be used if site specific conditions are needed at the rezoning stage. The most common type of zoning district is the conventional district, such as single family residential, highway commercial, or light industrial. Conventional zoning districts (also sometimes termed “general use districts” or “base districts”) are those with a variety of permitted land uses in each district. Conventional zoning districts may also include some uses allowed only by special or conditional use permits. Many zoning ordinances also include overlay zoning districts. These are special zones in which requirements are imposed in addition to the basic or underlying zoning district requirements. In some instances overlay districts may relieve the property of a requirement in the underlying conventional district. Typical overlay districts include floodplain districts, historic districts, airport districts, and highway corridor districts. A third type of district included in many zoning ordinances is a floating district. These are districts that are defined in the text of the ordinance but are applied or mapped only upon petition. The most common example is a planned unit development (PUD) district, which often requires an overall concept plan for development of the entire tract prior to rezoning. A key limitation on all of these districts is that the standards and conditions must be uniform for all property placed in that district. Site specific variation in the standards is not allowed.

 If site specific conditions are to be imposed on a rezoning, a special type of district must be used. North Carolina law (unlike some other states) allows the use of two types of zoning districts that apply site-specific development standards—conditional use districts and conditional zoning. A city or county zoning ordinance can include either or both of these tools.

 Conditional use district (CUD) zones involve a two-step process. First, a landowner requests that property be placed in a new zoning district that has no permitted uses, only special or conditional uses. No new use of land may be undertaken within the district unless a special or conditional use permit is secured (some ordinances call these “special use districts” which is just another term for “conditional use districts;” there is no legal difference between the two). Second, the landowner applies for a conditional use permit to authorize a particular development. The zoning ordinance text usually creates one conditional use district to correspond with each conventional zoning district, such as an R-5 district and an R-5-CU district. In the conditional use district all of the permitted uses in the conventional district are converted to special or conditional uses in the parallel conditional use district.

 Conditional use district zoning was pioneered by Greensboro in 1972, was later authorized by local legislation for about twenty local governments, and in 1985 was incorporated into G.S. 153A-342 and 160A-382. In Chrismon v. Guilford County, 322 N.C. 611, 370 S.E.2d 579 (1988), the court approved the use of conditional use districts and ruled that the zoning enabling statutes provided adequate statutory authority for conditional use district zoning even before this specific authorization was adopted.

 The critical defining characteristic of conditional use district zoning is that it requires two legally separate decisions—the decision to rezone into a conditional use district and the decision on a conditional use permit. The rezoning decision must meet all of the statutory requirements for legislative decisions and the permit decision must meet all of the constitutional requirements for quasi-judicial decisions. Village Creek Property Owners’ Ass’n, Inc. v. Town of Edenton, 135 N.C. App. 482, 520 S.E.2d 793 (1999). The legislative decision about rezoning is based on a consideration of the policy question of whether some limited alternative use is appropriate for the site, and the subsequent quasi-judicial decision on the conditional use permit is based on whether the particular application meets the standards set in the first decision. If the petition for the rezoning is denied, the board does not decide the permit application, as the rezoning is necessary to create the eligibility for the special or conditional use permit. Coucoulas/Knight Props. v. Town of Hillsborough, 199 N.C. App. 455, 683 S.E.2d 228 (2009), aff’d per curiam, 364 N.C. 127, 691 S.E.2d 441 (2010).

 Over time, many local governments concluded that while this tool added needed flexibility, its application was problematic. The principal problems stem from the requirement to observe the more restrictive quasi-judicial procedures for the conditional use permit while considering the legislative rezoning. This limits contact and discussion with any affected parties outside of the hearing and requires that there be substantial, competent, material evidence in the record to support findings for the permit decision. This formal, legalistic process was seen by some local governments as unduly restricting the informal discussions and negotiations that are often involved in rezoning decisions.

 So an alternative developed—purely legislative conditional zoning. Charlotte led the way with use of this tool and a number of the state’s larger cities began using this tool in the 1990s. This alternative eliminates the conditional use permit and incorporates all of the site-specific standards directly into the zoning district regulations. The court held conditional zoning was allowed by the zoning statutes and was constitutionally permissible in two cases from Charlotte. Summers v. City of Charlotte, 149 N.C. App. 509, 562 S.E.2d 18, review denied, 355 N.C. 758, 566 S.E.2d 482 (2002); Massey v. City of Charlotte, 145 N.C. App. 345, 550 S.E.2d 838, review denied, 354 N.C. 219, 554 S.E.2d 342 (2001). In 2005 the General Assembly amended G.S. 160A-382(a) and 153A-342(a) to explicitly authorize city and county use of conditional zoning.

A standard practice in North Carolina cities and counties using conditional zoning is to amend the ordinance text to create a set of conditional zoning districts to correspond with each conventional zoning district (though such parallel districts are not legally required). However, rather than requiring that all uses secure a conditional use permit, as is done with conditional use district zoning, individualized conditions and site plan provisions are incorporated (usually by reference) into the zoning district requirements. In most instances, the provisions in the conditional district are more stringent than those in the corresponding conventional districts. The conditional district may, for example, have a much narrower list of permitted uses and may increase the buffering requirements to provide additional protection to neighboring uses. In the absence of a local ordinance provision to the contrary, it is however legally permissible to tailor standards that are less restrictive than those in the corresponding conventional district. Rakestraw v. Town of Knightdale, 188 N.C. App. 129, 136, 654 S.E.2d 825, 830, review denied, 362 N.C. 237, 659 S.E.2d 739 (2008). In Sapp v. Yadkin County, ___ N.C. App. ___, 704 S.E.2d 909 (2011), the court held there was no requirement that the conditional zoning district standards incorporate the conditional use permit standards from the parallel conventional zoning district.

The use of both conditional use district zoning and conditional zoning is now commonplace in North Carolina. Despite the complexity of the process, a 2006 SOG survey indicated that conditional use districts were being used by about 40% of the state’s cities and counties. A third of the responding cities and a quarter of the responding counties were using purely legislative conditional zoning. These tools are not only on the books, they are actively used. Asked about the types of rezonings they had made over the past year, North Carolina cities and counties reported in 2006 that over a third of all rezonings included site specific conditions. The responding cities and counties reported consideration of 3,029 rezoning petitions. Fifty-seven percent were for rezonings to conventional districts, 21 percent to conditional use districts, and 15 percent to conditional districts. The use of conditions in rezonings is particularly common in more populous cities. Cities with populations over 25,000 reported over half of their rezoning petitions were for conditional or conditional use district rezonings.

 State law imposes some limits on how conditional use district and conditional zoning may be used. Land may be placed in a conditional use district or conditional district only upon petition of all of the owners of the land to be included. G.S. 160A-382(c) and 153A-342(c) provide that specific conditions may be suggested by the owner or the government, but only those conditions mutually acceptable to both the owner and the government may be incorporated into the ordinance or individual permit involved. These statutes also provide that any conditions or site specific standards imposed are limited to those that address the conformance of the development and use of the site to city or county ordinances and officially adopted plans and those that address the impacts reasonably expected to be generated from the development or use of the site.

Conditional use districts and conditional zoning provide important opportunities to carefully tailor regulations to address the interests of the landowner, the neighbors, and the public. In the example we began with, these special zoning districts can be used to limit the range of permitted uses on the property and to require a particular traffic design, neither of which can be done with a rezoning to a conventional zoning district. This often allows a developer to proceed with a project in a way that addresses site specific concerns of the neighbors and the local government. Conditional use districts and conditional zoning is complicated, so care is needed in their application. This is especially the case when a quasi-judicial conditional use permit is part of the mix. And a good land use plan is vital for establishing a context for framing appropriate conditions, avoiding ad hocery run amuck. But if proper care is exercised, these are an increasingly important and useful zoning tools.

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