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The Dark Side of Zoning

An interesting op-ed piece in Sunday's Honolulu Star-Bulletin, "Thank zoning laws for your peaceful home," extols the virtues of zoning:

It has now been more than 85 years since the residents and city council of the little village of Euclid, Ohio, found that their quiet neighborhoods, where their children played, where they walked their dogs and spent their quiet hours after a hard day's work, had no legal government protection from what could be built next door; not from a horse stable, a cement factory or even a slaughterhouse. So to their credit, Euclidian zoning was born, and upheld by the courts as a reasonable protection for residential areas.

The case the author is referring to, of course, is Village of Euclid v. Ambler Realty Co., 272 U.S. 365 (1926), the case in which the U.S. Supreme Court first upheld the segregation of land uses in an Ohio suburban town into districts against a substantive due process challenge. Law students study the case, land use lawyers and planners know it intimately, and "Euclidean" zoning has become the shorthand for district-based single use zoning.

Overall the author's points are valid, as zoning has become so well accepted as the norm that its general validity is not often questioned. (Only one major U.S. city -- Houston, Texas -- has no formal zoning code, although it does have land use and other regulations governing the use of property.)  However, before thanking Euclid and zoning for too much, a couple of points should be clarified, because zoning has a dark side which has been present since its inception. 

First, the contention that before zoning, the residents of Euclid had no legal protection against a slaughterhouse or cement factory being located next door is not quite right: the law of public and private nuisance allowed (and still allow) property owners to go to court to prevent uses of property that injure their own property. At common law, no one had the right to make use of their property in such a way to injure their neighbors. The government's police powers could also be used to protect against nuisances. See, e.g., Hadachek v. Sebastian, 239 U.S. 394 (1915).

Second, the nuisance principle played an important part in convincing a very conservative Supreme Court to produce a surprisingly Progressive decision. After all, Euclid was decided during a time in which the Court routinely struck down all sorts of government regulations on the basis that they violated economic rights or the freedom to contract. Given the Court's philosophical leanings, it was even more surprising that the Euclid decision was authored by one of the "Four Horsemen," Justice Sutherland. These Justices were apparently convinced to treat zoning as a form of nuisance prevention. What was the "nuisance" being prevented?  Apartments. Specifically, apartments near single family homes.

In a carefully worded after-the-deadline amicus brief filed by Alfred Bettman (who just happened to be a good friend of Chief Justice Taft) on behalf of the National Conference on City Planning, he argued that zoning was simply the "modern mode" of nuisance law, and thus validly could keep "residential" uses separate from apartments which are "disorderly, noisy, slovenly, blighted and slum-like districts" in the same fashion as nuisance law. 

In those days, "slums" and "tenements" were code words for "immigrants" and "minorities," and it should not be a big jump to see how the conservative Justices received what we would today call the "meta-message" loud and clear: if you uphold zoning, we can keep "those" kind of people away from "our" kind of people. With those of roots, it should be no surprise that in the intervening 85 years, zoning has sometimes been to keep "undesirables" out of the neighborhood, to validate NIMBYism, or even as a weapon for out-and-out racial discrimination and segregation of races and classes. The district judge had invalidated Euclid's ordinance for the latter reason, but was reversed by the Supreme Court.

Interesting historical note: the first vote by the Court was 5-4 to affirm the district court's decision, but after Bettman contacted Chief Justice Taft and suggested that his brief was important enough to be filed after the deadline (and after oral argument), the case was reargued, this time with a different result. I guess back then, this is what was meant by "friend of the court." Today, we'd call it an ex parte contact.

If you want the Bettman brief, let me know and I will send you a copy. Professor Gideon Kanner posts his thoughts on the case here. For more about the Euclid case, pick up a copy of The Zoning of America: Euclid v. Ambler, available from Amazon.

Oral Argument Scheduled in Ninth Circuit Maui Vacation Rental Appeal

The Ninth Circuit has scheduled oral arguments in Maui Vacation Rental Association, Inc. v. County of Maui, No. 08-15251, the Ninth Circuit appeal from the Hawaii district court's dismissal of MVRA's complaint which sought to declare Maui's shut down of vacation rentals illegal. The court will hear argument on November 21, 2008, at 9:00 a.m. in Honolulu.

The issues in the case are spelled out in the briefs:

• Opening Brief of MVRA

• Answering Brief of the County of Maui

• Reply Brief of MVRA

The case and the issues have also been reported in the media:

• Los Angeles Times: Maui: Vacation rentals and B&Bs shut down and 50 illegal Maui B&Bs & vacation rentals shut down

• San Francisco Chronicle: Maui County closes unlicensed bed and breakfasts and vacation rentals

• The Maui News: Vacation rental suit dismissed in federal court

• Honolulu Star-Bulletin: Maui B&Bs face 'crisis'

• inversecondemnation.com: Federal Court Dismisses Vacation Rental Due Process Claims -- Details (with links to the District Court's opinion, MVRA's complaint, and the briefs in the district court)

Ninth Circuit: City's (Alleged) Failure to Enforce the Zoning Code Is Not A Substantive Due Process Violation (Oh, And Armendariz is Still Overruled)

In Shanks v. Byrd, No. 06-35665 (Aug. 27, 2008), the Ninth Circuit held that a municipality's alleged failure to enforce its zoning laws was not a violation of the Fourteenth Amendment.

Developers who convert homes into student residents apparently did not obtain all of the appropriate permits from Spokane, Washington to remodel a portion of a house in the city's Mission Avenue Historic District.  The city issued a building permit, but the Spokane zoning code requires additional permissions when historic landmarks are involved, and the developers did not seek or obtain a "certificate of appropriateness" or an "administrative special permit" from the city's Historic Landmark Commission.  The city did not object, and took no steps to require the permits.

A group of neighbors and community organizations sued the property owners and the city, alleging the city's failure to enforce the zoning code was a violation of their due process rights and a violation of a federal civil rights statute (42 U.S.C. § 1983), and violated the National Historic Preservation Act and the Spokane zoning code.  The district court dismissed the complaint for failure to state a claim, and the Ninth Circuit affirmed. 

Relying on Armendariz v. Penman, 75 F.3d 1311 (9th Cir. 1996), the city first claimed the due process claims were preempted by the Takings Clause.  The city asserted that the plaintiffs' claims that the city's action in not enforcing the zoning code caused a diminution in the value of the plaintiffs' property was a "takings" claim that must be asserted under the Fifth Amendment.  The court rejected the argument, noting that Armendariz was overruled in Crown Point Dev., Inc. v. City of Sun Valley, 506 F.23d 851 (9th Cir. 2007) (a decision we discussed here and here):

Expressly repudiating Squaw Valley's suggestion that a "substantive due process challenge brought in the context of regulating use of real property might not be viable," we recently held that "the Armendariz line of cases no longer can be understood to create a blanket prohibition of all property-related substantive due process claims."

Slip op. at 11834 (citing Action Apartment Ass'n, Inc. v. Santa Monica Rent Control Bd., 509 F.3d 1020, 1025 (9th Cir. 2007)).  The court noted that the plaintiffs were not seeking just compensation, but an invalidation of the land use action that was alleged to be "arbitrary and capricious." 

The court disposed of the substantive due process claim by first determining that the developers were not acting under color of state law, and the city had done nothing -- except, perhaps, failing to protect the plaintiffs from the negative consequences of the development -- that could be said to be "state action."  Slip op. at 11836.  Further, the court held that the failure to enforce the law was not "egregious official conduct" or an "abuse of power."  Id. at 11837.  "There is no evidence of a sudden change in course, malice, bias, pretext or indeed, anything more than a lack of due care on Spokane's part."  Id. at 11838.

Addressing the procedural due process claim, the Ninth Circuit held that the plaintiffs did not have a protected property interest in the proper application of the city's zoning code, because the code does not contain mandatory language constraining the city's conduct:

Logan Neighborhood does not have a legitimate claim of entitlement to the denial of the Dressels' permit in accordance with the historic preservation provisions.

Id. at 11841.  The Ninth Circuit summarily rejected the plaintiffs' NHPA argument because that statute does not create a private right of action.  The court also rejected the plaintiffs' state law claims for lack of a substantial federal question.

Read the full decision here.  Our thanks to Honolulu attorney Andy Beaman for alerting us to this case. 

Zoning Inspectors Need A Warrant

An interesting Sixth Circuit case summarized on Law of the Land by Professor Patty Salkin, Jacob v. Township of West Bloomfield, 531 F.3d 385 (6th Cir. July 3, 2008), which held that zoning inspectors are required by the Fourth Amendment's search and seizure clause must obtain a warrant if the zoning ordinance they are purporting to enforce can lead to criminal prosecution. 

I won't go into the details of the decision since Professor Salkin analyzes the case here, but the case is important since many zoning ordinances are criminal or quasi-criminal in nature.  The primary penalties for violation of Maui County's zoning ordinance, for example, are criminal, with the administrative enforcement process serving as an alternative -- or additional -- process. 

In Jacob, the property owner was actually prosecuted criminally, but the court held that this was not the determinative factor, and that a zoning inspector is not subject to the warrant requirement only if she is conducting a search for "purely administrative purposes."  Slip op. at 4.  The mere threat of criminal prosecution is enough to trigger the need to obtain a warrant.  The court spelled out other factors that led to the conclusion that a warrant should have been obtained:

Defendant specifically targeted his investigation at Plaintiff after receiving a complaint about the conditions of Plaintiff’s property, and he continued to single-out Plaintiff for continuing intrusions as Plaintiff failed to comply with the land use ordinance. Defendant did not search Plaintiff as part of a “routine inspection that is part of a periodic or area inspection plan.” Similarly, Plaintiff testified that he would frequently discover Defendant searching his property without any advance warning whatsoever; in other words, Defendant’s investigations were “conducted by surprise.”

Slip op. at 4-5 (citation omitted).

Zoning Can Regulate Use Of Property, Not Ownership

A noteworthy case from the North Carolina Court of Appeals about the limits of Euclidean zoning.  Although the decision was issued in March 2008, it seems no one else has posted on the case, so we will. 

In City of Wilmington v. Hill, 657 S.E.2d 670 (N.C. Ct. App. 2008), the court struck down a local ordinance that required the owner of a garage apartment to reside either in the main residence or the apartment.  When his permit to build a garage apartment was denied and he was cited for violation of the ordinance, the property owner asserted the owner-occupancy requirement was an unconstitutional regulation of his ownership of the property.

Relying on Graham Court Assoc. v. Town of Chapel Hill, 281 S.E.2d 418 (N.C. Ct. App. 1981), the court held that while the zoning power extends to regulating the use of property, it does not allow the government to control "the manner in which property is owned."  In that case, the court held that the government had no legitimate reason to deny a permit to convert an apartment complex from unitary ownership to condominiums in a zoning district where multi-family residential use was an allowable use, because "[t]he change in ownership from a single owner to multiple owners did not alter the property's character as to multi-family residential use." 

The Broadus court applied that rule to the owner-occupancy requirement for garage apartments, and held the requirement had "no foundation in reason and bears no substantial relation to the public health, the public morals, the public safety or the public welfare in its proper sense."  The court declined to follow Anderson v. Provo City Corp., 108 P.3d 701, 706 (Utah 2005) and  Kasper v. Town of Brookhaven, 142 A.D.2d 213, 220-21 (N.Y. 1988), which upheld owner-occupancy requirements from constitutional challenges.  The court noted these decisions are from other jurisdictions and it had no obligation to follow them, especially in light of the Graham Court rule:

In the instant case, the property in question is located in a district that is zoned for single-family residences; however, garage apartments are permitted as an accessory use, incidental and subordinate to the principal use as a single-family residence. See WLDC § 18-179 (2005). Garage apartments also are allowed in certain multi-family districts in connection with conforming single-family residences within the district. See WLDC § 18-285 (2005). Plaintiff only is entitled to regulate the use of defendant's single-family residence with the accessory use of a garage apartment, not the ownership.

(emphasis original).  Thanks to my Damon Key colleague Greg Kugle for sending this case my way.

Reply Brief in Ninth Circuit Maui Vacation Rental Appeal

Today we filed the Reply Brief (925kb pdf) in Maui Vacation Rental Association, Inc. v. County of Maui, No. 08-15251, the Ninth Circuit appeal from the Hawaii district court's dismissal of MVRA's complaint which sought to declare Maui's shut down of vacation rentals illegal.

I won't go into the details, since the Reply Brief spells out the arguments.  It responds to the arguments in the County of Maui's Answering Brief, posted here.  MVRA's Opening Brief, as well as links to media coverage of the case and issue, is posted here.

County of Maui's Brief in Ninth Circuit Vacation Rental Appeal

The County of Maui has filed its Answering Brief in Maui Vacation Rental Association, Inc. v. County of Maui, No. 08-15251, the Ninth Circuit appeal from the Hawaii district court's dismissal of MVRA's complaint which sought to declare Maui's shut down of vacation rentals illegal.

Our Opening Brief for MVRA is posted here, along with information about the issues in the case, which include what is necessary to plead a due process property interest, and what are elements of a claim for estoppel and vested rights under Hawaii law.

Opening Brief Filed in Ninth Circuit Maui Vacation Rental Appeal

Today we filed the Opening_Brief (250kb pdf) in Maui Vacation Rental Association, Inc. v. County of Maui, No. 08-15251, the Ninth Circuit appeal from the Hawaii district court's dismissal of MVRA's complaint which sought to declare Maui's shut down of vacation rentals illegal. 

I won't go into details of the case since the brief spells out the facts and arguments, but here are some prior posts on the case, and links to media coverage:

• Los Angeles Times: Maui: Vacation rentals and B&Bs shut down and 50 illegal Maui B&Bs & vacation rentals shut down

• San Francisco Chronicle: Maui County closes unlicensed bed and breakfasts and vacation rentals

• The Maui News: Vacation rental suit dismissed in federal court

• Honolulu Star-Bulletin: Maui B&Bs face 'crisis'

• inversecondemnation.com: Federal Court Dismisses Vacation Rental Due Process Claims -- Details (with links to the District Court's opinion, MVRA's complaint, and the briefs in the district court)

Order in Florida Short Term Rental Case

Here's the written order (1.8mb pdf) in Milo v. City of Venice, Case No. 2008 CA 552 SC (Mar. 17, 2008), the Florida case invalidating a municipality's restrictions on short term rentals that I posted earlier.  The case arose after the city's planning director determined that the local zoning ordinance restricted short term rentals in "residential" districts. 

The ruling is, of course, specific to Florida law, but there are two points worth noting:

• The court held that short term rental is not a "business" use.  "Indeed many rental properties, regardless of the duration of the rental term, are for profit ventures and could therefore be characterized as 'businesses.'"  Slip op. at 6.  The local code also permits temporary residences without limitation.

• Despite the rule that courts generally should defer to an agency's interpretation of regulations it administers, the court noted the rule that "[z]oning regulations are in derogation of private ownership rights and should be construed broadly in favor of property owners absent a clear intent to the contrary."  Slip op. at 5.  The court held that the municipality's failure to clearly define the term of tenancies in its code was fatal. 

Florida Court Invalidates Short Term Rental Restrictions

According to this report, a Florida state court has invalidated a municipality's attempt to regulate short-term rentals:

Milo [the property owner] bought more than a dozen homes on or near the island beginning in 2005 and started renting them out on a daily and weekly basis, something the city thought was addressed in -- and forbidden by -- its zoning ordinance.

[The court] didn't see it that way. In his seven-page decision, he said the city zoning code lacked key definitions and relied too heavily on state statutes -- statutes that weren't adequately referenced in its zoning code -- when making its case against Milo.

City officials thought they had a solid case, based on current code language and state rules that Planning and Zoning Director Tom Slaughter said in 2006 stipulate "the duration and frequency of rental of a single-family dwelling unit within the RSF (residential, single family) is restricted to not more than three rentals in a calendar year for periods of less than 30 days or one calendar month, whichever is less."

Download the complaint here.  Milo v. City of Venice, Case No. 2008 CA 552 SC (filed Jan. 11, 2008).