NCHBA fundamentally rewrites land-use laws

First enacted in 1923, North Carolina’s land-use laws have guided local government regulation of land-use and development approval for more than 80 years.  While these laws were periodically amended; surprisingly, they had never been systematically and thoroughly reviewed and updated.  That changed in the 2005 Session of the General Assembly.

Early in the 2005 Session, two bills immediately captured the critical attention of the North Carolina Home Builders Association (NCHBA) – S 518 (City/County Planning Clarification) and S 814 (Modernize City/County Planning) – both introduced by Sen. Daniel Clodfelter (D-Mecklenburg).  Experience has taught that the words “clarification” and “modernize” in the title of legislation are usually causes for concern, and these bills, as introduced, were certainly no exception.  In fact, the original versions were a government planner’s “wish list”.  Written largely by the North Carolina Chapter of the American Planning Association with assistance from the Institute of Government at UNC-Chapel Hill, the bills, as introduced, would have significantly expanded local government authority to impose new development restrictions and fees.

NCHBA immediately recognized the danger of the original bills.  Instead of merely opposing them, however, NCHBA developed a strategy to take advantage of the opportunity that they presented to enact changes to the law beneficial to the development industry.

Working closely with the bills’ sponsor, NCHBA was able to incorporate dozens of changes to the bills and rewrite whole sections, including those dealing with development moratoria, sale of lots in pre-approved subdivisions, and development agreements, to suit the needs of builders and developers.  After dozens of hours of intense negotiations resulting in more than 50 different versions of the bills, NCHBA emerged at the end of the 2005 Session with bills that fundamentally rewrite much of North Carolina’s land-use planning and management laws.

The contrast between the bills as introduced and as enacted could not be sharper.  Instead of an unlimited expansion of the authority of local governments, the bills curtail that authority or impose significant obligations that local governments must satisfy before using new authorities, e.g. imposition of moratoria on development approvals.  Instead of new authorities to impose fees, the bills specifically prohibit the imposition of new fees as a part of development agreements not already authorized by otherwise applicable law.  Instead of limiting development agreements to ten years, the bills provide for development agreements of up to 20 years.  All in all, the bills as enacted strike a much needed balance between providing local governments with the authority to provide necessary services while eliminating unnecessary roadblocks to development approvals and preserving private property rights.

Among the beneficial aspects of these bills are these provisions:

General

• Local governments will have to approve or deny preliminary or final plats “only on the basis of standards explicitly set forth in the subdivision or unified development ordinance” (emphasis added).  This provision goes on to provide that “(w)henever the ordinance includes criteria for decision that require application of judgment, those criteria must provide adequate guiding standards for the entity charged with plat approval.”

• The application of protest petitions will be limited to zoning map amendments – not to text changes – and valid protest petitions will have to be signed by at least 20% of the owners of property within the affected area or five percent of the owners of a 100-foot buffer surrounding the entire parcel.

• Local government subdivision ordinances requiring performance guarantees will have to provide a range of options, including but not limited to surety bonds and letters of credit, and the developer gets to choose type of performance guarantee provided.

• Property owners or their agents will now be able to legally enter into contracts to sell or lease plats prior to final approval and recordation of the subdivision.

Moratoria

• Local governments will be able to impose temporary moratoria on development approvals (after public notice and hearing, except in cases of an imminent threat to public health or safety), but any ordinance imposing such a moratorium will have to include:

“(1)  A clear statement of the problems or conditions necessitating the moratorium and what courses of action, alternative to a moratorium, were considered by the city and why those alternative courses of action were not deemed adequate.

(2)       A clear statement of the development approvals subject to the moratorium and how a moratorium on those approvals will address the problems or conditions leading to imposition of the moratorium.

(3)       An express date for termination of the moratorium and a statement setting forth why that duration is reasonably necessary to address the problems or conditions leading to imposition of the moratorium.

(4)       A clear statement of the actions, and the schedule for those actions, proposed to be taken by the city during the duration of the moratorium to address the problems or conditions leading to imposition of the moratorium.”

• Any project for which a valid building permit has been issued, for which a conditional use permit application or special use permit application has been accepted, any development set forth in an approved site-specific or phased development plan, any development for which substantial expenditures have already been made in good faith reliance on a prior valid administrative or quasi-judicial permit or approval, and any final subdivision plats that have been accepted for review prior to the call for a public hearing to adopt the moratorium are exempted from the moratorium.

• Any preliminary subdivision plat accepted for review prior to the call for public hearing, if subsequently approved, will be allowed to proceed to final plat approval without being subject to the moratorium.

• No moratorium can be extended or renewed unless the local government has taken “all reasonable and feasible steps proposed to be taken by the (local government) in its ordinance establishing the moratorium to address the problems or conditions leading to the imposition of the moratorium” unless new facts or conditions warrant such extension.

• Persons aggrieved by the moratorium will be allowed to seek a court injunction of the moratorium in expedited proceedings, and the local government imposing the moratorium has the burden of proof in such proceedings to show compliance with the procedural aspects of the law.

Zoning/Rezoning

• Conditions applicable to special use districts, conditional use districts, or conditional districts will be allowed to be imposed on property placed in such districts only if mutually approved by the local government and the petitioner.

• Conditions and site-specific standards imposed in a conditional district shall be limited to those that address the conformance of the development and use of the site to the local government’s ordinances and an officially adopted comprehensive or other plan and to those that address the impacts reasonably expected to be generated by the development or use of the site.

• A statement analyzing the reasonableness of a proposed rezoning must be prepared for each petition for a rezoning to a special or conditional use district or conditional district or other small-scale rezoning.

• Prior to adopting or rejecting any zoning amendment, the governing board must adopt a statement describing whether its action is consistent with an adopted comprehensive plan and explaining why the board considers the action taken to be reasonable and in the public interest.

• Comments by the planning board that a proposed amendment is inconsistent with the comprehensive plan does not preclude consideration or approval of the proposed amendment by the governing board.

Infrastructure Reimbursement Agreements

• Cities and counties will now be able to enter into reimbursement agreements with private developers and property owners for the design and construction of infrastructure that is included on the jurisdiction’s Capital Improvement Plan and serves the developer or property owner. 

Development Agreements

• Cities and counties will also be able to enter into “development agreements” with developers, but the local government “may not exercise any authority or make any commitment not authorized by general or local act and may not impose any tax or fee not authorized by otherwise applicable law.” 

• Development agreements are available for properties of 25 or more developable acres and may extend for a period of up to 20 years. 

• Only those ordinances in effect at the time of execution of the agreement may be applied to the property, and a local government may not apply subsequently adopted ordinances or policies to the development that is subject to a development agreement.

Comprehensive land-use management and planning is important to the economy and quality of life in North Carolina, but there has long been a need to remove the ambiguities of the State’s statutes governing land development and to protect private land owners from the sometimes abusive tactics of local governments attempting to impose unauthorized restrictions on land development.  S 518 and S 814 seek to provide those remedies, and NCHBA applauds Sen. Clodfelter for his dedicated efforts to that end.