David Owens
Institute of Government
The University of North Carolina
at Chapel Hill
The Institute of Government will publish its usual bulletin summarizing all planning related legislative activity by the 2005 General Assembly later this year. In the interim, this memo briefly summarizes the key provisions in two major bills affecting planning and development regulation—S.L. 2005-418 (S. 518), An Act to Clarify and Make Technical Changes to City and County Planning Statutes, and S.L. 2005-426 (S. 814), An Act to Modernize and Simplify City and County Planning and Land-Use Management Statutes. Both bills received final legislative approval on August 24, 2005 and were signed into law by Governor Easley on September 22, 2005. The bills generally become effective January 1, 2006. The exception is that the amendments relative to development moratoria become effective for moratoria adopted or extended after September 1, 2005.
This discussion is organized by the changes made by both bills in particular areas—general provisions, zoning, subdivision regulation, infrastructure agreements, and development agreements. Unless otherwise noted both of these bills amend the laws for both cities and counties. The general format used in both bills is for subsection (a) of each section to amend laws in G.S. 160A affecting municipalities and subsection (b) to amend the comparable law for counties in G.S. 153A.
Throughout the statutes the bill modernizes the references to “planning agency” in the statutes to reflect the change in terms to “planning boards.” Both bills also have provisions that provide that they do not override previously adopted local legislation on these matters.
Unified development ordinances. Section 1 of S. 518 revises G.S. 160A-363 and G.S. 153A-322 to specifically allow cities and counties to combine various planning and development ordinances into a single ordinance. An increasingly common way of accomplishing this is to merge zoning, subdivision, and other development regulations into a single unified development ordinance. Some local governments have felt local legislation is necessary to allow this; others have been uncertain whether tools and institutions used under one authority could be used in a different context. This clarification recognizes internal coordination and simplification efforts. It allows a single set of definitions, organizational structure, and procedures to be used for any and all development ordinances unless there is a specific restriction of authority. The ordinances that may be combined under this authority are those authorized by the Articles of G.S. 160A and 153A related to planning and development regulation. It does not include separate ordinances adopted under the general ordinance-making authority (noise ordinances, nuisance lot ordinances, junk car ordinances, etc.). Other amendments in both bills include reference to unified development ordinances in the zoning and subdivision statutes.
Hearing notices for rezonings. Local governments are now required to do an on-site posting of the notice of hearings on all zoning map amendments. Section 4 of S. 518 creates G.S. 160A-384(c) and G.S. 153A-343(c) to require that site posting be used to notify persons of hearings on rezonings. The county exemption for mailed notice of zoning map amendments that initially zone a parcel is repealed (there was no comparable city exemption). This section of the bill also amends 160A-384(b) and G.S. 153A-343(b) to simplify the alternate notice provision for large-scale rezonings (those affecting more than 50 properties) by requiring the half-page newspaper advertisement to be published twice rather than four times.
Protest petitions. Section 5 of S. 518 substantially revises the definition of a qualifying area for a zoning protest petition in G.S. 160A-385. It simplifies the definition of a qualifying area for a protest so that it is 5% of the land included within a 100-foot wide buffer around each separate area proposed to be rezoned (rather than 20% of any one of four sides). Street rights-of-way are not considered for the 100-foot buffer unless the right-of-way has a width greater than 100 feet. Given that many rezonings are of irregularly shaped parcels, this will significantly simplify application of the protest calculation. This section also changes the law to provide that when less than an entire parcel is proposed to be rezoned, the qualifying buffer is measured from the property line rather than the zoning district boundary. It provides that the three-fourths majority required if there is a qualified protest is calculated on the basis of the number of council members eligible to vote on the matter (excluding vacancies and those who have a financial conflict of interest and are prohibited by law from voting on the matter). It also simplifies the protest provision by limiting its application to zoning map amendments. The amendment also adds references to the increasingly common practice of conditional zoning and treats protests regarding amendments of these in the same manner as the previously provided for conditional use district and special use district zoning. There is no comparable county statute on protest petitions. The bill as introduced authorized optional county protest petitions; the bill as passed deletes that authorization. Section 6 of S. 518 amends G.S. 160A-386 to clarify that a person filing a protest against a proposed zoning amendment may withdraw the protest any time prior to a vote on the rezoning.
Comprehensive plan. Several sections of these bills strengthen the role of the comprehensive plan and any other officially adopted plan (such as a small area plan, a corridor plan, or a transportation plan). Section 7 of S. 814 amends G.S. 160A-383 and G.S. 153A-341 to require that planning board review of zoning amendments include written comments on the consistency of the proposed amendment with the comprehensive plan and any other relevant plans that have been adopted by the governing board. The amendment provides that a statement from the planning board that the proposed amendment is inconsistent with a plan does not preclude the governing board from adoption of the amendment. This governing board is then required to adopt a statement on plan consistency before adopting or rejecting any zoning amendment. This statement must also explain why the board believes the action taken is reasonable and in the public interest. The statement adopted by the governing board on plan consistency is not subject to judicial review. Section 7 of S. 518 amends G.S. 160A-387 and G.S. 153A-344 to clarify that planning board recommendations are required prior to initial adoption of zoning. It mandates referral of proposed zoning amendments to the planning board for review and comment (this was previously mandated for counties, but not for cities, though virtually all city zoning ordinances already in practice provide for such review). It allows the governing board to proceed with consideration of the amendment if no comments are made within 30 days of referral and specifies that the planning board recommendations are not binding on the governing board.
Conflicts of interest. For legislative and advisory decisions, Section 5 of S. 814 creates G.S. 160A-381(d) and G.S. 340(g) to codify existing law prohibiting financial conflicts of interest on zoning amendments. Members are not to vote on ordinances (or recommendations) if they have a direct, substantial, readily-identified financial interest in the outcome of the decision. It also applies that same rule to planning board advisory recommendations on zoning text and map amendments. For quasi-judicial decisions, Section 8 of S. 518 amends G.S. 160A-388 and 153A-345 to create a new subsection (e1) to codify existing case law on the constitutional limitation requiring impartial board members for quasi-judicial decision-making (and applies this same rule to any board exercising the functions of a board of adjustment). Members must not participate in or vote on any matter where they have a fixed opinion on the case prior to the hearing, they have undisclosed ex parte communications, have close family, business, or associational ties with an affected person, or have a financial interest in the outcome of the case.
Moratoria.
Section 5 of S. 814 creates G. S. 160A-381(e)
and G.S. 340(h) to explicitly recognize the authority of cities and counties to adopt
temporary moratoria of reasonable duration (now generally assumed to be an
implied power) and codifies the constitutional limitations on the use of
moratoria. It requires cities and counties at the time of adoption of a
moratorium to expressly state the reasons for the moratorium and why other
alternative actions are deemed to be inadequate, its scope and duration, and
set forth an action plan to address the issues that led to its imposition. It
specifies that temporary moratoria of 60 days duration or less may be adopted
with a public hearing that has one notice published seven days in advance (unless
there is an imminent and substantial threat to public health and safety, in
which case a hearing is not required). Longer moratoria (and extensions beyond
60 days) require the same notice and hearing as routine land use ordinance
amendments. Moratoria may be renewed or extended only if the government has
taken all reasonable and feasible steps to address the problem leading to the
moratorium and if new facts and conditions warrant an extension. Unless there
is an imminent threat to public health and safety, moratoria do not apply to
projects that have already received a vested right under current law; nor do
they apply to preliminary or final plats or to special and conditional use
permit applications that have been accepted for review prior to the call for a
hearing on the moratorium. Provision is also made for expedited judicial review
and the government has the burden of showing compliance with the procedural
requirements of the statute in such challenges.
Conditional zoning. Section 6 of S. 814 amends G.S. 160A-382 and G.S. 153A-342 to incorporate reference to the conditional zoning technique now approved by the courts (the conditional zoning is entirely legislative, as opposed to the conditional use district zone (also still allowed) that also includes a required concurrent conditional use permit). It clarifies that specific conditions imposed in conditional zoning and for special and conditional use district zones may be proposed by the owner or the city and its agencies, but only those mutually approved by the owner and government may be put into the regulations and permits. It limits conditions and site-specific standards to those that address conformance of the development and use of the site to ordinances and officially adopted plans and those that address the impacts reasonably expected to be generated by the development and use of the site.
Spot zoning. Section 6 of S. 814 amends G.S. 160A-382 and G.S. 153A-342 to codify the existing court mandated analysis of the reasonableness of small-scale rezonings. It requires a statement analyzing the reasonableness of the proposed rezoning be prepared as part of all rezonings to special/conditional use districts, conditional zonings, and other small-scale zonings. The statute does not specify who must prepare this statement or when it is required, thus leaving some flexibility to local governments in this regard. For example, the petitioner for a rezoning could be required to address this issue as part of the application process, it could be prepared by staff for presentation at the hearing, or it could be addressed by the planning board (or any combination of these).
Special and conditional use permits. Section 5 of S. 814 amends G.S. 160A-381(c) and G.S. 340(c1) to clarify that planning boards may be authorized to issue special and conditional use permits (as opposed to having to use the BOA authority). It confirms that governing boards and planning boards must follow quasi-judicial procedures when acting on special and conditional use permits and provides that both planning boards and governing boards need only a simple majority (not a 4/5 vote) to approve these. It provides that vacant seats and disqualified members are not counted in computing required majority votes. It simplifies the law by replacing detailed provisions on appeals of these special and conditional use permits with a simpler cross-reference to an existing statute that already has those details.
Variances. Section 5 of S. 814 amends G.S. 160A-381(b1) and G.S. 340(c) to codify current law that use variances are impermissible (as changes in permitted uses must be addressed by ordinance amendment rather that by variance). Section 8 of S. 518 makes this same amendment to G.S. 160A-388(d) and 153A-345(d). It also provides that any conditions imposed on a variance be related to the variance standards.
Board of adjustment. Section 8 of S. 518 makes several amendments to G.S. 160A-388 and 153A-345 regarding board of adjustment procedures. The revision to subsection (a) clarifies that alternate members of a BOA may serve either temporarily (as when a member is disqualified from participation on an individual case due to a conflict of interest) or to fill a vacancy, as well as serving for an absent member. The revision to subsection (c) clarifies that the term “special exception” is limited to modest, non-use related modifications and that this authority includes provisions for special and conditional use permits (as is now commonly assumed). The amendments to subsection (e) clarify that the size of the board for purposes of calculating the requisite four-fifths vote is reduced by vacancies and members who are disqualified from voting if there are not alternate members available. The county provision also adds a new subsection (g) to give county boards of adjustment the same subpoena power that now exists for cities.
General. Section 2 of S. 518 revises G.S. 160A-371 and 153A-330 to add reference to sketch plans and preliminary plats, which are now commonly used in addition to final plats. It also confirms that different review procedures can be established for different classes of plats (e.g., distinguishing major and minor subdivisions) and that the subdivision ordinance can be consolidated into a unified development ordinance. This amendment also codifies existing case law that only those standards explicitly set forth in the ordinance as criteria for decision may be used in making individual plat approval decisions and requires that if a subdivision ordinance uses standards for approval that require judgment, the ordinance must provide adequate guiding standards (as is the case with special and conditional use permits).
One lot out. Section 4 of S. 814 revises the definition of a “subdivision” in G.S. 160A-376 and G.S. 153A- 335 to clarify that the creation of a single new lot or parcel may be considered a subdivision. It also explicitly notes that a local government may provide for expedited review of specified classes of subdivisions.
Authorization for plat approval by staff. Section 3 of S. 518 amends G.S. 160A-373 and 153A-332 to clarify that decisions on preliminary and final plats may be assigned to technical review committees. It also allows delegation of review and approval of plats to a designated staff person. This would allow, for example, an expedited review of a designated class of subdivisions (e.g., minor plats for intrafamily transfers) to be handled by staff.
Performance guarantees. Section 2 of S. 814 revises G.S. 160A-372(a) and G.S. 153A-331(a) in several ways. It updates the reference to coordination of “streets and highways” to the more contemporary coordination of “transportation networks and utilities” and clarifies that the regulations must “substantially promote” (rather than be “essential to”) the public health, safety, and welfare. It revises G.S. 160A-372(c) and G.S. 153A-331(c) to modernize the language allowing performance guarantees. It provides that the ordinance is to provide a range of types of performance guarantees from which developers may choose for individual plats.
Enforcement. Section 3 of S. 814 amends G.S. 160A-375 and G.S. 153A-334 to extend the same routine enforcement options available for zoning enforcement (including denial of building permits) to subdivision ordinance enforcement (as opposed to limiting enforcement to criminal citations and injunctive relief under the current statute).
Presale contracts. Section 3 of S. 814 creates a new subsection (b) of G.S. 160A-375 and G.S. 153A-334 to allow use of pre-sale and pre-lease contracts to obtain development financing for subdivisions that have received preliminary plat approval but have not yet had final plats approved and recorded. The section provides detailed requirements for these contracts, specifying notices that must be provided to prospective buyers and grounds for cancellation of the contract. The prospective buyer must receive a copy of the preliminary plat at the time of contracting and must receive a copy of the final plat prior to closing. The prospective buyer must be clearly notified that final plat approval has not yet been secured, that approval is not guaranteed, and that the contract may be terminated if the final plat is materially different from the preliminary plat. This amendment also allows contracts to sell lots to the developers of those lots after the preliminary plat is approved but before final plat approval. The final conveyance may not take place until after the final plat is approved and recorded.
IV. Development Agreements
Section 9 of S.
814 creates a new tool for public-private cooperation in North Carolina. A
number of states allow cities and counties to enter into development
agreements. Among the states with these statutes are Arizona, California,
Colorado, Florida, Hawaii, Idaho, Louisiana, Maryland, Nevada, New Jersey,
Oregon, South Carolina, Virginia, and Washington. This section incorporates a version of the South Carolina development
agreement statute into the North Carolina statutes as G.S. 160A-400.20 to
160A-400.32 and 153A-379.1 to 153A-379.13.
The use of
development agreements is optional for cities and counties. If used, each
agreement must be adopted as an ordinance by the governing board (with the same
standard notice and hearing required for zoning amendments). The agreement cannot
impose any tax or fee not otherwise authorized by law. The minimum land size to
be included is set at 25 developable acres (exclusive of wetlands, mandatory
buffers, unbuildable slopes, and other areas precluded from development) and
the maximum term is set at 20 years. The contents of the agreement are
specified, including a clear identification of the exact land involved, the
duration of the agreement, a description of the uses of the property, the
population density, and building types, intensities, placement, and design. It
must also include a description of any new public facilities that will serve
the development, who will provide them, and when they will be provided. It must
also include a list of all local regulatory approvals required, any conditions
need to protect the public health, safety, and welfare, and any provisions for
preservation and restoration of historic structures. Provisions are made for
amendment, extension, and cancellation of the agreement. The development
agreement must be consistent with the local laws in effect at the time of
agreement approval. The ordinances in effect at the time of the agreement
generally are to remain in effect for the life of the agreement, with specified
exceptions (such as changes in state and federal laws affecting the
development). The agreement must be recorded and is binding on subsequent
purchasers of the land.
Section 8 of S. 814 provides statewide authority for
cities and counties to adopt infrastructure agreements with developers. These
are agreements where developers construct infrastructure that serves the
development but that is beyond the regulatory requirements of the city or
county. The developer is then reimbursed by the government for these extra
expenses. These sections are similar to previously adopted local legislation
that authorized these agreements for several cities and counties. Several
different mechanisms for these agreements were created.
First, G.S. 160A-499 and 153A-451 are created to
allow agreements for a variety of infrastructure purposes. To use this
authority, the infrastructure needs must be included within the government’s
capital improvement plan and developer must solicit bids for the work if that
work would have been subject to the competitive bidding requirements if done
directly by the government.
Second, it creates G.S. 160A-320 and 153A-280 to
allow such agreements for public enterprise improvements that are adjacent or
ancillary to a private land development project, up to a cost of $250,000.
Based on the initial experience with similar provisions in local bills, these
statutory provisions may well be the most widely used vehicle to allow these
agreements. Bidding by the private developer is not required, but in order to
use this tool the government must find that the cost of securing the
improvements would be less than if done directly by the government or through a
public contract.
Third, G.S. 160A-309 is created to allow cities to
enter into similar agreements on intersection and roadway improvements up to a
cost of $250,000.