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              Resources | Legal Summaries

              Land-Use and Development Moratoria

              David W. Owens
              January, 1997
              Legal topic(s)
              Summary: 

              One morning members of a county's board of commissioners began receiving calls from concerned citizens about a large, new rock quarry and stone-processing business that had just been announced for a residential area of their rural township. The citizens were concerned about noise, traffic, environmental effects, and potential negative impacts on their property values. The commissioners were sympathetic, but the county did not have zoning or other development regulations in place, and the proposed project was moving quickly.

              In a neighboring small town, the zoning administrator was being besieged with calls from downtown merchants concerned about a video arcade being installed in an abandoned building. They wanted to know if the town was going to allow this on a site they believed had inadequate parking, and they expressed considerable doubts about the wisdom of allowing such a use to be located downtown. The zoning administrator had to tell them that the town's twenty-year-old zoning ordinance did not address these concerns.

              And in the county seat, the city planning department received preliminary plats for four large subdivisions and a rezoning application for a new industrial concern and small shopping center. The jobs and extra housing these projects would bring would be welcome additions to the city, but there were concerns that this influx of development might overwhelm the capacity of the city's water and sewer system. Furthermore all of this development was being proposed for a part of the city where a major update of the land-use plan had recently been initiated. In response to the concerns raised by neighborhood groups about traffic, preservation of open space, and increasing commercial intrusions in residential areas, the planning board had concluded that the existing plan and zoning for this area were obsolete. Based on this recommendation the city council directed the planning department to initiate a major update of the land-use plan for this area, a process that would take six months to complete. The publicity about these impending changes in the plan and zoning ordinances no doubt was a key factor in the timing of the development applications, as several applicants told the planner that they had hastily put proposals together in order to beat any more restrictive standards that might be coming.

              In all three instances, the local government involved would like to consider putting a temporary hold on the proposed developments while they get their plans, ordinances, and public facilities straightened out. What planning tools are available to accomplish this? Do North Carolina localities have the authority to use them? If so, what procedures must be followed and what limitations must be observed?

              The answers to these questions are not entirely clear, because neither the North Carolina courts nor the legislature have directly addressed the matter. This article provides the background that should be considered by a local government contemplating a development moratorium.

              Interim Zoning Ordinances

              One approach a local government can take to temporarily preserve the status quo while longer term solutions are devised is to adopt an interim zoning ordinance. An interim zoning ordinance, sometimes called a stop-gap ordinance, is an ordinance that typically allows existing land uses to continue or expand and similar uses to be established. But it maintains the status quo by not allowing different uses to be established while a more detailed permanent zoning ordinance is being developed. Interim zoning differs from regular zoning in that it is adopted quickly, is not based on the thorough studies that underlie regular zoning, and is intended only to temporarily preserve current land uses, not designate areas suitable for long-term future development. Interim zoning is usually adopted where there was no previous zoning.

              Where zoning is already in place, portions of the city or county may be placed in temporary holding zones (such as allowing agriculture and large-lot residential use only) while the appropriate long-term zoning classifications are developed. Similarly, the text of a zoning ordinance may be amended to temporarily restrict certain uses in some or all of the city or county. Again, the feature that distinguishes this approach from regular zoning is the intended temporary nature of the restriction.

              Some states allow interim zoning ordinances to be adopted without going through the detailed public notice and other procedures required to adopt regular zoning ordinances. This is not the case in North Carolina. Despite their differing intent and purpose, interim and regular zoning are not legally different in North Carolina. The North Carolina Supreme Court has ruled that even zoning ordinances intended to be temporary in nature must follow all of the statutorily required procedures for zoning to be valid. An example was an attempt by the town of Waynesville in 1936 to prohibit the erection of a gasoline filling station on Main Street. An oil company leased a lot and obtained a building permit for the station. But before construction started, the town hastily passed a "zoning" ordinance that created one interim zone, which happened to consist only of the block that included this lot, and prohibited one use in that zone, not coincidentally filling stations. The supreme court in Shuford v. Town of Waynesville[1] ruled that because the required zoning ordinance adoption procedures set by state law were not followed--there had been no public hearing, no comprehensive plan prepared, no planning board or board of adjustment established--the interim ordinance was not a valid zoning ordinance.

              An interim zoning ordinance can be adopted in North Carolina, but it must follow all the requirements for a regular zoning ordinance. This includes establishing a planning board, publishing two notices of a public hearing in successive weeks, and applying the ordinance comprehensively. Also if the interim ordinance is to automatically expire at a fixed date in the future, that fact needs to be included in the draft ordinance and public notice, as repeal of a zoning ordinance must follow all the same procedures as adoption or amendment.[2] Given the time required to draft such an ordinance, provide for appointment of a planning board and their review of the draft, provide the required public notice, and hold the mandated hearing, it is unlikely that a new interim zoning ordinance could be adopted by a North Carolina city or county in less than two to three months. An interim amendment to an existing ordinance could be adopted more quickly, as the planning board would already be in place. But even in this situation the public notice and hearing requirements for zoning amendments must be met, a process that takes several weeks.

              Moratoria

              Given the time required to adopt an interim zoning ordinance or amend an existing ordinance, local governments occasionally want to take more immediate action to put a hold on proposed projects or maintain the status quo while new regulations are being considered or new public improvements are put into place. Final decisions on major land-use policies should not be made hastily. The complexity of the issues, their controversial nature, the time required to conduct adequate studies and prepare plans, and the need to allow broad public participation in the debate mean that a careful and deliberate course often needs to be followed by the local government. Yet there may well be a need to keep problems from worsening during this period of consideration. The most frequently discussed means of securing this "breathing space" is adoption of an ordinance establishing a moratorium on certain approvals, or adoption of a resolution directing the local government's staff to cease processing applications for certain approvals. In North Carolina this has included moratoria on subdivision approvals, rezonings, building permits, and water and sewer hookups or extensions.

              In determining whether these development moratoria are legal in North Carolina, two questions must be resolved. First, is there adequate statutory authority to enact moratoria? Second, do moratoria violate landowners' constitutional or other legally protected rights?

              Statutory Authority

              The state has the authority to exercise its police powers to protect the public health, safety, and welfare. In addition to specific authority for land-use regulation and the provision of public services, general police powers have been delegated by the state to cities and counties:

              A city may by ordinance define, prohibit, regulate, or abate acts, omissions, or conditions, detrimental to the health, safety, or welfare of its citizens and the peace and dignity of the city, and may define and abate nuisances.[3]

              Local governments also have been delegated the authority to regulate businesses and prohibit those that are nuisances or that may be inimical to the public health, welfare, safety, order, or convenience.

              In addition to this general police power, several statutes give local governments specific land-use and development regulatory authority. The zoning enabling acts grant cities and counties authority to regulate and restrict density of population and the location and use of land and buildings. Within zoning districts they may regulate and restrict the erection, construction, reconstruction, alteration, repair, and use of buildings and land for a variety of purposes, including preventing overcrowding, facilitating the adequate provision of public services, and promoting health, safety, and welfare. The subdivision statutes authorize regulations to provide for the orderly growth and development of cities and counties. Other more specific statutes authorize regulation of floodways, water supply watersheds, airport areas, places of amusement, and public health nuisances. The statutes are silent, however, as to local governments' specific authority to adopt development moratoria.

              The question then is whether these grants of authority to regulate and prohibit certain activities to protect the public health, safety, and welfare include the authority to adopt moratoria. For discretionary acts of the governing board, such as rezonings, they clearly do. A governing board is under no obligation to change its zoning, and it can withhold that approval as its sound judgment dictates. A moratorium on rezonings can be established by the governing board's refusal to adopt amendments to an existing, valid zoning ordinance. For nonregulatory matters, such as decisions on the extension of utility services or hookups to water and sewer systems, local governments can impose reasonable restrictions when necessary to respond to problems such as a lack of treatment capacity. For example, recently the city of Jacksonville successfully defended in the federal courts a moratorium on multi-family sewer hookups imposed due to a lack of wastewater treatment capacity.[4]

              Authority to impose moratoria on the approval of existing required development permits--temporarily suspending regulatory approvals such as building permits or plat approvals--is less certain. The main reason for this uncertainty is the standard that is used to interpret delegation of state authority to local governments. If the traditional rule of strict interpretation is applied, a court would have to determine whether the power to adopt a moratorium is implied either in the general grants of power discussed above or the land-use enabling statutes, as North Carolina's statutes do not explicitly delegate the authority to adopt moratoria. While a substantial majority of courts considering this question in other states have ruled that such power is implied, several have ruled that it is not.[5]

              Considering the legislative mandate adopted by the North Carolina General Assembly in 1971 that local governments' powers are to be broadly construed to include supplementary powers that are expedient to carrying out expressly granted powers, it is likely that North Carolina's courts will hold that cities and counties do have the authority to adopt reasonably limited development moratoria. Because local governments have been granted both general authority to prohibit acts detrimental to the public welfare and specific authority to regulate land use, supplementary authority for development moratoria is an expedient, and occasionally necessary, power. This conclusion is buttressed by the fact that the North Carolina Supreme Court has long granted considerable leeway to legislative determinations as to how delegated powers are carried out.[6] This judicial deference should extend to a city or county governing board's reasonable determination that a moratorium is needed to protect the public health and safety. Even so, a solid connection needs to be established linking the need for a moratorium to the specific or general powers of local government to regulate land use and development.

              For example, there may be a need to temporarily prevent new land uses that would create public health and safety problems due to a lack of water, sewer, transportation, waste disposal, schools, or other necessary public services.[7] There may be situations where a moratorium is needed to address an unanticipated threat to the most appropriate use of land in the city[8] or county, or to prevent the establishment of land uses that would be inconsistent with pending zoning,[9] historic preservation,[10] or watershed protection measures.

              It may be important for a local government to carefully specify whether it is relying on the general police power or the zoning enabling act for its statutory authority for a moratorium. This is important because there are different procedural requirements that may have to be met depending upon which choice of underlying authority is used. Courts in some states have required all mandatory notice and procedural requirements for zoning ordinances to be followed if zoning rather than the general police power is used as the underlying statutory authorization for moratoria. If the North Carolina courts were to take this tack, the degree of the urgency of the problem generating the need for a moratorium is likely to be the key factor to be considered in choosing which statutory authority should be used. For those problems that present a substantial threat to the public health, safety, or welfare, the more expedited procedures for general police power ordinances are warranted. Where the problem is more routine, the basic land-use authority and procedures are appropriate.

              Constitutional and Other Limitations

              In those situations where a local government has the statutory authority to impose a moratorium, care must be taken to exercise that authority in a constitutionally sound manner. There are two key provisions in the state constitution that require moratoria to be carefully limited. Article 1, Section 1, provides that citizens have the inalienable right to the enjoyment of the fruits of their own labor, and Article 1, Section 19, provides that no person shall be deprived of their property but by the law of the land. In interpreting these provisions the supreme court has ruled that restrictions on businesses and property use are valid only if they are (1) established for a purpose falling within the scope of the police power and (2) actually and reasonably adapted to accomplish that legitimate purpose. To meet this standard a moratorium must have a rational, real, or substantial relation to one or more of the purposes for which the police power is exercised and must not be unreasonable or oppressive in its operation.[11] Therefore a moratorium should be based on a clearly documented need and should have a carefully limited duration that is based on the time it takes to address the reasons for its imposition. Also the moratorium should be neither overly nor underly broad; it should address all of the land uses that generated the need for the moratorium but no others.[12]

              A related question that bears on the reasonableness of a moratorium is the extent to which lawful businesses can be subject to moratoria. One older North Carolina case held that a general ordinance may not permanently prohibit a lawful use throughout a city.[13] Because moratoria adopted under the general police power ordinances must apply uniformly throughout the jurisdiction and should apply equally to existing and future uses, this holding emphasizes the importance of a limited duration for a moratorium. Failure to observe this limitation resulted in the attempted gas station moratorium in the Shuford case being ruled invalid.

              Another limitation on moratoria is the extent to which they can be applied to projects that are already underway. Once a project has received a building permit or substantial expenditures have been made in good faith reliance on a valid governmental approval, that project can generally be completed as approved. Also the 1990 General Assembly adopted legislation, effective October 1, 1991, that will allow landowners to submit development plans that, if approved by the local government, will lock in the existing zoning regulations on the type and intensity of land uses for up to five years. An exception to these rules on vested rights is present if there is a strong public interest in having the proposed development comply with the newly adopted ordinance. For example, a Winston (now Winston-Salem) ordinance adopted to protect the public health and safety by prohibiting wooden buildings in the congested central part of town was upheld by the state supreme court in 1894 even though it caused suspension of previously contracted work.[14]

              Finally, a question arises as to whether moratoria constitute an impermissible taking of property without compensation. The takings clause of the United States Constitution has been interpreted to mean that if a regulation is found to be an unconstitutional taking, even temporarily, compensation must be paid to the landowner. The United States Supreme Court has ruled that this does not apply to normal delays in obtaining building permits, variances, or amendments to zoning ordinances. Whether a moratorium of reasonably limited duration is a "normal delay" is an open question. Courts in other states recently have held that moratoria ranging from six to eighteen months while plans were being prepared were not unconstitutional takings.[15] In any event, a moratorium adopted to prevent either a serious public safety problem or the establishment of a noxious use is not a taking.

              Conclusions

              It is likely that North Carolina local governments have the statutory authority to impose temporary development moratoria, though a firm conclusion on this question must await legislation or litigation. This can be done as an interim zoning ordinance if the full statutory procedures for zoning are followed. A moratorium also can be adopted by ordinance as a general police power regulation if it is needed for the protection of the public health, safety, or welfare.

              It is important for a local government considering a moratorium to carefully tailor it to address the particular problem at hand in order for the action to be reasonable. Care should be exercised in determining the urgency of the need, with use of a moratorium limited to those situations where there is a pressing public need for action that cannot be reasonably addressed in any other way. Moratoria should not be used to address routine land-use issues, as normal zoning and related land-use tools can adequately handle such issues.

              A moratorium should have an explicitly limited duration, with its length being reasonably related to the time it is expected to take the local government to address the problem that led to adoption of the moratorium. For example, it would be unreasonable to have a two-year moratorium when its purpose is to maintain the status quo for six months while a plan and rezoning are considered. However, if it will take an estimated two years to plan and construct a necessary wastewater treatment plant expansion, it would be reasonable to have a two-year moratorium on sewer hookups. The notion of an explicitly limited duration of moratoria has been a critical factor in a number of court decisions upholding moratoria, as the courts have been willing to sanction temporary restrictions imposed in response to urgent needs that would not be allowed as permanent measures.

              An ordinance establishing a moratorium should be as specific as is possible as to its cause, duration, geographic coverage, and subject matter coverage. There should be no vagueness as to what is being regulated. For example, it should be clear whether a moratorium applies to new land uses only or also to expansions or replacement of existing uses.

              Lastly, it is important that action be initiated to address the problem leading to the moratorium. The moratorium itself cannot be the answer or solution. It should only be used as a good faith means of providing the time for a reasonable long-term solution--be it new plans, ordinances, or public improvements--to be developed and put into place.

              The three situations cited at the beginning of this article illustrate the importance of carefully considering these factors before imposing a moratorium. In all three instances, zoning and other land-use ordinances could be adopted or amended on an interim basis to address the concerns while more permanent solutions are devised. But the full statutory process must be followed and that takes time. A moratorium may or may not be warranted in the three cases to hold the line while this is done.

              In the rock quarry situation, the potential impacts on traffic, environmental quality, property values, and the character of the surrounding rural community create an urgency that would likely justify a temporary moratorium under the general police power on building permits for mines and quarries. But the governing board would need to do this by ordinance, carefully considering and documenting the potential impacts of inaction. The board also would need to design and embark on a course of action while the moratorium is in place to more fully study the issue and develop appropriate land-use regulations. The board also would need to limit the duration of the moratorium to a reasonable period for doing this.

              The video arcade situation, on the other hand, while of real concern to the neighboring businesses, is less likely to present a level of urgency sufficient to justify a general police power moratorium. Questions such as the adequacy of off-street parking requirements are more properly addressed by normal ordinance updates. A normal zoning text amendment, not a building permit moratorium, is the best course of action for this situation.[16] The question of exactly when a newly realized problem rises to the level of urgency to warrant a moratorium is a judgment call that must be made by local elected officials.

              The subdivision and shopping center is an intermediate situation, but in all likelihood a subdivision plat and rezoning moratorium would be warranted. Action was initiated by the city to address concerns with traffic, open space, and community character. A limited moratorium to preserve the status quo in order to allow public debate would prevent a rush to develop in ways that may be inconsistent with the resulting plan. The more difficult question here is whether a degree of urgency sufficient to justify use of a general police power moratorium exists or whether the zoning and subdivision ordinances should be amended to impose a temporary moratorium. This question generally is left to the judgment of the city's elected officials. The water and sewer shortage, if documented, would further establish a clear public health and safety basis for a moratorium and thereby further support use of the expedited general police power process.

              In sum, development moratoria serve an important purpose no other land-use management tool can accomplish. They allow a temporary freeze on development activity while rational, long term solutions to urgent problems can be developed, publicly debated, and implemented. Adopting a moratorium is a serious step for a local government. Moratoria should be judiciously employed, carefully limited, and supported by adequate planning and legal study of each particular instance for which its use is considered. If a local government does this in its careful consideration of a moratorium, its use is legally defensible in North Carolina.


              Notes

              1. 214 N.C. 135, 198 S.E. 585 (1938). See also Bizzell v. Board of Aldermen of City of Goldsboro, 192 N.C. 364, 135 S.E. 58 (1926). Courts in other states have allowed interim zoning while comprehensive zoning was being prepared. See, e.g., Miller v. Board of Pub. Works, 195 Cal. 477, 234 P. 381 (1925), error dismissed, 273 U.S. 781 (1927). Several states explicitly give local governments statutory authority to adopt interim zoning ordinances. For more information on this subject, see Robert Anderson, American Law of Zoning, 3d ed. (Rochester, N.Y.: Lawyers Cooperative Publishing Co., 1986), vol. 1 § 5.24; Annotation, "Validity and Effect of 'Interim' Zoning Ordinance," 30 A.L.R.3d 1196 (1970).

              2. Sofran v. City of Greensboro, 327 N.C. 125, 393 S.E.2d 767 (1990); Orange County v. Heath, 278 N.C. 688, 180 S.E.2d 810 (1971).

              3. N.C. Gen. Stat. § 160A-174(a) (hereinafter the General Statutes will be cited as G.S.). The comparable county statute is G.S. 153A-121. In addition, authority for several other specific types of regulations also are set forth in the statutes at G.S. 160A-178 to -197 and G.S. 153A- 125. The enumeration of specific areas of potential regulation is not exclusive or a limiting factor on the general police power. G.S. 160A-177, 153A-124.

              4. McCauley v. City of Jacksonville, 739 F. Supp. 278 (1989), aff'd per curiam, 904 F.2d 700 (1990). See also G.S. 143-215.3(a)(8) and -215.3(a)(12) regarding the state's authority to impose moratoria on construction and operation of new or additional waste treatment systems and on new pollution sources.

              5. Courts in twenty-three of the twenty-nine other states that have considered the question of implied statutory authority for moratoria have ruled that such authority is included in the general police power or municipal home rule charters, and three of the six holding that there was inadequate authority upheld at least some form of moratoria. Edward Ziegler, Rathkopf's The Law of Zoning and Planning (New York: Clark Boardman Company, Ltd., 1990), vol. 1 § 11.03.

              6. Broadnax v. Groom, 64 N.C. 244 (1870). See also State v. Warren, 252 N.C. 690, 114 S.E.2d 660 (1960); Rosenthal v. City of Goldsboro, 149 N.C. 128, 62 S.E. 905 (1908).

              7. See, e.g., Associated Home Builders v. City of Livermore, 18 Cal. 3d 582, 557 P.2d 473 (1976) (schools, sewer, and water capacity); Metro Realty v. County of El Dorado, 222 Cal. App. 2d 508, 35 Cal. Rptr. 480 (1963) (water supply); Charles v. Diamond, 41 N.Y.2d 318, 360 N.E.2d 1295 (1977) (sewer capacity).

              8. See, e.g., SCA Chemical Waste Serv. v. Konigsberg, 636 S.W.2d 430 (Tenn. 1982).

              9. See, e.g., Sherman v. Reavis, 273 S.C. 542, 257 S.E.2d 735 (1979).

              10. See, e.g., City of Dallas v. Crownrich, 506 S.W.2d 654 Ct. App. 1974).

              11. An ordinance may not, for example, declare a lawful land use to be a nuisance when it is not necessarily in fact a nuisance. Barger v. Smith, 156 N.C. 323 (1911). Where there is an arguable public benefit of the regulation, the judicial trend has been to defer to legislative judgment and allow the regulation. Poor Richards, Inc. v. Stone, 322 N.C. 61, 366 S.E.2d 697 (1988); A-S-P Assoc. v. City of Raleigh, 298 N.C. 207, 258 S.E.2d 444 (1979); Smith v. Keator, 285 N.C. 530, 206 S.E.2d 203 (1974); State v. Warren, 252 N.C. 690, 114 S.E.2d 660 (1960).

              12. Ordinances in North Carolina have been invalidated both when they regulated one land use but unreasonably exempted very similar uses [Cheek v. City of Charlotte, 273 N.C. 293, 160 S.E.2d 18 (1968)] and when they regulated more uses than necessary to meet the stated purpose of the ordinance [Treants Enter., Inc. v. Onslow County, 320 N.C. 776, 360 S.E.2d 783 (1987)]. For an example of a moratorium being invalidated due to a failure to observe a reasonable fixed length, see Deal Gardens, Inc. v. Board of Trustees of Village of Loch Arbor, 48 N.J. 492, 226 A.2d 607 (1967).

              13. Kass v. Hedgepeth, 226 N.C. 405, 38 S.E.2d 164 (1946). See also State v. Bass, 171 N.C. 780, 87 S.E. 972 (1916).

              14. State v. Johnson, 114 N.C. 846, 19 S.E. 599 (1894). See also McCauley v. City of Jacksonville, 739 F. Supp. 278 (1978), aff'd per curiam, 904 F.2d 700 (1990); Angelo v. City of Winston-Salem, 193 N.C. 207, 136 S.E. 489 (1926); Small v. Councilmen of Edenton, 146 N.C. 527, 60 S.E. 413 (1908).

              15. Zilber v. Town of Moraga, 692 F. Supp. 1195 (N.D. Cal. 1988); S.E.W. Friel v. Triangle Oil Co., 76 Md. App. 96, 543 A.2d 863 (1988) (nine-month zoning approval moratorium); Noghrey v. Acampora, 543 N.Y.S.2d 530 (App. Div. 1989) (six-month moratorium).

              16. However, in a somewhat analogous situation, a federal court upheld a ten-and-a-half-month moratorium on fast food restaurants imposed by New Orleans to protect a "picturesque, stable, historically important" neighborhood while ordinance revisions were considered. Schafer v. City of New Orleans, 743 F.2d 1086 (5th Cir. 1984). See also McDonald's Corp. v. Village of Elmsford, 156 A.D.2d 687, 549 N.Y.S.2d 448 (1989) (twelve-month moratorium on fast food restaurants upheld).

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              David W. Owens
              Gladys Hall Coates Professor of Public Law and Government
              owens@sog.unc.edu
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