[Adapted from Owens, Land Use Law in North Carolina (4th ed., 2023)]
Given the time needed to complete the procedures required for adoption or amendment of development regulations or to even rezone property, local governments sometimes adopt moratoria on development to preserve the status quo while plans are made, management strategies are devised and debated, ordinances are revised, or other development-management concerns are addressed.[1] Moratoria are also sometimes used when there are insufficient public services necessary to support development, such as inadequate water supply or wastewater-treatment capacity.
Local governments and the courts have long recognized the planning value of temporary moratoria in certain circumstances. The U.S. Supreme Court noted, “[M]oratoria . . . are used widely among land-use planners to preserve the status quo while formulating a more permanent development strategy. In fact, the consensus of the planning community appears to be that moratoria . . . are an essential tool of successful development.”[2] Even so, the impact of a moratorium on individual landowners can be significant for at least the duration of the moratorium. Thus, it is not surprising that controversy and sometimes litigation follow a decision to apply a development moratorium.
Some states allow use of expedited procedures to adopt an interim zoning ordinance, sometimes referred to as “stopgap zoning.” These interim ordinances typically allow existing land uses to be continued and similar uses established while more detailed and future-oriented ordinances are being prepared. This is not allowed in North Carolina. In this state, all zoning ordinances must be adopted in accordance with the procedures required for all development regulations.
Authority and Process to Adopt
In 2005, the General Assembly amended the zoning-enabling statutes to explicitly authorize use of development moratoria and set a number of rules regarding their use.[3]
G.S. 160D-107 allows temporary development moratoria to be placed on any city’s or county’s development approval. This statute authorizes moratoria on “any development approval required by law.” This includes all zoning permits, land-subdivision plats, building permits, sign permits, and any other approvals required prior to development.
If there is an imminent threat to public health and safety, the moratorium may be adopted without notice or hearing. Otherwise, a moratorium with a duration of sixty days or less requires a single public hearing with a notice published not less than seven days in advance of the hearing; a moratorium with a duration of more than sixty days (and any extension of a moratorium so that the total duration is more than sixty days) requires a public hearing with the same two published notices required for other land use regulations. The initial notice of the hearing must be published at least ten but not more than twenty-five days prior to the day of the hearing, and the second notice must be published in a separate calendar week.
Required Statements
The moratorium must be adopted as an ordinance by the city or county. The ordinance establishing it must expressly include the following four items:
- a clear statement of the problems or conditions necessitating the moratorium, what courses of action other than a moratorium were considered by the city or county, and why those alternatives were not deemed adequate;
- a clear statement of the development approvals subject to the moratorium and how a moratorium on those approvals will address the problems that led to its imposition;
- an express date for termination of the moratorium and a statement setting forth why that duration is reasonably necessary to address the problems that led to its imposition; and
- a clear statement of the actions, and the schedule for those actions, proposed to be taken by the city or county during the moratorium to address the problems that led to its imposition.
Exceptions to Moratorium
The statute contains several exemptions from the coverage of moratoria and limits on their use. The most significant of these is that the “permit choice” rule applies if a completed application for the development was submitted prior to the effective date of the moratorium.[4] In these instances, action of the application is suspended while the moratorium is in effect, but when permit processing resumes, the applicant has the option of having the proposed project considered under the rules in effect at the time of the application or at the time of the permit decision. A moratorium may not be applied to residential land uses if the purpose of the moratorium is to preserve the status quo while plans or ordinances are developed or updated. Absent an imminent threat to public health and safety, moratoria may not be applied to projects with legally established vested rights—those with a valid outstanding building permit, an outstanding approved site-specific vesting plan, or substantial expenditures that have been made in good-faith reliance on a prior valid administrative or quasi-judicial permit or approval. Moratoria do not apply to certain projects for which complete applications have been accepted by the city or county prior to the call for a public hearing[5] to adopt the moratorium. These include special use permits and preliminary or final plats. If a preliminary plat application is subsequently approved while a moratorium is in effect, that project can also proceed to final plat approval. Moratoria may not be applied to colocation of small wireless facilities.[6]
Extension
Renewal or extensions of moratoria are also limited by this statute. Extensions are prohibited unless the city or county has taken all reasonable and feasible steps to address the problems or conditions that led to imposition of the moratorium. An ordinance extending a moratorium must explicitly address this point, in addition to the four points noted above, and set forth any new facts or conditions warranting the extension.
Judicial Review
The statute provides for expedited judicial review of moratoria. Any person aggrieved by the imposition of a moratorium may petition the court for an order enjoining its enforcement. These actions are to be set for immediate hearing and are to be given priority scheduling by both trial and appellate courts. The burden is on the city or county in these challenges to show compliance with the procedural requirements of the statute regarding moratoria adoption.
Constitutional Limitations
Opponents of development moratoria have argued that a regulation that even temporarily precludes the possibility of development approvals constitutes an unconstitutional taking of private property without compensation.
The U.S. Supreme Court has held that a temporary moratorium on development approvals is not in and of itself an unconstitutional taking.Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency[7] involved development moratoria imposed on sensitive lands adjacent to Lake Tahoe while studies, planning, and development regulations were being prepared. There were two moratoria challenged in this suit, which together prevented development in the most-sensitive portions of the Lake Tahoe watershed for thirty-two months. (Other moratoria not involved in this litigation effectively extended these moratoria to six years). The plaintiff urged the Court to hold that all moratoria, no matter how short or long, violated the constitutional prohibition on taking private property without just compensation on the rationale that no economically productive use of their property could be made during the moratorium. The Court refused to accept this reasoning. The Court held that the balancing test enumerated in Penn Central Transportation Co. v. City of New York[8] should be applied in virtually all cases contending that a regulation is a taking. The Court ruled that the examination of the economic impact of the moratorium could not be applied to the period of the moratorium alone, further limiting the attempt of property owners to segment property interests when making a taking analysis.[9] Consideration of “fairness and justice” is critical, and in Tahoe-Sierra a careful analysis of all the factors involved led to a conclusion that there was no taking. The Court noted that temporary moratoria allowed time for necessary studies, public participation, and deliberation, and that the complexity of the management issues involved with developing a complex bi-state management plan justified the moratorium at issue. While noting that moratoria lasting longer than a year might well warrant special skepticism, the Court concluded that the longer period was justified in this situation.
It is legally possible, though unusual, that a moratorium can constitute an unconstitutional taking. An indefinite moratorium can constitute a taking if it deprives the landowners of all economically beneficial use of the property,[10] though it is only the extraordinary moratorium that will fall into this category. For example, in Monks v. City of Rancho Palos Verdes,[11] the city imposed a moratorium on construction of new homes in the vicinity of previous landslides in 1978. Plaintiffs owned lots that had been subject to the moratorium for thirty years. A California appellate court found that the moratorium removed all economically beneficial use of the property and that the facts did not support that these uses would be precluded by the state’s common law of public nuisance, thus the moratorium constituted an unconstitutional taking. A moratorium imposed in order to depress or freeze property values pending potential public acquisition has been held to be an unconstitutional taking by a Florida court.[12]
While rare, other constitutional issues may arise with regard to moratoria. For example, First Amendment and parallel state constitutional rights might be implicated. In City of Woodinville v. Northshore United Church of Christ,[13] the city had adopted a moratorium on all temporary-use permits within its R-1 residential district. The defendant church had two years earlier sponsored a tent encampment in a city park for homeless persons (the program involved encampments that moved around the county, staying in individual locations for ninety-day periods). During this twelve-month moratorium, the church applied for a temporary-use permit to host the encampment on its property. The town denied the permit due to the moratorium. The Washington Supreme Court held that the moratorium placed a substantial burden on the church’s religious freedom and thus violated the state’s constitutional provision on free exercise of religion. The Sixth Circuit Court of Appeals in Bronco’s Entertainment, Ltd. v. Charter Township of Van Buren[14] rejected a due-process and First Amendment–free-speech challenge to a six-month moratorium as applied to an adult business.
[1]. Use of temporary development moratoria is not rare in North Carolina, but they have not been adopted routinely. Nearly 20 percent of the state’s cities and counties responding to a 2008 School of Government survey reported adoption of a moratorium in the previous three years. David W. Owens, Development Moratoria: The Law and Practice in North Carolina 8–9 (UNC School of Government, Special Series No. 26, 2009). The moratoria were most often of short duration (typically six months) and were normally focused on particular types of development. The most common reason cited for moratoria was the need to develop regulations for a particular land use, followed by needs to update plans and the lack of infrastructure to support development. Id. at 10–12. Given the statutory limitations discussed below on the use of residential-development moratoria if the purpose is to update plans or regulations, the use of moratoria has declined since the 2008 survey. However, they are still employed in North Carolina. For example, the Village of Bald Head Island adopted a moratorium on commercial development in 2022 while its master plan and regulations were being updated.
[2]. Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg’l Plan. Agency, 535 U.S. 302, 337–38 (2002). Moratoria “have been found to play an important role in municipal planning. They aid in ‘bridging the gap between planning and its implementation into legal measures.’ They may, as here, be used to preserve the status quo while study of the area and its needs is completed. This moratorium on land use serves a significant public purpose.” Schaefer v. City of New Orleans, 743 F.2d 1086, 1090 (5th Cir. 1984) (upholding ten-and-one-half-month moratorium on permits for fast-food restaurants in a specified neighborhood while study conducted).
[3]. S.L. 2005-426, §§ 5(a), 5(b).
[4]. G.S. 160D-107(c). Importantly, the permit-choice rule only applies if the application was complete at the time of imposition of the moratorium. Ashe County v. Ashe County Planning Bd., 284 N.C. App. 563, 876 S.E.2d 687 (2022).
[5]. The statutes do not define what constitutes a “call for public hearing.” It is likely the time at which the governing board authorizes staff to proceed with advertisement for the hearing or when the formal notice of hearing is otherwise initiated. Also note that the subsequently adopted permit-choice rule allows an applicant for any development approval to select the old or revised rules if the rules change after an application is submitted.
[6]. G.S. 160D-107(c).
[7]. 535 U.S. 302 (2002). See also Wild River Estates, Inc. v. City of Fargo, 2005 ND 193, 705 N.W.2d 850 (twenty-one-month moratorium on building permits in floodway pending adoption of flood-hazard map not a taking).
[8]. 438 U.S. 104, 123–24 (1978). With this test, the courts examine a challenged regulation on a case-by-case basis to consider the character of the governmental action and the economic impact on the landowner (with a particular focus on the distinct investment-backed expectations of the owner).
[9]. When undertaking a taking analysis, the property as a whole, not just the regulated portion or the time period of the regulation, must be considered. Concrete Pipe & Prods. v. Constr. Laborers Pension Trust, 508 U.S. 602 (1993); Machipongo Land & Coal Co. v. Commonwealth, 569 Pa. 3, 799 A.2d 751 (2002).
[10]. This categorical “total taking” test for a regulatory taking is set forth in Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1027 (1992).
[11]. 167 Cal. App. 4th 263, 84 Cal. Rptr. 3d 75 (2008).
[12]. Joint Ventures, Inc. v. Dep’t of Transp., 563 So. 2d 622 (Fla. 1990). This case involved a reservation of land for future purchase. The state imposed a five-year moratorium (which could be extended an additional five years) on any development permits on a 6.5-acre tract that the Department of Transportation needed for stormwater drainage for a future highway-widening project. The court concluded this was essentially the same as deliberately attempting to depress land values in anticipation of condemnation of the property.
[13]. 166 Wash. 2d 633, 211 P.3d 406 (2009) (noting that the Washington constitution’s protections are broader than the Free Exercise Clause of the U.S. Constitution). The Washington court has long vigorously protected religious free-exercise rights under the state constitution. See Munns v. Martin, 131 Wash. 2d 192, 930 P.2d 318 (1997) (invalidating fourteen-month delay imposed on conversion of historic church building to a pastoral center).
[14]. 421 F.3d 440 (6th Cir. 2005). See also Samson v. City of Bainbridge Island, 683 F.3d 1051 (9th Cir. 2012) (thirty-one-month moratorium on dock and pier construction not a due-process violation).
