Moratoria

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 set by state law for zoning amendments.

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.

Any confusion in the case law regarding which process is to be followed in adoption is clarified by these statutes, which provide that 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.

The moratorium must be adopted as an ordinance by the city or county. The ordinance establishing it must expressly include the following four items:

 1.         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;

 2.         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;

 3.         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

 4.         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.

The statutes contain 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.^[5] 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^[6] 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.^[7]

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.

Finally, 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 on Moratoria

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^[8] 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^[9] 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.^[10] 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.^[11] 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,^[12] though it is only the extraordinary moratorium that will fall into this category. For example, in Monks v. City of Rancho Palos Verdes,^[13] 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.^[14]

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. Northside United Church of Christ,^[15] 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 which 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^[16] rejected a due-process and First Amendment–free-speech challenge to a six-month moratorium as applied to an adult business.