Spot Zoning

Legal Basis for Stricter Scrutiny

As a general rule, legislative decisions regarding zoning—decisions to adopt, amend, or repeal a zoning ordinance—are presumed to be valid, and the judiciary largely defers to the judgment of local elected officials on such matters.^[1]

Stricter judicial scrutiny is given to rezonings that affect a small geographic area or a small number of landowners than is given to rezonings implicating broad public-policy issues. Heightened judicial review of spot zoning is founded on state constitutional prohibitions against the granting of exclusive privileges,^[2] the creation of monopolies,^[3] and the violation of due process or equal protection of the law.^[4]

The North Carolina courts have held that spot zoning must not be arbitrary or capricious.^[5] In Blades v. City of Raleigh, the court emphasized the need for a reasonable basis to justify spot zoning largely in terms of effects on neighboring properties:

The whole concept of zoning implies a restriction upon the owner’s right to use a specific tract for a use profitable to him but detrimental to the value of other properties in the area, thus promoting the most appropriate use of land throughout the municipality, considered as a whole. The police power, upon which zoning ordinances must rest, permits such restriction upon the right of the owner of a specific tract, when the legislative body has reasonable basis to believe that it will promote the general welfare by conserving the values of other properties and encouraging the most appropriate use thereof.^[6]

In its most comprehensive review of spot-zoning limitations, the court in Chrismon v. Guilford County^[7] concluded that a clear showing of a reasonable basis must support the validity of spot zoning. This shifts the presumption of validity accorded to legislative zoning decisions when a small-scale rezoning is involved.

This mandated analysis was incorporated into the zoning statutes in 2005 with the addition of a requirement that a statement analyzing the reasonableness of the proposed rezoning be prepared as part of the consideration of all petitions for a conditional district or any other small-scale rezoning.^[8] With other rezonings, if the reasonableness of the amendment is debatable, it is upheld. With spot-zoning amendments, the local government must affirmatively show the reasonableness of its action.^[9]

The language of individual zoning ordinances can impose additional limitations on spot zoning. For example, in the Blades case, the Raleigh zoning ordinance required that rezoning decisions be “based on the need to change the zoning map in accordance with the comprehensive plan or to amend the plan for the benefit of the neighborhood or city, because of changed conditions.”^[10]

Defining Spot Zoning

Rezonings that undergo more intensive review as spot zoning were simply and concisely defined as zoning “changes limited to small areas” in North Carolina’s first case on the subject, Walker v. Town of Elkin.^[11]

In Zopfi v. City of Wilmington,^[12] a case that upheld the rezoning of a sixty-acre parcel into three zoning districts, the court ruled that illegal spot zoning arose “where a small area, usually a single lot or a few lots, surrounded by other property of similar nature, [was] placed arbitrarily in a different use zone from that to which the surrounding property [was] made subject.”^[13] Four years later, in Blades, a case that invalidated a five-acre rezoning, spot zoning was more completely defined thus:

A zoning ordinance, or amendment, which singles out and reclassifies a relatively small tract owned by a single person and surrounded by a much larger area uniformly zoned, so as to impose upon the smaller tract greater restrictions than those imposed upon the larger area, or so as to relieve the small tract from restrictions to which the rest of the area is subjected, is called “spot zoning.”^[14]

There are several aspects to this definition.

First, spot zoning can be an issue raised in initial zoning as well as in subsequent rezonings.^[15]

Second, no specific minimum or maximum size of an area constitutes spot zoning. The size of the tract must be considered relative to the surrounding area.^[16] A fifty-acre rezoning in a rural setting where that tract and thousands of adjacent acres have previously been zoned the same way may be spot zoning, but a five-acre rezoning in a dense urban setting with numerous zoning districts may not be spot zoning. In the North Carolina cases that have resulted in invalidation of rezonings as illegal spot zoning, the size of the tracts involved has ranged from 0.57 to 50 acres. That said, if the size of the zoning district is sufficiently large, the rezoning is simply not spot zoning. In Friends of Mt. Vernon Springs, Inc. v. Town of Siler City, the court held that a 1076-acre tract is not a “relatively small area” and cannot be considered spot zoning.^[17]

Third, there is an emphasis on a very limited number of property owners being involved, “usually triggered by efforts to secure special benefits for particular property owners, without regard for the rights of adjacent landowners.”^[18] A large number of affected parties is more likely to bring the rezoning to broader public scrutiny, greater political accountability, and less need for judicial oversight. The definition used in Blades in fact speaks to a single owner of the affected property. This “single owner” requirement was applied in Musi v. Town of Shallotte,^[19] a rezoning of newly annexed property consisting of fifteen parcels owned by six persons, and in Good Neighbors of Oregon Hill Protecting Property Rights v. County of Rockingham,^[20] rezoning a two-acre parcel jointly owned by a father and son. In each case the court found that since the rezoned property was not owned by a single person or entity, it by definition could not be spot zoning.

Fourth, spot zoning can be involved when the proposed new zoning requirements for the small area are either more or less strict than those for the surrounding area. The key element is that the proposed zoning is different from the other zoning, “thus projecting an inharmonious land use pattern.”^[21] It is not spot zoning where the difference in the zoning districts is very modest. For example, in Childress v. Yadkin County, the court held that the “restricted residential” and “rural agricultural” (RA) districts at issue were sufficiently similar to avoid a spot-zoning characterization.^[22]

Fifth, there must be a zoning-map amendment to trigger spot-zoning review. A text amendment, even when it is an amendment to the terms of a conditional zoning for a single parcel owned by a single entity, is not spot zoning. For example, in McDowell v. Randolph County,^[23] the county approved an amendment to the site plan that allowed relocation of chemical vats in a lumberyard that was in a conditional-zoning district. The site plan was a part of the conditions for the district. The court noted that the amendment did not change the zoning of the parcel, so it by definition could not be considered spot zoning.

In sum, the heightened scrutiny of spot zoning applies when there is the appearance of possible discriminatory treatment (either favorable or negative) for a few, rather than a decision based on the larger public interest.

Factors in Validity

When adopting a “spot” zone, a local government has an affirmative obligation to establish that there is a reasonable public-policy basis for doing so. Thus, the public-hearing record and minutes of the board’s deliberations should reflect consideration of legitimate factors for differential zoning treatment of the property involved. Does the property have different physical characteristics that make it especially suitable for the proposed zoning, such as peculiar topography or unique access to roads or utilities? Are there land uses on or in proximity to the site that are different from the uses made of most of the surrounding property? Would the proposed range of newly permissible development be in harmony with the legitimate expectations of the neighbors? Have appropriate safeguards been incorporated to protect the interests of those affected?

In Chrismon, the court set out in detail four factors that are considered particularly important by the courts in determining whether there is a reasonable basis for spot zoning:

At the outset, we note that a judicial determination as to the existence or nonexistence of a sufficient reasonable basis in the context of spot zoning is, and must be, the “product of a complex of factors.” The possible “factors” are numerous and flexible, and they exist to provide guidelines for a judicial balancing of interests. Among the factors relevant to this judicial balancing are the size of the tract in question; the compatibility of the disputed zoning action with an existing comprehensive zoning plan; the benefits and detriments resulting from the zoning action for the owner of the newly zoned property, his neighbors, and the surrounding community; and the relationship between the uses envisioned under the new zoning and the uses currently present in adjacent tracts. Once again, the criteria are flexible, and the specific analysis used depends on the facts and circumstances of a particular case.^[24]

The court has subsequently emphasized that a mere cataloging of benefits is inadequate. The “clear showing”^[25] of reasonableness must address the totality of circumstances involved and “must demonstrate that the change was reasonable in light of its effect on all involved.”^[26] Thus, the statement of reasonableness approved by the board adopting a spot zoning should specify in some detail the basis for the action taken and the information before the board that supports that conclusion.

In 2019, the gist of the Chrismon rule was codified and made applicable to all zoning-map amendments. G.S. 160D-605(b) requires adoption of a statement of reasonableness for all zoning-map amendments. The statute lists the factors that should be considered in this analysis. The factors are suggested and not mandated, as not all factors will be relevant to all rezoning decisions. The factors to be addressed are:

1. the size and physical attributes of the site;
2. the benefits and detriments to the landowner, the neighbors, and the community;
3. how the actual and previously permitted uses of the site relate to newly permitted uses;
4. any changed conditions warranting the amendment; and
5. other factors affecting the public interest.

A review of North Carolina litigation illustrates the application of these factors to spot-zoning challenges of rezonings.

Size of Tract

The first factor to be considered in determining whether spot zoning is reasonable is the size of the tract. The general rule is that the smaller the tract, the more likely the rezoning will be held invalid. However, it is very important to consider the size of the tract in context: a one-acre parcel may be considered large in an urban area developed in the 1920s but very small in the midst of an undeveloped rural area.

The rezoning of an individual lot from a single-family- and multifamily-residential district to a business district was upheld in Nelson v. City of Burlington.^[27] In this instance, the majority of property directly across the street was already zoned for business use, and the court concluded that, given the prevalence of business zoning in the immediate vicinity of this lot, there was “some plausible basis” for the rezoning.^[28]

However, several cases have held the rezoning of relatively large tracts to be illegal spot zoning. A rezoning of a fifty-acre tract from RA to industrial was invalidated in Good Neighbors of South Davidson v. Town of Denton.^[29] The site was a satellite area of the town, located in the midst of a rural and farming area some two miles from the town’s primary corporate limits. A rezoning of a 29.95-acre portion of a 120.3-acre parcel from RA and light industrial to a conditional heavy industrial was invalidated in McDowell v. Randolph County,^[30] where the surrounding land, estimated at “thousands of acres,” was uniformly zoned as RA. Similarly, a rezoning of 17.6 acres from RA to industrial was held to be impermissible spot zoning in Budd v. Davie County.^[31] The site there was some four to five miles from the nearest industrial zone, with all of the intervening property being in residential districts. A 17.45-acre rezoning was also ruled to be impermissible spot zoning inGodfrey v. Union County Board of Commissioners.^[32] This case involved a rural tract that was zoned for single-family-residential use, as was all of the surrounding property, and the rezoning was to an industrial district. The court in Alderman v. Chatham County,^[33] which involved the rezoning of a 14.2-acre tract from an RA district to a mobile-home park, when the surrounding 500 acres were residentially zoned, also found that unreasonable spot zoning had occurred. However, at some point the size of the tract is such that it precludes a determination that its size is a factor in determining reasonableness. In Friends of Mt. Vernon Springs, the court noted that a rezoning of a 1076-acre tract was not unreasonable and was not spot zoning.^[34]

The fact that other small areas nearby have similar zoning to that proposed in a rezoning will not avoid a spot-zoning label. The tract to be rezoned is considered in relation “to the vast majority of the land immediately around it.”^[35]

Compatibility with Plan

The second factor in a spot-zoning analysis is compatibility with the existing comprehensive zoning plan. This involves an inquiry into whether the rezoning fits into a larger context involving rational planning for the community. Whether set forth in a formal comprehensive land use plan or reflected in an overall zoning scheme, zoning regulations must be based on an analysis of the suitability of the land for development (e.g., topography, soil types, wetland locations, and flood areas), the availability of needed services (e.g., water, sewers, roads, and rail lines), and existing and needed land uses.^[36] To the extent that a small-area rezoning fits into a logical preexisting plan that is clearly based on this type of analysis, it is much more likely to be upheld.

An example of a zoning scheme involving relatively small parcels that was judged acceptable because it fit the context of the land and the surrounding uses is found in Zopfi. The court there upheld the rezoning of a roughly sixty-acre triangle, formed by two major highways, into three zoning districts with decreasing density moving away from the point of the highway intersection. A 27.5-acre parcel at the point of the intersection was zoned commercial, the next 12 acres were zoned for multifamily-residential use, and the remainder was zoned for single-family-residential use. Similarly in Nelson, the rezoning of a lot from residential use to business use was upheld on the basis that the majority of the property directly across the street was already zoned for business use.

A contrast is provided by situations in which there are no discernible reasons to single out a small tract for differential zoning treatment. This is a common rationale cited by the courts when finding spot zoning to be unreasonable and thus illegal. A number of North Carolina cases illustrate this point.

An early example is Stutts v. Swaim. In 1967, the town of Randleman had zoned virtually all of its half-mile extraterritorial-zoning jurisdiction (some 500 acres) for one- and two-family residences. An attempt in 1968 to rezone a four-acre tract to a mobile-home zoning district, when there were no special characteristics present on that site, was ruled invalid spot zoning.^[37] A relatively common spot-zoning controversy arises when a rezoning is proposed to allow intensive industrial-type uses in the midst of largely residential rural areas.

In McDowell v. Randolph County,^[38] the plaintiff secured the rezoning of nearly thirty acres to allow expansion of milling operations at an existing nonconforming lumberyard and sawmill. The proposed rezoning would have allowed a pallet-making operation, kiln, and industrial-building expansion immediately adjacent to the plaintiff’s residence.^[39] The court noted the drastically different statement of purposes for the residential-agricultural and industrial districts in the county’s unified development ordinance. The county’s growth-management plan expressly provided that industrial development should not be located where it would diminish the desirability of residential uses. The plan identified the site as within the rural growth area, to be composed predominantly of agricultural and residential uses. Both the ordinance and the plan called for substantial buffers between industrial and residential uses and the rezoning. The court concluded the rezoning was in direct contravention of these plans and policies.

In Lathan v. Union County Board of Commissioners,^[40] an 11.4-acre rezoning from residential to light-industrial use was ruled to be invalid spot zoning. A sawmill on the site was being operated as a nonconforming use, and the rezoning was necessary to accommodate the facility’s expansion. The site had no access to major highways, rail lines, or public utilities, and the planning director concluded that industrial development would be incompatible with the surrounding residential community. Nevertheless, the planning board recommended that the tract be rezoned as requested.^[41] The Union County commissioners agreed with the planning board’s recommendation and adopted the rezoning. The adjacent landowner then sued. The court of appeals ruled that no special features on the tract made it any more suitable than the surrounding property for industrial use. The rezoning was ruled invalid spot zoning because there was no clear showing of a reasonable basis for the rezoning.

In Godfrey v. Union County Board of Commissioners,^[42] the comprehensive plan designated the area rezoned as a low-density residential district, and the nearest industrial uses were approximately a half-mile away. The owner sought rezoning to heavy-industrial use because he wanted to relocate a grain-bin operation to the site. The planning director recommended approval of the rezoning from residential to industrial use based on the site’s accessibility to a major highway, a railroad, and public water. The planning board approved the recommendation, and the county commissioners narrowly adopted it. The court invalidated the rezoning, however, finding that the “whole intent and purpose . . . was to accommodate his plans to relocate his grain bins, not to promote the most appropriate use of the land throughout the community.”^[43] The court acknowledged the availability of some services that would make this tract suitable for industrial development but concluded that the same was true of the surrounding property, and because this tract was “essentially similar,” there was no reasonable basis for zoning it differently.

A formal comprehensive plan and the recommendations of the planning board are increasingly important in spot-zoning analysis.

In Mahaffey v. Forsyth County,^[44] a 0.57-acre tract was rezoned from a residential and highway-business district to a general-business district. The comprehensive plan designated the area as “predominantly rural with some subdivisions adjacent to farms.” The planning staff and the planning board recommended against the rezoning, but the board of commissioners adopted it. In ruling the action to be illegal spot zoning, the court pointedly noted, “[T]he County Planning Board and Planning Board Staff, made up of professionals who are entrusted with the development of and adherence to the comprehensive plan, recommended denial of the petition.”^[45]

A similar result was reached in Covington v. Town of Apex,^[46] in which the rezoning of a single lot from office and institutional use to conditional use business was held to be impermissible spot zoning. The court concluded that the rezoning contradicted the town’s policies on location of industrial uses, as set forth in the comprehensive plan. The court also found minimal benefit to the public and substantial detriment to neighbors. In Budd, the rezoning of a fourteen-acre site along the Yadkin River, as well as a half-mile-long, sixty-foot-wide accessway, from RA to industrial in order to accommodate a sand-mining operation was invalidated in part because it directly contradicted the previously adopted policies for the area. The zoning ordinance’s stated intent for the RA district was to maintain a “rural development pattern” with an aim “clearly to exclude commercial and industrial uses.”^[47] Based on such considerations, the planning board twice recommended denial of the rezoning petition. The court held that the rezoning was in direct contravention of the stated purpose of the comprehensive zoning scheme, and this factored into invalidation of the rezoning.^[48]

Consistency with a comprehensive plan sometimes justifies differential zoning. In Graham v. City of Raleigh,^[49] the rezoning of a 30.3-acre tract from a residential to an office district was upheld in part based on the need to bring the property in line with the nodal concept of development promoted in Raleigh’s comprehensive plan.^[50]

Formal amendment of an inconsistent comprehensive plan is not necessarily required to avoid a finding of illegal spot zoning, though a reasonable basis for the deviation must be established.^[51] In Purser v. Mecklenburg County,^[52] the court upheld the rezoning of a 14.9-acre tract from residential to conditional use–commercial to allow construction of a neighborhood convenience center. The county’s small-area plan for the site indicated that a nearby but different site was suitable for such a center. However, testimony presented at the public hearing indicated that whereas the suitability of the other site depended on road construction, locating a convenience center on the site in question would be consistent with policies in the county’s general-development plan.

Balancing Benefits and Detriments

The third factor to be considered in spot-zoning analysis is who benefits from the rezoning, who (if anyone) is harmed, and what the relative magnitudes of the benefits and harms are. If the rezoning is granted, will it greatly benefit the owner? Will the owner be seriously harmed if it is denied? After the same questions are asked of the neighbors and the community at large, the effects on all three must be balanced. In a spot-zoning challenge, the courts, not the governing board alone, review and weigh the balance of benefit and harm created by the rezoning.

The courts may be sympathetic to a rezoning that confers considerable benefit to the owner and only modest harm to others, but even a substantial benefit for the owner will not offset substantial harm to others. This principle is evident in the ruling that invalidated the rezoning challenged in Blades. The case involved rezoning a five-acre tract in the midst of a large single-family zoning district to a multifamily district in order to allow for the construction of twenty townhouses. The court found that no reason was offered for treating this property differently and that the character of the existing neighborhood might be greatly harmed as a result.^[53] In Etheridge v. County of Currituck,^[54] the court noted that the purported benefits of a proposed recycling center were not supported by any evidence presented at the rezoning hearing, and the benefits offered were “a generalized benefit that has no specific connection to the surrounding rural community,” while the “vast majority” of speakers were in opposition and offered supporting evidence from real-estate professionals and law-enforcement officials.^[55]

Chrismon illustrates the other side of this analysis. The court there noted as follows:

[W]hile spot zoning which creates a great benefit for the owner of the rezoned property with only an accompanying detriment and no accompanying benefit to the community or to the public interest may well be illegal, spot zoning which provides a service needed in the community in addition to benefiting the landowner may be proper.^[56]

In Chrismon the rezoning of one 3-acre and one 5-acre tract from an agricultural district to a conditional use–industrial district in order to allow for an agricultural chemical use was upheld. The court weighed the benefit to the owner, the harm to the immediately adjacent neighbor, the broad community support for the rezoning, and the need for these services in the surrounding agricultural community; it concluded that there were “quite substantial benefits created for the surrounding community by the rezoning.”^[57]

The benefits to the community must be real and substantial, not merely convenient. For example, in Mahaffey, it was argued that rezoning a 0.57-acre tract to allow for the establishment of an auto-parts store would be beneficial to a rural community in which virtually everyone depended on automobiles. The court rejected this argument, noting, “[A]uto parts are a common and easily obtainable product and, if such a retail establishment were said to be ‘beneficial to a rural community,’ then virtually any type of business could be similarly classified.”^[58] Likewise, in Budd, the court ruled that generalized benefits resulting from increased business activity related to the operation of a sand mine did not offset the potential harm to neighbors caused by the influx of heavy-truck traffic into the rural residential area.^[59]

A spot-zoning analysis must consider the impacts on neighbors and the surrounding community even if they are not located in the jurisdiction of the local government making the rezoning. In fact, in Good Neighbors of South Davidson,^[60] the court indicated it would give particular attention to the weighing of benefits and detriments in this situation because the neighbors had no political recourse for addressing what they deemed to be unreasonable zoning decisions:

[I]n the aftermath of the satellite annexation, when the authority to rezone the parcel shifted from the county to the Town of Denton, Piedmont’s neighbors suddenly found themselves outside looking in. Without a say in the annexation process, they had no one to defend their zoning interests and no one to vote out of office for failing to do so. In sum, the Town of Denton could act on the property at issue without fear of political reprisal from the neighboring landowners of Davidson County. From our vantage point, there are precious few circumstances that could prove more detrimental to a surrounding community.^[61]

In concluding that this rezoning constituted illegal spot zoning, the court noted that the town’s failure to consider the adverse impacts on the neighbors was “rather suggestive of a cavalier unreasonableness on the part of the town.”^[62]

Relationship of Uses

The fourth factor in spot-zoning analysis is the relationship between the proposed uses and the current uses of adjacent properties. The greater the disparity, the more likely the rezoning is to be held illegal.

This was a consideration in the court’s invalidation of the rezonings in the Lathan, Godfrey, and Budd cases, even though all three situations involved relatively large acreage: 11.4 acres, 17.45 acres, and 17.6 acres, respectively. In each case the rezoning was from low-density residential to industrial use. The magnitude of the change prompted the courts to look closely for a supporting rationale; they found none.^[63] Likewise, in both the Allred and the Blades cases, proposals to locate high-density multifamily projects in single-family-residential neighborhoods were invalidated.

On the other hand, the abovementioned Chrismon case resulted in only a modest change in the allowed uses: the landowner could carry on the storage and sale of grain under the original zoning; the rezoning allowed the storage and sale of agricultural chemicals. Further, the site was in the midst of an agricultural area that needed such services. Thus, the court could conclude the following:

[T]his is simply not a situation . . . in which a radically different land use, by virtue of a zoning action, appears in the midst of a uniform and drastically distinct area. No parcel has been “wrenched” out of the Guilford County landscape and rezoned in a manner that “disturbs the tenor of the neighborhood.” . . . In our view, the use of the newly rezoned tracts . . . is simply not the sort of drastic change from possible surrounding uses which constitutes illegal spot zoning.^[64]

In addition, limitations on the uses proposed in the zoning approval and site-specific development conditions can minimize the adverse impact on neighboring properties. For example, a conditional use district rezoning to allow a neighborhood convenience center was upheld in Purser, in part because “the development of the Center was governed by a conditional use site plan that was designed to integrate the Center into the neighborhood and insure that it would be in harmony with the existing and proposed residential uses on the surrounding property.”^[65] By contrast, the failure to condition the rezoning on provisions that would mitigate harm to neighbors was a factor in the invalidation of the rezoning in Etheridge.^[66]

A change in the conditions is not required to justify a rezoning in North Carolina, but it can be an important factor in establishing that a proposed new zoning classification is compatible with surrounding land uses. For example, in Allgood v. Town of Tarboro,^[67] the rezoning of a twenty-five-acre tract from residential to commercial use was upheld in part on the basis that in the eight years between the initial adoption of zoning and the challenged rezoning, the surrounding area had substantially changed because of the expansion of an adjoining road, the extension of water and sewer lines, the construction of a school and an apartment complex nearby, and the annexation of the site by the city.