Part I of S.L. 2019-111–Provisions to Clarify and Change the Land Use Regulatory Laws of the State

By Kevin Hornik and Garrett Davis

On June 28, 2019, the General Assembly ratified Senate Bill 355, (S.L. 2019-111), titled “An Act to Clarify, Consolidate, and Reorganize the Land-Use Regulatory Laws of the State.” The Act, comprised of two parts, does a number of noteworthy things. First and foremost, Part II is the much-anticipated addition to the General Statutes, Chapter 160D, which consolidates and reorganizes the municipal and county land-use planning and development statutes into one chapter. Fortunately, the broad changes found in Chapter 160D do not become effective until January 1, 2021, giving land-use attorneys plenty of time to become familiar with the new statutes.

On the other hand, Part I of S.L. 2019-111, which is the subject of this article, became effective on July 11, 2019 when it was signed into law. Generally, Part I is a mixed bag of changes and clarifying amendments to several land-use and permitting statutes. Changes have been made to the permit choice and vested rights statutes. Several clarifying amendments were enacted throughout the land use laws which specifically define certain terms previously undefined, such as “down-zoning.” A new section (G.S. 160A-393.1) was added to the municipal statutes which gives persons aggrieved a separate cause of action, distinct from the certiorari statute (160A-393), which has also been significantly amended. Several amendments were included which clarify local government authority to impose conditions on special and conditional use permits and zoning districts. And speaking of local government authority (or the lack thereof), many attorneys and local governments should be aware that attorneys’ fees are now mandatory when a court finds that a city or county has acted outside of the “unambiguous limits” of its authority. Throw in a couple more definitional changes (bedroom, dwelling unit, land development regulation, multi-phased development) and a few select amendments to the curb cut and driveway laws, and you’ve got yourself a party.

All of the changes are summarily discussed in the following sections and then in greater detail via a statutory table included at the end of this article.  That said, before going any further, we recommend that you obtain a copy of SL 2019-111, as well as a fresh cup of coffee (or your preferred energizing beverage).

Amendments to Permit Choice Statutes (Sec. 1.1, Sec. 1.2)

Sections 1.1 and 1.2 amend the existing “permit choice” statutes, found in G.S. 143-755, G.S. 153A-320.1, and G.S. 160A-360.1. Previously, these relatively short statutes simply provided that if an applicant submits a permit application for any type of development issued by the State or local government, and an applicable rule or ordinance changes between the time the application was submitted and the time a decision is made on the requested permit, the applicant can choose which version of the rule or ordinance will apply. Now, the amended G.S. 143-755 (which applies to cities and counties) is significantly more detailed and also grants persons aggrieved under the statute a separate right to judicial relief.

Amendments to Vested Rights Statutes (Sec. 1.3)

The vested rights statutes for cities and counties (G.S. §§ 160A-385 and 160A-385.1; G.S. §§ 153A-344 and 153A-344.1) continue to provide that upon the valid or conditional approval of a site specific or phased development plan, following notice and public hearing by the city or county with jurisdiction over the property, a vested right to undertake and complete the development and use of said property under the terms and conditions of the approved plan shall be deemed established. G.S. 160A-385.1 (c); G.S. 153A-344.1 (c). Section 1.3 is primarily a clarifying amendment that more specifically describes the circumstances upon which statutory vested rights are established and the effect those rights have upon the applicability of local ordinances. It is unlikely that the amendments will have a significant practical impact on land-use regulatory practices but seem to be intended to conform the statutes to common practice.

The new G.S. 160A-393.1, discussed further below, also addresses vested rights. It includes a provision ensuring that a property owner may apply to the zoning administrator, seeking an initial determination regarding the existence of a vested right. See, G.S. 160A-393.1(a). As with other administrative interpretations, if the applicant seeks to challenge, either on its face or as applied, the ordinance regulating vested rights as unconstitutional, ultra vires, preempted, or otherwise in excess of statutory authority, or on the grounds that it constitutes a taking, the applicant may file an original civil action with the superior court. However, where an applicant simply seeks to challenge the correctness of the zoning administrator’s interpretation, the applicant must first appeal to the board of adjustment. See, G.S. §§ 160A-393.1(a) and (b).

“Down-Zoning” Map and Text Amendments (Secs. 1.4 and 1.5)

Sections 1.4 and 1.5 amend the procedures required by the zoning map and text amendments statutes (G.S. 160A-384; (G.S. 153A-343). The amendments define the term “down-zoning” as a zoning ordinance that affects an area of land by “decreasing the development density of the land to be less dense” than was previously allowed or by “reducing the permitted uses of the land that are specified in the zoning ordinance to fewer uses” than was previously allowed.[1] These amendments also prohibit the initiation or enforcement of a zoning amendment that down-zones property without the written consent of all property owners subject to the amendment, unless the amendment is initiated by a town or city.[2] These changes will only apply to applications for down-zoning amendments submitted on or after July 11, 2019, and to appeals from decisions related to such applications filed on or after that date.

Enforcement Stays During BOA and Subsequent Appeal Proceedings (Sec. 1.6)

G.S. 160A-388 (applied to counties by G.S. 153A-345.1), which continues to provide the appeal of a notice of violation or other enforcement order to the board of adjustment, would automatically stay enforcement during the appeal process.[3] Section 1.6 amends G.S. 160A-388(b1)(6) by clarifying that the automatic stay of enforcement includes the accumulation of fines during the pendency of an appeal to the board of adjustment, along with any subsequent appeals and/or proceedings authorized under the new G.S. 160A-393.1, discussed in greater detail below.

G.S. 160A-393.1 Gives Private Litigants a New Cause of Action in Addition to That Conferred by G.S. 160A-393 (Sec. 1.7)

Section 1.7 adds G.S. § 160A-393.1, a new section entitled “Civil action for declaratory relief, injunctive relief, other remedies; joinder of complaint and petition for writ of certiorari in certain cases.” This new section supplements G.S. § 160A-393 (Appeals in the nature of certiorari) and enlarges the rights and available remedies of persons seeking relief under the land use and zoning laws.

G.S. 160A-393.1(b) clarifies that where a person seeks to challenge an ordinance, whether on its face or as applied, on the grounds that it is unconstitutional, is ultra vires, preempted, or otherwise in excess of statutory authority, or that it constitutes a taking, that person may bring an original civil action to the superior court on those grounds. However, where a person seeks to challenge the correctness of an administrative interpretation or the application of an ordinance, that challenge must first go to the board of adjustment and then to the superior court as a petition for review in the nature of certiorari under G.S. 160A-393.

G.S. 160A-393.1(e) allows an original civil action, under G.S. 160A-393.1, and a proceeding in the nature of certiorari, under G.S. 160A-393, to be joined and decided in the same proceeding. However, discovery generated in the civil action cannot be used in the certiorari proceeding, except in very specific circumstances. This may create procedural and practical difficulties for land-use attorneys arguing joined actions.

G.S. 160A-393.1(d) provides that the statute of limitations for any action brought pursuant to G.S. 160A-393.1 is one year after the date of delivery of a written decision to the “aggrieved party.”

It does not appear that these original civil actions are available against counties as there is no county statute analogous to G.S. 160A-393.1 included in S.L. 2019-111.

Several Amendments Were Made to G.S. 160A-393 (Sec. 1.9)

Section 1.9 makes several amendments to G.S. 160A-393, which governs appeals in the nature of certiorari. Most of the changes contained in this section are intended to clarify the existing law, while others are intended to conform G.S. 160A-393 with the new G.S. 160A-393.1. The more notable changes to the statute are summarized below:

• G.S. 160A-393(d) ensures that, where an appellant is required to exhaust administrative appeals under G.S. 160A-393 in order to preserve a claim for damages under G.S. 160A-393.1, the appellant’s claim under G.S. 160A-393 will not become moot if the appellant loses the property interest forming the basis of the action as a result of the local government action being challenged.
• G.S. 160A-393(j) now allows discovery in appeals of board of adjustment decisions to the superior court. This is a substantial change, as it mandates discovery in certain circumstances, such as the commonly contested issue of a petitioner’s or intervenor’s standing.
• G.S. 160A-393(l)(3)(a) is revised such that if the superior court concludes that a permit was wrongfully denied because the denial was not based on substantial competent evidence or was otherwise based on an error of law, the court shall remand with instructions that the permit be issued, subject to any conditions expressly consented to by the permit applicant. This is a significant change, as the previous version permitted the permit to be issued “subject to reasonable and appropriate conditions.” This amendment should make it easier for parties to compromise and settle throughout the appeals process.

Creation of G.S. 160A-393.2 (Sec. 1.10)

Section 1.10 creates a new section G.S. 160A-393.2 entitled “No estoppel effect when challenging development conditions.” This section provides that local governments may not assert as a defense that the plaintiff was able to develop under the approved permit if the conditions of approval are contested on appeal.  Similar to the amendment under Section 1.7, there does not appear to be an amendment to Chapter 153A applying the provisions of G.S. 160A-393.2 to counties. However, the language of G.S. 160A-393.2 references both cities and counties, making the applicability of this new statute to counties uncertain.

Attorneys’ Fees Must Be Awarded Against a City or County that Acts Outside of the “Unambiguous Limits” of its Authority (Sec. 1.11)

Section 1.11 amends G.S. § 6-21.7, making an award of attorneys’ fees mandatory in cases where a government is found to be liable for violating “a statute or case law setting forth unambiguous limits on its authority,” specifically including G.S. 160A-360.1, G.S. 153A-320.1, and G.S. 143-755. For purposes of this section, “unambiguous” is defined to mean that the limits of authority are not reasonably susceptible to multiple constructions.  In all other cases, the court may award reasonable attorney’s fees to the party successfully challenging the government, but attorney’s fees are not available to the government.

Amendments Regarding the Authority to Impose Conditions on Special and Conditional Use Permits and Zoning Districts (Secs. 1.12  1.13, 1.14, 1.15)

Sections 1.12 and 1.13, amend G.S. 160A-381(c) and G.S. 153A-340(c1) to clarify the limitation on local government authority to impose conditions and safeguards on special and conditional use permits. Under the previous law, permit approvals could not include requirements for which the local government did not have statutory authority nor for which the courts have held to be unenforceable if imposed directly by the [city or county]. See G.S. 160A-381(c); G.S. 153A-340(c1). Notably, post-amendment, the statute includes a non-exhaustive list of impermissible development conditions, including taxes, impact fees, residential building design elements within the scope of G.S. 160A-381(h) and G.S. 153A-340(l), stricter driveway-related rules than those provided in G.S. 136-18(29) and G.S. 160A-307, and any other “unauthorized limitations on the use or development of land.”

Similarly, sections 1.14 and 1.15 amend G.S. 160A-382(b) and G.S. 153A-342(b) to clarify the limitation on local government authority to impose conditions on special and conditional use districts and conditional zoning districts. Under the previous law, “only those conditions mutually approved by the [city or county] and the petitioner may be incorporated into the zoning regulations or permit requirements.” G.S. 160A-382(b); G.S. 153A-342(b). Like the amendments in Sections 1.12 and 1.13, these amendments prohibit cities and counties from imposing the same regulations or requirements found in those sections. These amendments also require that the applicant or petitioner consent in writing to any agreed-upon conditions.

Amendments Regarding Curb Cut Regulations (Sec. 1.16)

Section 1.16 amends G.S. 160A-307 to clarify that two conditions must be met in order for a city to enact an ordinance that requires a developer to construct (or reimburse the city for the cost of construction) or dedicate medians, acceleration and deceleration lanes, and traffic storage lanes for driveway connections into any street or alley. “All of the following” must apply:

(1) The need for such improvements is reasonably attributable to the traffic using the driveway;

(2) The improvements serve the traffic of the driveway.

The amendment also prohibits cities from requiring an applicant to acquire right-of-way from property not owned by the applicant but allows the applicant to voluntarily agree to do so. Section 1.16’s amendments apply to applications submitted on or after July 11, 2019, and to appeals from decisions related to such applications filed on or after that date.

Amendments Regarding Conflicting Definitions of “Building,” “Dwelling,” “Dwelling Unit,” “Bedroom,” and “Sleeping Unit” (Sec. 1.17)

Section 1.17 amends G.S. 153A-346(b) and G.S. 160A-390(b). The prior versions of these statutes prohibited county and city development regulations that employed a definition of the terms “building,” “dwelling,” “dwelling unit,” “bedroom,” and “sleeping unit” that was “more expansive” than as defined in another statute or in a rule adopted by a State agency. Section 1.17 strikes out the “more expansive” qualified and amends the statutes such that those enumerated terms may not be given a definition “that is inconsistent” with any definition of the same in another statute or in a rule adopted by a State agency, “including the State Building Code Council.” Essentially, to the extent that these five definitions are included in a city’s UDO, the definitions must now be consistent with the definitions included in the adopted version of the State Building Code.

Conclusion

The vast majority of amendments found in Part I of SL 2019-111 are not groundbreaking. Rather, these amendments are generally intended to clarify or supplement existing law in a way that more closely mirrors the intent and practical application of this state’s land-use and development law.