Daily Development for Wednesday, January 14, 2004 by: Patrick A. Randolph, Jr. Elmer F. Pierson Professor of Law UMKC School of Law Of Counsel: Blackwell Sanders Peper Martin Kansas City, Missouri dirt@umkc.edu Today's DD is taken largely from the excellent "Real Estate Update" Newsletter of the Blank Rome in Philadelphia, Pennsylvania. ZONING AND LAND USE; EXCLUSIONARY ZONING: Pennsylvania Supreme Court Sets standards for minimum lot size ordinances, strikes down "Agricultural Preservation" zoning scheme. C & M Developers, Inc. v. Bedminster Township Zoning Hearing Board, No. 171 MAP, 820 A. 2d 143 (Pa. Supreme Crt. November 1, 2002). The Pennsylvania Supreme Court has ruled that a Bedminster Township ordinance regulating lot sizes was unconstitutional because it was not substantially related to the Township's general welfare interest in preserving its agricultural lands and activities. The ordinance provided that landowners of a tract containing 10 acres or less may subdivide into lots of 80,000 square feet, while owners of more than 10 acres cannot subdivide without soil analysis and, then may only develop parts of the tract in lots of at least one contiguous acre. The stated purpose of the ordinance was to preserve prime agriculture and farmland and to provide for the orderly development of the Community." The ordinance: (1) established an Agricultural Preservation District which covers approximately 90% of the Township, and (2) eliminated two residentially zoned districts, which had allowed for development of single-family detached dwellings on lots of 80,000 square feet, and (3) eliminated a scenic district, which had allowed for the development of single-family detached dwellings on two-acre minimum lots. The ordinance also provided for the expansion of the R-3 Residential District, as a means of accommodating future needs for development of homes. In the Agricultural Preservation District, the landowner was first required to identify those portions of a tract that qualified as prime farmland and other types of farmland, and was then required to set aside for agricultural uses and not develop or subdivide either 60% or 50% of the tract that qualified as farmland (which percentage depended on the category of farmland.) Other restrictions limited the portion of a lot that could be developed as a residence. In addition, the percentage that was to be reserved as "non-buildable" had to be transferred from the owner or dedicated to the Township, a conservation organization or other organization in order to protect its future use for agricultural purposes. C & M developers objected to the ordinance on the grounds that its plans to develop 461 single-family homes on a 200-acre tract would be limited to 57 homes. C&M maintained that the ordinance effectively limited it, as landowner of more than 10 acres, to developing approximately one single-family home for every three acres. Justice Russell M. Nigro, writing for a unanimous court, held that the ordinance was unduly restrictive or exclusionary, and that the public purpose served by the ordinance did not completely outweigh the landowner's right to do as it sees fit with its property. The Court quoted with approval statements in earlier decisions that while minimum lot size requirements may be justified in certain circumstances, "at some point along the spectrum" the size of lots ceases to be a concern requiring public regulation and becomes simply a matter of private preference. In reaching his conclusion, Justice Nigro took care to clarify the standard of review in Pennsylvania for analyzing ordinances that restrict lot size. He analyzed the long line of decisions on this issue going back to Justice Roberts' decision in Concord Township Appeal, 268 A2d 765 (Pa 1970), in which Roberts concluded that an ordinance with a minimum size restriction of two acres is unreasonable and invalid unless the municipality can show that it is supported by an "extraordinary justification." That standard has been followed in several cases, and Justice Nigro pointed out that the Concord opinion should never have been a binding precedent because four of the seven Justices did not join Justice Roberts? lead opinion. Justice Nigro rejected the extraordinary-justification standard and adopted what he referred to as the "traditional standard of review." He pointed out that the proper standard of review in Pennsylvania courts for zoning ordinances is that they are presumed valid unless a challenging party can establish that they are "unreasonable, arbitrary, or not substantially related to a police power." Justice Nigro supported the landowner's arguments and held that the Township failed to sustain even this lower standard of evidence needed to justify the ordinance. Although the Township has an interest in preserving its agricultural lands, that interest did not outweigh the landowner's right to use its property as it saw fit. He found that after complying with the ordinances and complying with set-aside restrictions, the landowner could be left with using only approximately half of its initial tract or subdivision for development. In addition, a portion of that remaining tract, could contain areas not suitable for development, such as wetlands, floodplains, or steep slopes. The ordinance further imposed a minimum one-acre lot size on the area that the landowner was permitted to develop, and required that such lot be free of watercourses, floodplains, floodplain soils, wetlands, lakes or ponds. All these restrictions, when required in addition to the set-aside restrictions, not only unduly limit the landowner's ability to sell, subdivide or develop that portion of the tract left over, but also do not have a substantial relationship to the Township's interest in preserving its agricultural lands and activities, or any other general welfare interest of the Township. Justice Nigro stated: Where, as here, the Board has not articulated any reasons for requiring landowners developing the "buildable site area" of their property to build homes on lots that are a minimum size of one acre beyond its belief that one acre was a "good number" which would forestall the development of large houses on small lots, we are compelled to ascribe an exclusionary purpose to that requirement. While we acknowledge that the Township has a legitimate interest in preserving its agricultural lands, we find that by requiring landowners of tracts greater than ten acres to set aside between fifty and sixty percent of the agriculturally productive land on their tracts, the Township reasonably meets that interest. By also limiting a landowner to developing homes on one-acre minimum lots on a buildable site area, however, the Township is no longer attempting to preserve agriculture, but rather is improperly attempting to exclude people from the area and so doing, is unreasonably restricting the property rights of the landowner. Thus, as the ordinances? minimum lot size requirement is an unreasonable restriction on a landowner?s right to use his property and not substantially related to the Township's interest in preserving its agriculture lands, we find that the ZHB abused its discretion is sustaining the amended Zoning Ordinance as constitutionally valid." Reporter's Comment: This case gives support for municipalities that require landowners to set aside at least sixty percent of their land for agricultural use. However, it seems that based on the C & M Developers decision, municipalities that intend to establish zoning requiring one-acre, or more, sized lots will have their work cut out for them, particularly if they impose set-aside restrictions. Municipalities will have to overcome challengers' arguments that the ordinance is "unreasonable, arbitrary or not substantially related to the police power." But to do that, municipalities will apparently have to articulate how large acre zoning serves more than an exclusionary purpose