KS Dev. Co., L.P. v. Lower Nazareth Twp., 149 A.3d 105 (Pa. Commw. Ct. 2016)
A claim that zoning restrictions render development of some use economically infeasible is a claim of de facto exclusion, not de jure exclusion. Where de facto exclusionary claims exist, analysis under Surrick is appropriate. In addition, where a zoning ordinance defines the term “apartment,” and other uses are individually restricted so as to preclude inclusion as an apartment nor included in the definition of apartment, the other uses are not apartments. However, a use permitting residential multifamily/apartment dwelling on upper floors and commercial uses on the first floor is an apartment use.
Developers filed a curative amendment arguing the Township’s zoning ordinance (Ordinance) was invalid because it was de jure exclusionary and, in the alternative, it was de facto exclusionary. Developers sought to cure the supposed constitutional defect in the Ordinance by amending it to permit construction of apartments in the township’s Office Park District. The Board of Supervisors (Board) denied Developer’s request and the trial court affirmed the Board’s decision. On further appeal, the Commonwealth Court affirmed the trial court’s decision.
Developers’ initial challenge was that the Ordinance effects a de facto exclusion of a class of housing. The Court noted the difference between a claim asserting that an ordinance is de jure or de facto exclusionary. Where an ordinance completely bans a particular use, it is de jure exclusionary. However, where an ordinance allows a certain use but applies additional restrictions on the use that have the effect of exclusion or making the provision for the use an illusory one, the ordinance may be de facto exclusionary. Here, Developers conceded the Ordinance permits apartments by right in one district. Further, the Court determined apartments were permitted by right in another. Accordingly, the Ordinance was no de facto exclusionary. Notwithstanding Developers’ own concession, Developers argued where restrictions in a zoning ordinance render a use economically infeasible, the ordinance is de jure exclusionary. The Court held Developers’ point was unpersuasive and that the claim was a de facto exclusionary claim. De facto exclusionary claims for residential uses can be of two types: (i) based on the amount of land available for a class of uses, in which case the test from Surrick and “fair share” arguments come into play or (ii) an inability to develop the residential use due to “unduly restrictive conditions on development.”
Where de facto exclusionary challenges are brought and the Surrick test is implemented, a three-part analysis is used to determine the validity of the claim. The first question is “whether the community is in the path of growth and in a logical place for growth and development.” When analyzing the first element, courts consider a number of factors including, “(1) projected population growth; (2) anticipated economic development; (3) access by major roads or public transportation; (4) the growth and development of neighboring municipalities; (5) proximity to a large metropolitan area; and (6) attempts by developers to obtain permission to build.” With respect to the first element, the Commonwealth Court agreed with the trial court and the Board that the Township was “within the path of growth and highly developed.”
With the first element established, courts move to the second element which calls for a determination of the level of development in the area. Factors considered under the second element include (1) “the municipality’s population density data,” (2) “its percentage of total undeveloped land” and (3) “the percentage of its land available for the class of housing alleged to be unconstitutionally constrained.” The Court noted Developers failed to treat active agricultural uses as developed land. Therefore, the second element was not satisfied and the Court did not need to consider the remaining element – Developers’ claim failed the Surrick test. However, had the first two elements been satisfied, final question is “whether the municipality has provided for its ‘fair share’ of land for the class of housing under consideration.”
Applying the alternate theory for a de facto exclusionary claim for a residential use, the Court had to consider the “basic legal principles governing exclusionary challenges.” Under this analysis, Developers failed “to distinguish between the provision of a use and the provision for a host of variations on the configuration of that use, failed to show that any lack of development of the apartment use within the Township was due to the Ordinance rather than the development of other uses where apartments were permitted, and failed to demonstrate that the Ordinance rendered development of apartments within the Township infeasible rather than simply prevented development of apartments in a manner that would provide [Developers] with the most profitable use of land.” However, the most important failure was that Developer failed to establish the apartment restrictions “were unreasonable and inconsistent with the stated purposed of [the relevant zoning] districts.”
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