Use Variances: Takings issues

Recently, in Hejna v Board of Appeals of Village of Amityville, 2013 WL 1442463 (NY App Div 4/10/2013), the New York Appellate Division reversed the decision of the local zoning board granting any use variance. Although this is certainly not new law in New York, and bearing in mind that New York allows both use and bulk variances, the holding this case is interesting in that it follows the established rule in New York that in order to obtain the use variance, the landowner must show, based on competent financial evidence, that it cannot yield a reasonable rate of return absent the requested variance.

In the New York case, it was clear that there was no proof at all of any financial nature which would demonstrate the property owner’s inability to obtain a reasonable return on investment. In effect, the New York courts permit this as an administrative means of demonstrating a taking of the property.

Here in Tennessee, there have been a couple of cases over the years which have suggested that in Tennessee, even when granting a variance to bulk regulations (and in Tennessee, as I have frequently said, use variances are most likely illegal anyway) there needs to be some showing that the property is incapable of financial return in the absence of a variance. I have always believed that this adds a component which is not in the enabling legislation and as a result is inappropriate. It also worries me inasmuch as it is very difficult for the judiciary to understand when there is a taking of property; it is that much more difficult for a zoning board, composed mostly of lay members, to understand what a taking might be. Thus, adding that requirement onto the difficult requirements that are already statutorily required (for example, see Tenn. Code Ann. §13-7-207 (3)) makes it a lot harder to get a variance in Tennessee, and it’s already hard enough.

If you have to show all the other things that are required here in Tennessee and that the financial return is insufficient on top of that, it just becomes almost impossible. And it’s pretty close to impossible now. Let’s not add another requirement that is not statutorily mandated.