Monday, February 22, 2016

Interesting New Book: Zoning Rules! by Fischel

An interesting new zoning book entitled Zoning Rules! The Economics of Land Use Regulation, written by William Fischel, and and published late last year, makes interesting reading to those of us interested in zoning and its impact in the community. Fischel is an economist, but quite knowledgeable about zoning issues, and his book is an interesting story of the impact of local zoning regulations on development, including an overview of the history of zoning as well as how contemporary zoning controls work. One of his interesting historical observations is that the invention of the motorized truck (not the car) made it relatively easy for factories and other possibly inconsistent land uses to move from
downtown railroad stations and docks to areas located further from the center of town. These transplanted uses put new homeowners in the situation where they may have paid a significant sum for the new home but were now faced with the possibility of an inconsistent land use which would drive down the value of the property. In order to control that possibility, zoning “spread like wildfire” across the United States. Fischel at 170-178.

The book has a number of interesting observations along those lines. Another one, which may not be of such general interest to many land use practitioners, but which I was tremendously interested in because of the similarity of New Jersey statutory law with ours here in Tennessee, involves a bit of history from the Garden State. It is well known that New Jersey adopted a state constitutional amendment in 1927 specifically recognizing the validity of zoning and land use planning. The text of the amendment currently reads (it has been changed slightly over the years) as follows:
The Legislature may enact general laws under which municipalities, other than counties, may adopt zoning ordinances limiting and restricting to specified districts and regulating therein, buildings and structures, according to their construction, and the nature and extent of their use, and the nature and extent of the uses of land, and the exercise of such authority shall be deemed to be within the police power of the State. Such laws shall be subject to repeal or alteration by the Legislature.
New Jersey State Constitution, 1947, Article IV, Section VI, ¶ 2.

But what I did not know is that in the years leading up to the constitutional amendment, including 1927 itself, the New Jersey courts emphatically resisted local land use controls, particularly in so far as various land uses were permitted in some areas but not in others. Fischel cites the example of the Oxford Construction Company v City of Orange, 137 A. 545 (NJ 1927) in which the construction company applied for a permit to allow the construction of four 5 story brick apartment houses. The property however was located in a zoning district which was principally for single-family residential use. The lower court case was decided in May 1926, Oxford Construction Company v City of Orange, 4 NJ Misc. 515 (NJL 1926), just before the November 1926 decision of the United States Supreme Court in Euclid v Ambler Realty 272 US 365 (1926). The lower court, citing numerous examples from the Court of Errors and Appeals, concluded that “the attempt to exclude apartment houses from a residential zone is a question which, standing alone, has been met in the various zoning cases and decided adversely to the contention of the [city]. There is no basis for the refusal on this ground of the building …  inspector of Orange to grant a building permit.” Id. at 517.

Once the decision of the US Supreme Court was handed down in Euclid however, one would have felt that on the appeal to the New Jersey Court of Errors and Appeals, that the High Court would soften its stance on the invalidity of such use restrictions. It did not. Instead, the court distinguished Euclid in its May 1927 opinion by pointing out that the US Supreme Court had restricted its opinion such that if
the provisions set forth in the [Euclid] ordinance under review should come to be concretely applied to particular premises, or to particular conditions, or to be considered in connection with specific complaints, some of them, or even many of them, might be found to be clearly arbitrary and unreasonable. Having so stated, then pointed out that the ambler Realty Company did not base its right to the relief prayed for upon the ground of a present infringement upon or denial of a specific right but upon the broad ground that the mere existence and threatened enforcement of the ordinance constitute a present and irreparable injury, and then held that the ordinance, in its general scope and dominant features, was so far as its provisions were involved in the case before the court, was a valid exercise of the police power, and left other provisions to be dealt with as the cases arise directly involving them.
The New Jersey Court was not swayed by the decision in Euclid.

That set the stage for the constitutional amendment in September of that same year. The prevailing powers in the state lost no time in adopting the amendment previously quoted, which in effect overturned the decision of the New Jersey courts in the Oxford Construction Company case. “ ... [M]unicipalities ... may adopt zoning ordinances limiting and restricting to specified districts and regulating therein, buildings and structures, according to their construction, and the nature and extent of their use, and the nature and extent of the uses of land, and the exercise of such authority shall be deemed to be within the police power of the State ...”  There are very few states in the country with a constitutional amendment which specifically provides that zoning and land use regulations are within the police power the state. But given the decisions of the New Jersey courts prior to that time, the constitutional amendment was obviously necessary.

Finally, in October 1927, the court had still not given up. In Robert Realty Co. V City of Orange, 139 A. 54 (NJL 1927), the New Jersey Court of Errors and Appeals yet again reaffirmed its old position:

This appeal brings up for review a judgment of the Supreme Court, directing the issuance of a peremptory writ of mandamus, compelling the granting by the municipal authorities of the city of Orange of a permit to the respondent, Robert Realty Company, authorizing it to erect three apartment houses upon a plot of land owned by it within the municipal limits. The sole ground upon which the appeal is rested is that the zoning ordinance of the city prohibits the erection of apartment houses on the respondent's plot; and that such ordinance is a valid exercise of the police power. The argument in support of the appellants' contention is identical with that which was submitted on their behalf in the case of Oxford Construction Co. v. City of Orange et al., 137 A. 545 (not yet officially reported), wherein the same question was presented. For the reasons stated in the cited case, the judgment under review will be affirmed.

But the court did acknowledge the constitutional amendment:
We deem it proper to point out that the judgment now before us was rendered some nine months prior to the adoption by the people of our state of the amendment to our Constitution, which declares that zoning ordinances similar to that involved in the present case shall hereafter, when legally adopted, be deemed to be within the police power of the state; and that, consequently, its validity is not affected by the subsequent change in our fundamental law.
Robert Realty Co. v. City of Orange, 103 N.J.L. 711, 712, 139 A. 54, 54-55 (1927).

And in something of a humorous postscript to this series of events, the New Jersey Court once again cited the Oxford Construction Company case in a decision in 1929 as follows:

There is nothing in the record to rebut the presumption that the ordinance is a reasonable exercise of the police power. Oxford Construction Co. v. Orange, 103 N. J. Law, 355, 137 A. 545.

Robert L. Evans, Inc. v. Williams, 148 A. 206, 206 (N.J. Sup. Ct. 1929). In the Evans case, the application by the property owner to require the issuance of a building permit for a use which was in violation of the zoning regulations was denied. Finally, based on the constitutional amendment, the New Jersey Court bowed to the constitutional imperative.

In any event, the Fischel book is very interesting and well worth reading. I have not yet finished the entire book, but look forward to continuing my reading.

Here’s a quick timeline of the events in New Jersey:

May 1926   Lower Court Opinion in Oxford Construction Company
                   (can't keep apt out of single-family area)
Nov 1926    US Supreme Court decides Euclid v Ambler Realty
May 1927   Court of Errors and Appeals affirms lower court in Oxford Construction
Sept 1927   NJ Constitutional Amendment relating to zoning and land use planning
Oct   1927   Court of Errors and Appeals decision in Robert Realty Co.
                    (can't keep apt out of single-family area)
Dec 1929    Court of Errors and Appeals decision in Robert Evans, Inc. v. Williams
                    (Separation of land uses is constitutionally valid)

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