Commonwealth Court Upholds Property Owners’ Rights and Finds Zoning Ordinance Amendment To Be ConfiscatoryJune 2014 – Articles In the Zone
In Pennsylvania, municipal governments have the authority to adopt and amend zoning regulations at their discretion. One issue that occasionally arises when municipal governments take such an action is the impact or effect of those regulations on properties that are subject to an agreement of sale or are a part of an ongoing negotiation for the sale of the property. The applicability of newly adopted zoning regulations could prohibit the use contemplated by an equitable owner or a prospective purchaser. While the determination as to the impact or effect of newly adopted zoning regulations will clearly depend upon the facts of each particular case, the Pennsylvania Commonwealth Court has recently rendered a decision that upholds and supports the rights of property owners.
In the case of Henry Nowicki and Barbara Nowicki v. Zoning Hearing Board of Borough of Monaca, et al., the Commonwealth Court determined that a zoning ordinance amendment was confiscatory as applied to the property of Mr. and Mrs. Nowicki. In this case, Mr. and Mrs. Nowicki purchased .176 acres of land along Atlantic Avenue in the Borough of Monaca, Beaver County, Pennsylvania. Two days before Mr. and Mrs. Nowicki signed the agreement of sale to purchase the property, the Borough of Monaca adopted an ordinance under which the zoning of the property was changed from R-2, Single Family and Two-Family Residential District, to the Planned River-Oriented Development District (PROD). For lots with a minimum area of 7,500 square feet, the PROD Ordinance permitted properties to be used for public and noncommercial recreation. However, Mr. and Mrs. Nowicki proposed to construct a single-family residential dwelling. Although the subject property had previously contained a residential dwelling, the building was destroyed by fire and demolished by the predecessor-in-interest to Mr. and Mrs. Nowicki. Therefore, at the time of acquisition, the property was vacant.
Following their acquisition of the property, Mr. and Mrs. Nowicki applied to the Zoning Hearing Board for a Use Variance to obtain approval to construct the proposed single-family dwelling on the property. Representatives from the Borough of Monaca appeared in opposition to the application of Mr. and Mrs. Nowicki. Following a hearing, the Zoning Hearing Board of the Borough of Monaca denied the request for a variance.
Thereafter, Mr. and Mrs. Nowicki filed an appeal to the Beaver County Court of Common Pleas contending that the decision of the Zoning Hearing Board denying the Use Variance was confiscatory and denied all economically viable use of the property. In response, the Zoning Hearing Board argued that the ordinance was not confiscatory because it permitted the use of the property for non-commercial and public recreation. Following a hearing, the Court of Common Pleas of Beaver County reversed the decision of the Zoning Hearing Board and concluded (1) that the zoning ordinance amendment created an unnecessary hardship, (2) the unnecessary hardship had not been created by Mr. and Mrs. Nowicki, (3) the variance would not alter the essential character of the neighborhood, nor be detrimental to the public welfare, (4) the variance amounted to the minimum variance that would afford relief and (5) that the refusal to grant the variance amounted to a confiscation of the property. Both the Zoning Hearing Board of Monaca Borough and the Borough of Monaca appealed the decision to the Commonwealth Court.
In support of its appeal, the Borough of Monaca argued that Mr. and Mrs. Nowicki failed to establish that the zoning ordinance rendered their property valueless for any permitted use that would amount to an unnecessary hardship by confiscation and that any hardship was created by Mr. and Mrs. Nowicki. In its decision, the Commonwealth Court reviewed the criteria of Section 910.2 of the Pennsylvania Municipalities Planning Code (MPC) and discussed the criteria to be applied in variance cases, whether the variance is requested for use, dimension or validity. Specifically with respect to a “validity” variance, the court noted that such variances exist in situations where the ordinance has so strictly regulated a particular property so as to become confiscatory. The court held that an applicant seeking to establish that an ordinance is confiscatory must show that (1) the effect of the regulation complained of is unique to the property and not an effect that is common to other lands in the area and (2) the regulation deprives the owner of the use of the property. The key distinction in a validity variance case is that the unnecessary hardship upon the property is created by the unique effect of the zoning regulation rather than the unique physical circumstances or condition of the property.
Upon review of the PROD Regulations and the facts relating to the Nowicki property, the Commonwealth Court held that the evidence established an unnecessary hardship as a result of the burden placed upon the property by the zoning regulations. Although the zoning ordinance allowed a use of the property for public and noncommercial recreation, the zoning regulations did not allow for a reasonable use of the property. In examining the remaining criteria of Section 910.2 of the MPC, the Commonwealth Court concluded that the size of the property and its location within a predominantly single-family residential area resulted in the property being unmarketable for an economically viable recreational use. The surrounding single-family homes supported the position of Mr. and Mrs. Nowicki that the construction of a single-family residential home on the subject property would not be detrimental to the public welfare, would blend harmoniously into the surrounding neighborhood and would be the minimum variance that would afford relief while allowing a reasonable use of the property. Finally, the Commonwealth Court held that the hardship affecting the subject property was not created by Mr. and Mrs. Nowicki. Accordingly, the Commonwealth Court concluded that the zoning ordinance amendment adopted by the Borough of Monaca was confiscatory, created an unnecessary hardship that was not self-inflicted by Mr. and Mrs. Nowick, and affirmed the decision of the Beaver County Court of Common Pleas, which reversed the decision of the Zoning Hearing Board of the Borough of Monaca.
While the Nowicki decision is good news for equitable owners or prospective purchasers who experience a change in the zoning regulations applicable to a particular property, it is important to note that the Commonwealth Court’s decision is highly fact dependent. Therefore, the ultimate determination as to whether an equitable owner or a prospective purchaser would obtain the same success as Mr. and Mrs. Nowicki will depend upon the specific facts of each case.