Legal Definitions - contract zoning

Contract zoning refers to a specific agreement made between a local government body and a landowner concerning a change or exception to the zoning rules for a particular property. This practice has evolved over time, leading to both legally permissible and impermissible forms.

The concept generally divides into two main types:

• Legitimate Conditional Use Zoning: This is the legally permissible form. It involves a unilateral promise from the landowner to the governing board. The government body approves a zoning change, a special permit, or a variance, but only if the landowner agrees to specific conditions. These conditions must be directly related to the proposed development and are intended to mitigate its potential negative impacts on the community, such as traffic, environmental concerns, or compatibility with surrounding properties. The government's decision is based on these public welfare improvements.
• Illegitimate Contract Zoning: This is the legally impermissible form. It occurs when there is a bilateral agreement or a "quid pro quo" (something for something) between the landowner and the government. In this scenario, the government grants a zoning change or exception in direct exchange for a specific benefit from the landowner that goes beyond mitigating the impacts of the development itself. This is generally unlawful because zoning decisions should be based on comprehensive planning and the public good, not private negotiations or unrelated benefits.

Here are some examples to illustrate the distinction:

• Example 1 (Legitimate Conditional Use Zoning): A developer wants to build a large shopping center in an area currently zoned for light commercial use, which would require a zoning amendment. The local planning commission expresses concerns about increased traffic congestion and the loss of green space. The commission agrees to approve the zoning amendment on the condition that the developer funds and constructs a new traffic signal at a nearby intersection, widens an adjacent road, and dedicates a portion of the property as a publicly accessible park with walking trails.

  This illustrates legitimate conditional use zoning because the developer unilaterally promises to undertake specific actions (traffic signal, road widening, public park) that directly mitigate the anticipated negative impacts of the shopping center (traffic, lack of green space) on the community. The city's decision is based on these public welfare improvements, not a private exchange for an unrelated benefit.

• Example 2 (Illegitimate Contract Zoning): A property owner seeks a zoning variance to convert a historic residential building into a boutique hotel in a neighborhood strictly zoned for residential use. The city council agrees to grant the variance only if the property owner makes a substantial donation to a specific city-sponsored charity unrelated to the hotel's impact, or agrees to purchase a specific piece of city-owned land at an inflated price that the city has been trying to sell.

  This is an example of illegal contract zoning because the city's decision to grant the variance is tied to a direct, unrelated benefit (charity donation, inflated land purchase) for the city, rather than conditions designed to mitigate the impact of the hotel on the residential area. It represents a private deal rather than a public planning decision based on zoning principles.

• Example 3 (Legitimate Conditional Use Zoning): A biotechnology company wishes to construct a research and development facility in an industrial park that has strict limits on building height and impervious surface coverage to manage stormwater runoff. The company requests a variance to exceed these limits. The city's planning board agrees to grant the variance provided that the company installs advanced stormwater management systems that exceed standard requirements, implements a comprehensive landscaping plan with native plants to absorb runoff, and contributes to a local fund for maintaining public infrastructure in the industrial park, directly related to the increased strain its larger facility might impose.

  This demonstrates legitimate conditional zoning. The conditions (advanced stormwater systems, landscaping, infrastructure fund contribution) are directly related to mitigating the environmental and infrastructure impacts of the company's larger facility. The company's promises are unilateral and serve to address public concerns arising from the proposed development, making the zoning modification permissible.