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  • Writer's pictureW. Cory Reiss

Rezoning challengers face steeper hill in development battles.

Some say you can’t fight City Hall, but that’s not really true. You can, but the battlefield is decided in a courthouse.

And judging from a June 7 decision by the North Carolina Court of Appeals, legal traps and obstacles are proliferating to hinder property owners’ ability to fight rezoning decisions that favor denser development, noise, traffic, and pollution.

In the process of affirming dismissal of a property owner’s challenge to rezoning a neighboring tract, Justice Darren Jackson took pains to highlight very specific ways in which decades of precedent have been undercut by decisions handed down in recent years. The issue is when a neighboring property owner has “standing” to challenge the rezoning of a nearby or neighboring tract by alleging sufficient injury from the municipality’s decision.

The upshot of the opinion is that contrary to previous decisions that gave neighboring property owners standing to challenge rezoning decisions based on relatively broad standards, challengers now must show they would suffer “special damages” distinct from any injury suffered by the public at large, thanks largely to decisions imposing the special damages requirement on challengers beginning in 2008. Special damages are monetizable and calculable injuries that result from a rezoning decision, which includes the reduction in value of the challenger’s land because of increased traffic and other negative impacts from the newly permitted use.

Alleging the existence of such special damages isn’t necessarily a major hurdle by itself, but Justice Jackson also highlighted the fact that property owners used to be able to testify about the value of their own property without needing an expert witness based on “over 100 years” of precedent “that the opinion of an owner of real property was presumptively competent evidence of this value.” Thanks to a 2017 opinion by the state Supreme Court, he said, such opinions are no longer sufficient.

The result in the case decided June 7, Violette v. Town of Cornelius, was that the law as it has been recently altered required dismissal of a rezoning challenge because the neighbor who brought it was relying on his own opinion that his property would be reduced in value due to the traffic, noise, and other impacts from the use being permitted. The owner’s opinion wasn’t enough. Without sufficient evidence of special damages in the form of diminution in value, the neighbor could not show standing to challenge the rezoning.

As a practical matter, then, rezoning challenges are more difficult for neighboring property owners even though logic and precedent older than five years would suggest a sufficient injury from newly allowed uses. Pleading these cases to survive early motions to dismiss is getting progressively trickier, and surviving later motions is getting progressively more expensive. One major advantage to relying on an owner’s opinion, which always needed to be based on some underlying factual knowledge of the relevant real estate market, is that the challenger doesn’t need to commit thousands of dollars on expert analysis and testimony to make the required showing. Those days appear to be gone.

It's worth noting that Court of Appeals decisions are rendered by a panel of three judges who are randomly assigned to cases. In this one, Justice Jackson, a Democrat, was tasked with drafting the opinion and his two fellow panelists, both Republicans, merely concurred “in the result only” without comment. While outsiders cannot know why such distinctions are made, the opinion’s pointed contrast between long-standing precedent and more recent deviations against the interests of zoning challengers seems prone to ruffle partisan, or at least philosophical, feathers. A 2018 decision and a concurring opinion that Jackson pinpoints for a significant evidentiary shift were written by conservative panelists, and the Democrat on that panel concurred in the result only, without comment.

In any event, you can indeed fight City Hall, but beware of landmines buried in the halls of justice.


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