Zoning Work: A Crucial Part of the Community Acquisition Process

Housing Policy ZONING WORK: A Crucial Part of the Community Acquisition Process

by Ferd Niemann

WWhen purchasing property, one of the most important due diligence tasks to complete is researching the zoning designation and applicable city/county code restrictions.

If the property complies with all applicable code standards that apply to the specific zoning designation, then the property is considered legal conforming. That’s great! (most of the time) However, if the property has any code violation it is considered nonconforming at best. This can be a common occurrence for manufactured home community properties because these properties were often developed over 50 years ago, much earlier than and ordinances regarding mobile or manufactured homes.

This means that even though the property or its use is not in compliance with the current city code, it may fall into the category of “legal nonconforming”.

What is Legal Nonconforming?

The term legal nonconforming means the real property and/or structure or building on the property may be exempt from zoning standards that do not predate the age of the use of the property. In other words, it is considered as having “grandfathered rights”. These rights are limited to the specific nonconforming use at the time the new code or amendment takes effect, rendering the previously legal property to be a legal nonconforming property. While the nonconforming use may continue, it cannot be exacerbated by extension or expansion of the use, otherwise the city will likely require the use to conform to the current code of ordinances. In many cases, city codes also contain provisions that restrict repairing the property to the nonconforming use if the damage is more than 50% of the property value. This gets hairy when municipalities take the position that infill of homes is a “development” »

or “expansion,” and also when they attempt to impute age or size restrictions.

For example, let’s suppose a property predates the enactment of the city code and the homes in the park have setbacks from the property line of five feet, which complied with the 1990 code. In 2020, the city amended the code to require 20 foot setbacks from the property line. Now the homes in the community are considered nonconforming to the code. Despite this nonconformity, the setbacks complied with the previous code requirements, therefore, the property is considered legal nonconforming and may be permitted to continue its use as-is. If the community is expanded, further developed, substantially repaired, or altered, the park or homes within the park post2020 amendment then the park will likely be required to conform to the current amended city code.

Operating a Legal Nonconforming Property

The allowance of a property to continue operating its legal nonconforming use does have some reasonable restrictions. As stated above, the permitted nonconforming use may not be exacerbated via extension or expansion without conforming to the current code. The city may decide to terminate an owner’s legal nonconforming status if the property or its use is considered abandoned, a nuisance, or harmful to the public health, safety, or welfare. An owner may also voluntarily surrender his or her legal nonconforming status by rezoning the property or participating in a planned unit development process (a form of abandonment). This means that the property forfeits its grandfathered rights and now must comply with the current zoning codes and ordinances.

Despite a manufactured home community meeting the legal nonconforming use standard, some cities still push back on allowing the properties to continue operating. Regular opposition is in the form of NIMBY (Not In My Backyard) cities and neighbors.

When municipalities resist the continued operation of a legal nonconforming use, many community owners or operators think the only option is to sue the city. The first attempt should be to communicate, argue, negotiate, and down right arm wrestle with the city, a kind of crap shoot that can be successful but it is hard to bet on. Instead, there are three primary options to avoid litigation when a local government is not cooperating or refuses to permit your property status or rights as legal nonconforming entity: 1) rezone the property; 2) receive a conditional or special use permit; or 3) receive a variance.

Rezoning property will change the use of the property and voluntarily surrender all legal nonconforming status of the property. This can occur by downzoning the land use of the property, or rezoning the land use to a planned unit development district (PUD).

Downzoning is the formal process of lowering the intensity of the use of the property, such as downzoning from a multi-family residential district to a single-family residential district. While the use is still residential, the zoning classification has changed from R-3 to R-1, for example. A PUD is the formal process between an owner and the city that typically results in the owner creating their own zoning district. This allows landowners the opportunity of negotiating the applicable zoning provisions of the code. Typically, this type of rezoning process requires: 1. Payment of an application fee 2. Conducting neighborhood meetings to discuss the rezone 3. Discussions with city staff 4. Presentation of the development plan 5. Applying for approval through the city planning commission and city council

Conditional or special use permits are an exception or permitted use granted by a city, so long as the conditions within the district are compliant. This is a mechanism that cities use to permit certain use types within a designated district. Similar to legal nonconforming uses, CUPs cannot be exacerbated in any way. Many zoning codes include provisions of what uses are eligible for a CUP, including details on the conditions the property must meet to be granted a CUP. For example, it is common for city codes to preclude commercial businesses within residential neighborhoods. This is a reasonable restriction for an autobody repair shop. However, an artisan bakery would not pose the same concerns of damaging the surrounding residential property values. As such, a city may decide to grant a CUP to open an artisan bakery in the residential neighborhood, but the applicant would be subject to certain limitations or

restrictions, like limiting signage, requiring regular hours of business, prohibition of street parking.

Application for Variance

A variance is an exception to a rule or code provision that is granted due to an undue hardship that is not the owner’s fault. Variances are issued by the local administrative body, such as a zoning board or city planning commission. There are two types of variances: An area variance and a use variance. An area variance is when the use does not conform to the provision in the code (i.e., permitting a home that has a setback requirement of 30 feet to remain at 15 feet away from the road). A use variance is for uses in operation that are not permitted in the zoned area (i.e., a gas station within an R-1 single-family residential zone).

To receive a variance, the landowner must show there is undue hardship that is not their fault, and it would be unjust to enforce the relevant zoning requirements. Here, an applicant would need to pay the application fee and present the argument during an administrative hearing. Before applying for a variance, it is helpful to research whether others have previously requested a similar variance and been awarded one to show the likelihood of success.

As you can see from the analysis above, zoning research is essential when purchasing a property. It is not the end of the world if the property is designated as nonconforming with the municipal code or ordinances. There are avenues that will allow the continued use of the property, but it is important to take the proper steps to avoid losing the legal nonconforming use or grandfathered rights that the property had acquired over time. MHV

Ferd Niemann is an MHP owner/operator and lawyer, based out of Kansas City. He has acquired over 1,300 homesites for his portfolio while also serving more than a hundred MHP owners/operators as clients. He can be reached and his podcast can be found at www.themobilehomelawyer.com.

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