LAND USE UPDATE

Case Law Update

Court Finds Substantial Burden under Federal Religious Land Use and Institutionalized Persons Act

Micah’s Way v. City of Santa Ana, 2023 WL 4680804 (C.D. Cal. June 8, 2023), refused to dismiss a complaint that the city violated the Religious Land Use and Institutionalized Persons Act (RLUIPA) by substantially burdening the religious activities of a religious organization. RLUIPA preempts local zoning by providing that “No government shall impose or implement a land use regulation in a manner that imposes a substantial burden on the religious exercise of a person, including a religious assembly or institution” unless the burden furthers and is the least restrictive means of furthering a “compelling governmental interest.” 42 U.S.C. § 2000cc. “Land use regulation” means a zoning law that limits the use or development of land. Id. § 2000cc-5(5).

Micah’s Way, a faith-based Christian ministry, delivers canned food to needy families and snacks and beverages to persons at their Resource Center. After neighbors complained about a needle exchange program that opened two doors away, the mayor directed top city officials to remedy the “acute effect” that Micah’s Way and the needle exchange program have on the neighborhood. After these officials instructed their subordinates to compel these organizations to move or severely curtail their operations, the police department staked out Micah’s

Way and carried out other harassing activities. The city also cited Micah’s Way for code violations and threatened it with “appropriate action.” The mayor expressed his antagonism at a neighborhood meeting. Next, the city refused a Certificate of Occupancy (COO) unless Micah’s Way discontinued food distribution, ignoring a successful appeal to a hearing officer. Finally, Micah’s Way sued the city.

Micah’s Way plausibly alleged that its food distribution activities were “religious exercise” as defined by RLUIPA. They were “an “important part of its Christian ministry” and a “religious path” followed by its members. Micah’s Way also plausibly alleged that the city’s ban on its food distribution activities constituted a “substantial burden” because the city put “substantial pressure” on it to “modify [its] behavior and to violate [its] beliefs.” The city threatened Micah’s Way with “administrative fines” and “criminal prosecution” if it continued to distribute food, and the city continued to refuse Micah’s Way a COO unless it ceased its services for poor and homeless individuals.

Any readily available alternatives would cause “substantial uncertainty, delay, or expense.” Micah’s Way could not relocate because it could not afford to move, and the mayor opposed its operating “anywhere else in the city.”

This case is a good example of zoning strategies that municipalities can use to block religious activities by religious organizations. The Eleventh Circuit has made the substantial burden test even easier to meet. Vision Warriors Church v. Cherokee County Board of Commissioners, 2024 WL 125969, at *8 (11th Cir. Jan. 11, 2024) (“substantial burden inquiry does not require a Plaintiff to establish an ‘unmet’ religious need in the community, and its religious exercise need not be completely hamstrung to meet the substantial burden threshold”).

Court Refuses Summary Judgment on Complaint that Growth Management Ordinance Violated Federal Fair Housing Act

In Brookline Opportunities, LLC v. Town of Brookline, 682 F. Supp.3d 168 (D.N.H. 2023), the court refused summary judgment on a complaint that moratorium and growth management ordinances violated the Fair Housing Act (FHA) by discriminating against familial status. The FHA prohibits discrimination based on familial status because it is unlawful to “refuse to sell or rent . . . or otherwise make unavailable . . . a dwelling to any person because of race, color, religion, sex, familial status, or national origin.” 42 U.S.C. § 3604(a). The FHA applies to zoning because it makes it unlawful to make a dwelling “otherwise unavailable” to persons protected by the law.

The plaintiffs were developers who planned to build rental workforce housing, which state law requires each municipality to build and which must be affordable for a three-person household with no more than 60 percent of the median income in the county where it is located. Brookline officials and many residents quickly mobilized to oppose the project. At a special town meeting, residents adopted a one-year moratorium on building permits for new housing, thereby blocking the plaintiffs’ project. The rationale of the moratorium was that “continued development will significantly impact the ability of the Town of Brookline to provide adequate school services.”

Brookline residents adopted a Growth Management Ordinance (GMO) following a study committee report that a “rapid growth rate” would strain school services by raising enrollment. The GMO capped the number of residential building permits available each year, required phasing for developments with more than two proposed dwelling units, and allowed only six permits in a project’s first year and five in each subsequent year. These restrictions required an 80-unit project like the plaintiffs’ to take a minimum of 16 years to complete and precluded financing with low-income housing tax credits.

School capacity was the express reason for enacting the moratorium and GMO. The ordinances were facially and generally applicable, operated by reducing allowable residential construction for all, and did not apply facially in a different way to families with children, either directly or by proxy.

Neither were the ordinances invalid on their face because they had a discriminatory purpose. The town’s stated concern about the impact of residential development on school services was not a mere proxy for familial status discrimination. School impact is not merely a “technical” substitution for families with children.

Neither was facially neutrality destroyed by direct evidence that the town adopted the moratorium and GMO with “an intent to limit housing opportunities for families with children.” Statements in the ordinances and by Planning Board members that the town adopted the ordinances to manage growth in Brookline’s schools did not qualify as direct evidence of discriminatory animus nor as an aversion to families with children. New Hampshire law recognizes that local communities have a legitimate interest in managing growth in their schools.

Brookline could have been brought as a case of discriminatory racial impact. The US Supreme Court has held that discriminatory racial impact is actionable under the FHA. Texas Department of Housing & Community Affairs. v. Inclusive Communities Project, Inc., 576 U.S. 519 (2015). The moratorium and GMO had a discriminatory racial impact. They fell more heavily on Black and Latino minorities than on whites because Black and Latino minorities have incomes lower than whites, and the moratorium and GMO blocked housing intended for households with 60 percent of median income. The town’s reliance on school problems for non-discriminatory purposes is suspicious because the town discovered these problems only after the developers proposed affordable housing.

In a comparable case, the Second Circuit found disparate racial impact when a county rejected rezoning for a 300-unit, mixed-income development where several minorities would likely have been tenants and adopted singlefamily and townhouse zoning instead. Mhany Management, Inc. v. County of Nassau, 819 F.3d 581 (2d Cir. 2016).

Court Upholds Denial of Certificate of Appropriateness for External Façade Alteration in Historic District

Kirwan v. City of Deadwood, 990 N.W.2d 108 (S.D. 2023), upheld the denial of a certificate of appropriateness for altering a historic façade in a historic district. As authorized by state statute, the city created the Deadwood Historic District and Historic District Commission. After establishing a historic district, the statute charges the Historic District Commission to approve or deny a certificate of appropriateness for the alteration of the “exterior portion of any building” located within a historic district. S.D. Codified L. § 1-19B-42.

A saloon owner in the Historic District covered his building’s existing facade with unpainted rough-hewn wood vertical slats made from pine trees harvested from the Black Hills. This exterior alteration differed from the initial painted horizontal wood lap siding design. The alteration reflected the “boomtown” look of buildings built before 1879, but the saloon was constructed after 1879, and the exterior alteration was inconsistent with the more modern design of buildings constructed after that time. The saloon owner applied to the Historic District Commission for a certificate of appropriateness.

The Historic Preservation Officer reviewed the application and submitted a staff report to the Historic District Commission, concluding that “the proposed work ... does encroach upon, damage or destroy a historic resource and has an adverse effect on the character of the building.” At the Historic District Commission hearing, he cautioned that “altering these traditional elements by introducing non-painted materials and stylistic elements as proposed” would be incompatible with the building’s historic character. The Historic District Commission refused to issue the certificate, and the circuit court affirmed.

On appeal, the supreme court first had to decide on the judicial review standard because the statute authorized appeals from Historic District Commissions but did not prescribe a standard of judicial review. To fill this gap, the supreme court prudentially adopted a clearly erroneous judicial review standard. It observed that this standard is a familiar and acceptable means for routinely reviewing factual findings, which acknowledges a fact-finder’s advantage for weighing evidence and the limitations of a reviewing court.

The supreme court added that the “clearly erroneous” standard fits somewhere between de novo judicial review with no deference and “substantial evidence” judicial review with considerable deference. A court should reverse using clearly erroneous review only if it is definitely and firmly convinced that the Historic District Commission has made a mistake. Other courts differ and have adopted a substantial evidence standard of judicial review for reviewing historic district commission decisions.

The supreme court next considered the statutory “general factors” a Historic District Commission “shall” consider when it decides whether to approve a certificate of appropriateness. These are the architectural design of the resource and its proposed alteration; its historical significance, condition, and general appearance; the size of the resource and its materials; how these factors relate to and affect the immediate surroundings and “the district as a whole and its architectural and historic character and integrity;” and “the location and visibility of the alteration and resource.” A Historic District Commission must also consider the “compatibility” of an “exterior alteration” with historic and related resources and the original design. These statutory factors are based in part on the district’s historic character, but they allow a Historic District Commission considerable discretion when making decisions.

The supreme court decided that a Historic District Commission does not have to consider every statutory factor when making a decision and does not have to issue discrete, corresponding factual findings. Without discussing the exterior alteration in detail, the court deferentially held that the Historic District Commission considered the relevant factors in its decision and that considering similar federal standards was not a basis for reversal. This case has important implications for hearings before Historic District Commissions in South Dakota. It means that applicants who apply for a certificate of appropriateness must prove their case in their hearing before the Historic District Commission because judicial review is limited.