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Money & the Law: Zoning issues become politically and legally complex

Mark Twain said: “Buy land. They’re not making it anymore.” However, the use of land is regularly evolving, and one of the many legal tools that causes this to happen is zoning.

So what is zoning? It is a set of rules, most often established by a local government entity in the form of an ordinance, that places land into three broad categories of use — residential, commercial and industrial. There are then multiple subsets of rules regulating such things as lot sizes, setbacks, structure types and dimensions, off-street parking, landscaping and other land use attributes.

Zoning took off in the first part of the 1900s. Prior to that, regulation of land use came largely from the law of nuisance — restrictions on the use of land that had an adverse effect on neighboring land like, say, feed lots or blasting from mining operations. The history of zoning is clear that, in the beginning, its primary function was to protect single-family neighborhoods from intrusion by apartments and other uses thought to be adverse to the interests of owners (and developers) of single-family homes. (Arguments can be made that this is still the primary function of zoning.)

Zoning, of course, has always been controversial. This comes in part from the entrenched idea that you should be able to use your own land any way you want. But it didn’t take long for the law to come around to concluding that a person’s use of his or her land shouldn’t be allowed to adversely affect a neighbor’s use of his or her land.

And it didn’t take long for people to realize that zoning affects the value of land. Land zoned for greater density — as in apartments or shopping centers — tends to be more valuable than land limited to a less intense use. And it’s always been clear that zoning can (and does) lead to segregation — by pushing the cost of housing beyond the means of minority populations and lower-income workers. In sum, zoning regulations have become politically and legally complex, and have helped to provide income security for lawyers.

By way of legal history, the first municipality to enact a comprehensive zoning law was apparently New York City, in 1916. Colorado’s first major zoning ordinance went into effect in Denver in 1925, after voters gave the City Council authority to create the ordinance. (As another interesting matter of legal history, the city of Houston has grown and prospered without a comprehensive zoning ordinance, relying instead on private covenants and nuisance law to control land use.)

An important reality is that zoning affects the availability of affordable housing, which in turn affects economic activity — because businesses need workers and workers need places to live. Also, zoning has resulted in a division of land use authority between local and state governments. Generally speaking, state governments control land use restrictions that are a matter of “statewide concern” and restrictions having a more local impact are left to towns, cities and counties.

What is, and is not, a matter of statewide concern is a frequent source of controversy. At the moment, all manner of issues affecting affordable housing, including short-term rentals and accessory dwelling units, are caught in the middle between local and statewide concerns. An example from a few years back was Telluride’s attempt to increase affordable housing through an ordinance requiring new developments to include at least some lower-cost units. This effort crashed and burned when the Colorado Supreme Court decided it amounted to a program of rent control, prohibited by a state statute. (In Telluride, lower cost has its own meaning.)

As more people come to Colorado and the state struggles to balance multiple competing interests and affirm the principle that private interests must yield to the common good, it seems likely that legal (and political) skirmishes involving land use and zoning will continue to be on the rise.

Jim Flynn is a business columnist. He is of counsel with the Colorado Springs firm Flynn & Wright LLC. He can be contacted at moneylaw@jtflynn.com.

Money and the Law columnist Jim Flynn

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