The idea of vested rights legislation in New York has come and gone over the years without the State Legislature voting on prior proposals.
A vested right affords protection against zoning changes that would render a proposal impermissible. It incentivizes development by bringing a level of certainty to a risky land use process that requires significant upfront investment in site acquisition, planning, engineering, environmental remediation, zoning and land use entitlements, and other costs. This can be beneficial for developers (and their lenders) and municipalities alike. Right now, zoning laws affecting a project can change on a whim, especially given two-year election cycles. Yet, vested rights legislation has been met with opposition who are concerned about hamstringing the broad discretion that local legislatures enjoy under New York law to rezone essentially as they please.
The issue is back in the spotlight after a new vested rights bill was introduced in January of this year (A00831), aimed primarily at fostering greater predictability in affordable housing projects (although it would apply to any project). The bill is a pilot program that would apply only in Dutchess, Orange, Putnam, Rockland and Westchester Counties. It is intended to provide better—and earlier—protection than the common law rules which confer vested rights on a landowner only upon “substantial expenditures and substantial construction” in reliance on a valid approval. This is often too late. The time between final approvals and shovels in the ground can be considerable due to market conditions, financing obstacles, and the complexities of a given project. And there is currently limited, statutory vested rights protection in New York. It relates only to filed residential subdivision plats for up to three years, and it does not protect plats from changes in “use” regulations (see, e.g., NY Town Law § 265-a).
The proposed bill would freeze for six years all zoning and other laws regulating the development of a parcel of land which are in effect nine months after the filing of a “complete” site plan, subdivision or other land development application, provided the application is pursued with “reasonable efforts.” The application must “meet all non-discretionary requirements,” and be “accompanied by an environmental assessment form, if required, or at the discretion of the applicant a draft environmental impact statement.” There are certain carve outs under which a municipality would be permitted to change the zoning, such as if new information about a project would threaten public health and safety.
The effort to rejuvenate vested rights legislation is to be applauded. This type of protection could be particularly helpful in projects that include affordable housing, where community opposition surfaces frequently. Once zoning is frozen, the land use process is less susceptible to political pressures.
But there are certain aspects of the proposed bill that may present practical hurdles in its implementation. For starters, 9 months gives a legislative body determined on halting a project plenty of time to change the zoning before the freeze takes effect. We agree that municipalities should have a reasonable amount of time to enact new zoning in response to a proposal. 6 months (the period in prior bills) should be more than sufficient. Frankly, it could be done even faster.
And what exactly does a “complete application” mean? Each municipality processes applications a little differently. There is not always a formal moment of “completeness” (nor a ruling that all “non-discretionary” requirements have been met). Often development plans and supporting studies continue to be prepared and/or modified in response to agency comments leading right up to a decision, especially where a SEQRA Negative Declaration is pursued. Also, a municipality could seemingly just hold off making a completeness determination to prevent the 9-month clock from ticking. This terminology could also cause confusion in subdivision applications, in which completeness carries a specific meaning that is tied to certain milestones being reached in the SEQRA process.
The bill’s SEQRA requirement that an application shall be accompanied by either an EAF or a DEIS also raises a question: if it’s really at the applicant’s discretion, why would an applicant ever choose to take the time to submit the more complex and expensive DEIS over an EAF, and delay starting the nine-month period?
Perhaps a solution is for the bill to include more precise parameters around what it means for a land use application to be complete for purposes of obtaining vested rights, and to require that such determination be made within 30 days of submittal (this could be useful beyond just the vested rights context). A workable standard for “completeness” could mean that an application includes all the basic information and materials required to be provided under the municipal code, including the application forms, an EAF, and concept drawings. Many municipalities already include this gatekeeper-type step informally in their review process before placing a matter on an agenda for an initial presentation. It is typically done by the planning department, not the land use review board.
Importantly, a formal completeness determination is not a judgment on the merits of the application. Even though the zoning becomes frozen (9 months later), the municipality need not approve the project if all SEQRA and code requirements are not met. Those review rights are retained in their entirety. This is all designed to give comfort to a developer that it can embark on spending real money on the review process without risk of the zoning being pulled at any moment. The municipality also wins by attracting development and stimulating economic activity.
Moreover, while the State evaluates the current pilot bill (or in the event it does not get adopted), municipalities can also consider adopting their own local vested rights legislation based upon their broad power to adopt and amend zoning under General City Law, Town Law, and Village Law, as well as under Municipal Home Rule Law.
And finally, while we’re thinking about the zoning power and encouraging affordable housing, perhaps it is also time for the State Legislature to consider passing legislation that obligates municipalities to process rezoning petitions and makes such review subject to the same “arbitrary and capricious” standard applicable to site plans and subdivisions. Currently, a municipality can reject proposed zoning changes for any reason or no reason at all, and it need not even accept a zone change application for processing. If the vested rights legislation (which expressly does not apply to rezoning applications) is all about trying to incentivize and promote smart development and economic growth, especially in projects involving much-needed affordable housing, then it seems other rules governing rezonings should likewise be revisited.
