December 2017 Land Use Case Law Update

On December 13, 2017, Phil Olbrechts and I copresented the winter session of the Land Use Case Law Update webinar. These webinars, held twice annually, review land use case law that has the potential to impact local governments throughout the state. Below is a short summary of new land use decisions decided within the last six months and the broad topics each case addressed.

Regulatory takings and lot merger regulations

Murr v Wisconsin, 137 S.Ct. 1933 (June 23, 2017)

At issue in the case was a regulation that merges together and prohibits the separate sale or development of adjacent lots under common ownership when one of the lots does not contain a minimum amount of developable land.

The landowners bringing the suit owned two adjacent lots, each of which contained less than the minimum amount of developable land. The landowners claimed that the regulation constituted a taking, as it deprived them of use of one of the lots, which they wished to sell in order to fund development on the second lot.

The Court affirmed the lower courts, which had held that no taking occurred because, when the property was considered as a whole, the land owners retained “several available options” for use and the market value of the property was not significantly affected. The Court laid out a series of factors that should be considered in such circumstances to decide if the property should be considered as a whole. These factors include the treatment of the land under state and local law, the physical characteristics of the land, and the prospective value of the regulated land.

By looking at these factors, courts can decide if a reasonable landowner would anticipate that his property would be treated as one parcel or as separate tracts. Once a court has made this determination, it has established the “denominator” to be used in its takings analysis.

The Land Use Petition Act (LUPA) and latecomers agreements

Cave Properties v. City of Bainbridge Island, 199 Wn. App. 651 (July 11, 2017)

A property owner was required to pay for the installation of a water main to serve the owner’s property. The property owner requested that the city approve a utility latecomer reimbursement agreement pursuant to RCW 35.91.020.

As required by statute, the city notified nearby property owners of the proposed agreement. Cave, an owner of nearby property, requested the city council hold a hearing before approving the reimbursement agreement. Over concerns and objections of Cave, the city council approved the agreement and Cave appealed to the superior court under the Land Use Petition Act (LUPA) and chapter 7.16 RCW.

The city moved to dismiss the appeal, arguing that the approval of the reimbursement agreement was not a land use decision, thus the court had no jurisdiction to hear a LUPA appeal. The court of appeals disagreed and reversed, concluding that the council’s action qualified under RCW 36.70C.020 (2)(b) as a declaratory decision. In effect, it was “a determination arrived at after consideration,” it related to a specific parcel of land (Cave’s property), and it regulated the development and use of real property.

The Growth Management Act (GMA) and historic preservation

University of Washington v. City of Seattle, 188 Wn.2d 823 (July 20, 2017)

The University of Washington planned to demolish a building that formerly housed a nuclear reactor. However, that building had been nominated for protection under Seattle’s Landmark Preservation Ordinance (LPO), which restricts changes to buildings that have been designated as being historical.

Although the University had previously followed the LPO (but without conceding that its projects were covered by the ordinance), it argued that the ordinance did not apply to the University, thus the old reactor building was not protected.

The trial court held in the University’s favor, finding that the University was not a “person” for purposes of the LPO. The City appealed and the Supreme Court reversed.

Although a statute previously placed full control of University property in the hands of the University regents, that law was amended by adding language "except as otherwise provided by law." The Growth Management Act (GMA) can be such an exception and it provides authority for local governments to adopt development regulations. The LPO is such a regulation and applies to the University. (The court did not address whether the LPO was a development regulation; that issue should be addressed by the Growth Management Hearings Boards.)

The court rejected the University’s argument that it was not a state agency; it is a state agency and must adhere to local development regulations. The court also determined that the University is a property owner for purposes of the LPO.

Questions? Comments?

If you have questions about related local government issues, please use our Ask MRSC form or call us at (206) 625-1300 or (800) 933-6772. If you have comments or questions about this blog post, please email me at jdvorkin@mrsc.org.