Yes, we’re back, and with a case on …. spot zoning

by Gary Taylor

Ely v. City of Ames
(Iowa Court of Appeals, June 30, 2010)

The Elys own a tire and automotive service center on Lincoln Way.  Next door is the Martin House.  From approximately 1920 to the late forties the Martins provided room and board to African-American students attending Iowa State University when the students were denied housing elsewhere.  George Washington Carver, distinguished botanist and the first African American to graduate from Iowa State University, often visited the Martin’s home when he returned to Ames.  The house is also an example of the Craftsman architectural style, and is one of the few remaining houses on Lincoln Way, which has become a major commercial arterial.  The property is zoned “Highway-Oriented Commercial” but exists as a legal nonconforming residential use. 

The Archie and Nancy Martin Foundation submitted an application for Ames to designate the home as an historic landmark.  Over objections by the Elys, the Ames city council approved the designation and rezoned the Martin property as a “Historic Preservation Overlay District.”  The Elys sued, raising issues of (1) procedural due process, (2) equal protection, and (3) spot zoning.  The district court found in favor of the city on all three issues, and the Elys appealed.

Procedural due process.  On the procedural due process claim the Iowa Court of Appeals started by stating the well-settled legal principle that “a person is only entitled to procedural due process when a state action threatens to deprive a person of a protected property or liberty interest.”  The Elys argued that they have a protected interest in maintaining the value of their land, but the Court of Appeals disagreed.  “An abstract desire or expectation of a benefit is not sufficient,” but rather “a property interest is only protected if there is a legitimate claim of entitlement.”  The Court further ventured to state that even if it could somehow be shown that the Elys had protected property interests that were implicated by the historic landmark zoning of the neighboring property, the public hearing at which the rezoning was discussed and decided by the city council gave the Elys sufficient opportunity to be heard to satisfy procedural due process.

Equal protection.  The Elys next claimed that because the historic landmark designation fails to require the Martins to adequately maintain the property, it results in differing treatment between historic landmarks and surrounding properties and thus violates the Ely’s right to equal protection of the law.  The Court dismissed this argument by first recognizing that differing treatment under the law is permissible if parties are not similarly situated.  The Court concluded that promoting preservation of historical and cultural landmarks is a legitimate governmental interest sufficient to support differing treatment of properties.  Further, the Court observed that the Martin property was, in fact, held to a higher standard of maintenance than the Ely’s because the Martin property was subject to Ames’s rental code. 

Spot zoning.  The Court dismissed the Ely’s final issue of spot zoning by observing that illegal spot zoning results when “like tracts or similar lots are subject to reclassification” without reasonable grounds for treating the subject property differently.  “If a [city council or county board] could determine the subject property is distinguishable from the surrounding area [the court] will uphold its decision.”  The facts that the property had historical and cultural significance to Ames, and that it was a legal nonconforming residence in a residential structure were sufficient grounds for a zoning classification different from its surrounding properties.

7th Circuit rules on city’s point-of-sale inspection ordinance

by Gary Taylor

Hussein H. Mann, et. al. v. Calumet City, IL
(Federal Seventh Circuit Court of Appeals, December 7, 2009)

Post-sale inspection ordinance found constitutional. 

Calumet City, Illinois has an ordinance that forbids the sale of a house without an inspection to determine whether it is in compliance with the City’s building code.  The ordinance requires a property owner to notify the City government of a proposed sale of his property. The City has 28 days after receiving the notice to conduct a compliance inspection. During that period it must notify the owner of its intention to conduct the inspection. If he responds that he won’t consent to an inspection, the City has 10 days within which to get a warrant from a judge.  Within three business days after conducting the inspection (whether or not pursuant to a warrant) the City must notify the owner whether the house is in compliance with the building code and, if not, what repairs are required to bring it into compliance. If the inspection discloses an unlawful conversion of the house to a multifamily dwelling, the order, instead of being a repair order, will order deconversion. After the City is notified that the repairs have been made or deconversion effected, it has three business days within which to reinspect. An owner who is in a hurry to sell the house can do so before completing the ordered repairs or deconversion if his buyer posts a bond equal to the expected cost of bringing the house into compliance. The buyer then has 180 days to complete the repairs or deconversion; if he fails to do so, the City can ask a court to order him to do so. The owner can appeal a repair or deconversion order to the City’s Zoning Board of Appeals, where he is entitled to a full hearing. The appeal stays the City’s order. An owner who loses in the board of appeals is entitled to judicial review in the Illinois state court system in the usual manner.

Plaintiffs challenged the constitutionality of the ordinance “on its face,” meaning that in any application of such an ordinance it does not meet constitutional muster.  The district court dismissed the claims, and Plaintiffs appealed to the Seventh Circuit.

Plaintiffs challenged the ordinance on substantive due process grounds, arguing that there was no rational basis for the regulation.  After pointing out that Plaintiffs were engaging in an “uphill fight” to prove their claim, the court examined Plaintiffs’ arguments.  The court observed that building codes, to which the challenged ordinance are the most reasonable of regulations:

“They do increase the cost of property (as do other conventional regulations of property), but if reasonably well designed they also increase its value. Without them more buildings would catch fire, collapse, become unsightly, attract squatters, or cause environmental damage and by doing any of these things reduce the value of other buildings in the neighborhood. Assuring full compliance with building codes is difficult after a building is built, because most violations are committed inside the building and thus out of sight until a violation results in damage visible from the outside. …All this seems eminently reasonable….”

The Plaintiffs also raised a procedural due process claim, questioning the procedural adequacy of the method by which the City’s ordinance is enforced.  The Plaintiffs argued that it fails to provide for “pre-deprivation” procedures; that the City should be required to go to court, or conduct an administrative hearing before it can order repairs or deconversion.  The court dismissed this line of reasoning, pointing out that a homeowner can challenge the order, and if he does it is stayed.  “That is pre-deprivation process…. All that is required is . . . notice and an opportunity to be heard before being deprived of a protected liberty or property interest.”  The Seventh Circuit affirmed the district court’s dismissal.

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