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HomeMy WebLinkAbout5.b. Variance TA EXECUTIVE SUMMARY Planning Commission Regular Meeting: May 26, 2020 Tentative City Council Meeting: June 16, 2020 AGENDA ITEM: 20-32-TA Zoning Ordinance Text Amendment to Section 11-12-2: Board of Appeals and Adjustments Procedures updating the findings that must be made to grant a variance. AGENDA SECTION: Public Hearing PREPARED BY: Anthony Nemcek, Planner AGENDA NO. 5.b. ATTACHMENTS: League of Minnesota Cities Variance Memo APPROVED BY: KL RECOMMENDED ACTION: Motion to recommend that the City Council approve the amendment to Section 11-12-2: Board of Appeals and Adjustments Procedures. SUMMARY When reviewing a variance request, the Planning Commission, acting as the Board of Appeals and Adjustments, must make five findings to support granting a variance. The Commission must find that the proposed variance is in harmony with the purpose and intent of the zoning ordinance and that it is consistent with the comprehensive plan. Additionally, the variance request must satisfy the three factors of the practical difficulty test: reasonableness, uniqueness, and essential character. These findings were updated following legislation that was signed into law in 2011 as a result of a ruling by the Minnesota Supreme Court in the case of Krummenacher v. City of Minnetonka that took away municipal authority to grant variances, which was later restored by the Legislature. The proposed amendment clarifies the language of the “reasonableness” prong of the “practical difficulties” test. BACKGROUND Legal Authority. Text amendments are considered legislative actions. In such cases, the City has a lot of discretion in its deliberations and the outcome of the request, although ultimately an ordinance must be consistent with Minnesota statutes related to land use. Discussion. Before 2011, municipalities used an “undue hardship” test when determining whether to grant or deny a variance. This test contained three factors: reasonableness, uniqueness, and essential character. The reasonableness prong had been interpreted by municipalities as whether or not the variance request proposes a reasonable use of the property. In 2011, following a decision made by the Supreme Court of the State of Minnesota that took away the authority of municipalities to approve variances, the legislature passed a bill that was signed into law that restored municipal variance authority. According to the League of Minnesota Cities, “…the Minnesota Supreme Court narrowly interpreted the statutory definition of “undue hardship” and held that the “reasonable use” prong of the “undue hardship” test is not whether the proposed use is reasonable, but rather whether there is a reasonable use in the absence of the variance.” The 2011 law renamed the “undue hardship” test to “practical difficulties” and changed the reasonableness factor back to the “reasonable manner” understanding that had been used by some lower courts prior to the Krummenacher ruling. 2 The City of Rosemount Zoning Ordinance was amended in 2011 to replace “undue hardship” to “practical difficulties” while retaining the three factors of reasonableness, uniqueness, and essential character to ensure consistency with the statute. Staff is proposing an amendment to the reasonable use prong of the “practical difficulties” test that clarifies that the Commission must find that the property owner is proposing to use the property in a reasonable manner. Text Amendment. Staff is proposing the following amendment to Section 11-12-2: Board Appeals and Adjustments Procedures: G. Findings: The board of appeals and adjustments and the city council, upon appeal, must find as follows in the granting of a variance from this title. Variances may be granted when the applicant for the variance establishes that there are practical difficulties in complying with the zoning ordinance. Economic considerations alone do not constitute practical difficulties. 1. The variance request is in harmony with the purposes and intent of the ordinance. 2. The variance is consistent with the comprehensive plan. 3. Granting of the variance allows reasonable use of the property. 3. The property owner proposes to use the property in a reasonable manner. 4. There are unique circumstances to the property which are not created by the landowner. 5. Granting of the variance does not alter the essential character of the locality. CONCLUSION AND RECOMMENDATION This is the first time the ordinance is before the Planning Commission. Staff is asking for discussion from the Commission. If Commissioners are comfortable with the proposed ordinance language, staff is recommending approval of the Amendment. If not, the Commissioners should provide staff direction and modifications to the draft ordinance would be made. 145 University Ave. West www.lmc.org 1/11/2019 Saint Paul, MN 55103-2044 (651) 281-1200 or (800) 925-1122 © 2019 All Rights Reserved This material is provided as general information and is not a substitute for legal advice. Consult your attorney for advice concerning specific situations. INFORMATION M EMO Land Use Variances Learn about variances as a way cities may allow an exception to part of their zoning ordinance. Review who may grant a variance and how to follow and document the required legal standard of “practical difficulties” (before 2011 called “undue hardship”). Links to a model ordinance and forms for use with this law. RELEVANT LINKS: I. What is a variance A variance is a way that a city may allow an exception to part of a zoning ordinance. It is a permitted departure from strict enforcement of the ordinance as applied to a particular piece of property. A variance is generally for a dimensional standard (such as setbacks or height limits). A variance allows the landowner to break a dimensional zoning rule that would otherwise apply. Minn. Stat. § 462.357, subd. 6. Sometimes a landowner will seek a variance to allow a particular use of their property that would otherwise not be permissible under the zoning ordinance. Such variances are often termed “use variances” as opposed to “area variances” from dimensional standards. Use variances are not generally allowed in Minnesota—state law prohibits a city from permitting by variance any use that is not permitted under the ordinance for the zoning district where the property is located. II. Granting a variance Minn. Stat. § 462.357, subd. 6. Minnesota law provides that requests for variances are heard by a body called the board of adjustment and appeals; in many smaller communities, the planning commission or even the city council may serve that function. A variance decision is generally appealable to the city council. Minn. Stat. § 462.357, subd. 6. A variance may be granted if enforcement of a zoning ordinance provision as applied to a particular piece of property would cause the landowner “practical difficulties.” For the variance to be granted, the applicant must satisfy the statutory three-factor test for practical difficulties. If the applicant does not meet all three factors of the statutory test, then a variance should not be granted. Also, variances are only permitted when they are in harmony with the general purposes and intent of the ordinance, and when the terms of the variance are consistent with the comprehensive plan. RELEVANT LINKS: League of Minnesota Cities Information Memo: 1/11/2019 Land Use Variances Page 2 III. Legal standards When considering a variance application, a city exercises so-called “quasi- judicial” authority. This means that the city’s role is limited to applying the legal standard of practical difficulties to the facts presented by the application. The city acts like a judge in evaluating the facts against the legal standard. If the applicant meets the standard, then the variance may be granted. In contrast, when the city writes the rules in zoning ordinance, the city is exercising “legislative” authority and has much broader discretion. A. Practical difficulties “Practical difficulties” is a legal standard set forth in law that cities must apply when considering applications for variances. It is a three-factor test and applies to all requests for variances. To constitute practical difficulties, all three factors of the test must be satisfied. 1. Reasonableness The first factor is that the property owner proposes to use the property in a reasonable manner. This factor means that the landowner would like to use the property in a particular reasonable way but cannot do so under the rules of the ordinance. It does not mean that the land cannot be put to any reasonable use whatsoever without the variance. For example, if the variance application is for a building too close to a lot line or does not meet the required setback, the focus of the first factor is whether the request to place a building there is reasonable. 2. Uniqueness The second factor is that the landowner’s problem is due to circumstances unique to the property not caused by the landowner. The uniqueness generally relates to the physical characteristics of the particular piece of property, that is, to the land and not personal characteristics or preferences of the landowner. When considering the variance for a building to encroach or intrude into a setback, the focus of this factor is whether there is anything physically unique about the particular piece of property, such as sloping topography or other natural features like wetlands or trees. RELEVANT LINKS: League of Minnesota Cities Information Memo: 1/11/2019 Land Use Variances Page 3 3. Essential character The third factor is that the variance, if granted, will not alter the essential character of the locality. Under this factor, consider whether the resulting structure will be out of scale, out of place, or otherwise inconsistent with the surrounding area. For example, when thinking about the variance for an encroachment into a setback, the focus is how the particular building will look closer to a lot line and if that fits in with the character of the area. B. Undue hardship 2011 Minn. Laws, ch. 19, amending Minn. Stat. § 462.357, subd. 6. “Undue hardship” was the name of the three-factor test prior to a May 2011 change of law. After a long and contentious session working to restore city variance authority, the final version of HF 52 supported by the League and allies was passed unanimously by the Legislature. On May 5, Gov. Dayton signed the new law. It was effective on May 6, the day following the governor’s approval. Presumably it applies to pending applications, as the general rule is that cities are to apply the law at the time of the decision, rather than at the time of application. Krummenacher v. City of Minnetonka, 783 N.W.2d 721 (Minn. June 24, 2010). Minn. Stat. § 462.357, subd. 6. Minn. Stat. § 394.27, subd. 7. See Section I, What is a variance. The 2011 law restores municipal variance authority in response to a Minnesota Supreme Court case, Krummenacher v. City of Minnetonka. It also provides consistent statutory language between city land use planning statutes and county variance authority, and clarifies that conditions may be imposed on granting of variances if those conditions are directly related to, and bear a rough proportionality to, the impact created by the variance. In Krummenacher, the Minnesota Supreme Court narrowly interpreted the statutory definition of “undue hardship” and held that the “reasonable use” prong of the “undue hardship” test is not whether the proposed use is reasonable, but rather whether there is a reasonable use in the absence of the variance. The new law changes that factor back to the “reasonable manner” understanding that had been used by some lower courts prior to the Krummenacher ruling. See Section IV-A, Harmony with other land use controls. The 2011 law renamed the municipal variance standard from “undue hardship” to “practical difficulties,” but otherwise retained the familiar three-factor test of (1) reasonableness, (2) uniqueness, and (3) essential character. Also included is a sentence new to city variance authority that was already in the county statutes. RELEVANT LINKS: League of Minnesota Cities Information Memo: 1/11/2019 Land Use Variances Page 4 C. City ordinances Some cities may have ordinance provisions that codified the old statutory language, or that have their own set of standards. For those cities, the question may be whether you have to first amend your zoning code before processing variances under the new standard. A credible argument can be made that the statutory language pre-empts inconsistent local ordinance provisions. Under a pre-emption theory, cities could apply the new law immediately without necessarily amending their ordinance first. In any regard, it would be best practice for cities to revisit their ordinance provisions and consider adopting language that mirrors the new statute. Issuance of Variances, LMC Model Ordinance. Variance Application, LMC Model Form. Adopting Findings of Fact, LMC Model Resolution. The models linked at the left reflect the 2011 variance legislation. While they may contain provisions that could serve as models in drafting your own documents, your city attorney would need to review prior to council action to tailor to your city’s needs. Your city may have different ordinance requirements that need to be accommodated. IV. Other considerations A. Harmony with other land use controls Minn. Stat. § 462.357, subd. 6. See LMC information memo, Taking the Mystery out of Findings of Fact. The 2011 law also provides that: “Variances shall only be permitted when they are in harmony with the general purposes and intent of the ordinance and when the terms of the variance are consistent with the comprehensive plan.” This is in addition to the three-factor practical difficulties test. So a city evaluating a variance application should make findings as to: • Is the variance in harmony with the purposes and intent of the ordinance? • Is the variance consistent with the comprehensive plan? • Does the proposal put property to use in a reasonable manner? • Are there unique circumstances to the property not created by the landowner? • Will the variance, if granted, alter the essential character of the locality? B. Economic factors Minn. Stat. § 462.357, subd. 6. Sometimes landowners insist that they deserve a variance because they have already incurred substantial costs or argue they will not receive expected revenue without the variance. State statute specifically notes that economic considerations alone cannot create practical difficulties. Rather, practical difficulties exist only when the three statutory factors are met. RELEVANT LINKS: League of Minnesota Cities Information Memo: 1/11/2019 Land Use Variances Page 5 C. Neighborhood opinion Neighborhood opinion alone is not a valid basis for granting or denying a variance request. While city officials may feel their decision should reflect the overall will of the residents, the task in considering a variance request is limited to evaluating how the variance application meets the statutory practical difficulties factors. Residents can often provide important facts that may help the city in addressing these factors, but unsubstantiated opinions and reactions to a request do not form a legitimate basis for a variance decision. If neighborhood opinion is a significant basis for the variance decision, the decision could be overturned by a court. D. Conditions Minn. Stat. § 462.357, subd. 6. A city may impose a condition when it grants a variance so long as the condition is directly related and bears a rough proportionality to the impact created by the variance. For instance, if a variance is granted to exceed an otherwise applicable height limit, any conditions attached should presumably relate to mitigating the effect of excess height. V. Variance procedural issues A. Public hearings Minnesota statute does not clearly require a public hearing before a variance is granted or denied, but many practitioners and attorneys agree that the best practice is to hold public hearings on all variance requests. A public hearing allows the city to establish a record and elicit facts to help determine if the application meets the practical difficulties factors. B. Past practices While past practice may be instructive, it cannot replace the need for analysis of all three of the practical difficulties factors for each and every variance request. In evaluating a variance request, cities are not generally bound by decisions made for prior variance requests. If a city finds that it is issuing many variances to a particular zoning standard, the city should consider the possibility of amending the ordinance to change the standard. RELEVANT LINKS: League of Minnesota Cities Information Memo: 1/11/2019 Land Use Variances Page 6 C. Time limit Minn. Stat. § 15.99. A written request for a variance is subject to Minnesota’s 60-day rule and must be approved or denied within 60 days of the time it is submitted to the city. A city may extend the time period for an additional 60 days, but only if it does so in writing before expiration of the initial 60-day period. Under the 60-day rule, failure to approve or deny a request within the statutory time period is deemed an approval. D. Documentation Minn. Stat. § 15.99, subd. 2. See LMC information memo, Taking the Mystery out of Findings of Fact. Whatever the decision, a city should create a record that will support it. In the case of a variance denial, the 60-day rule requires that the reasons for the denial be put in writing. Even when the variance is approved, the city should consider a written statement explaining the decision. The written statement should explain the variance decision, address each of the three practical difficulties factors and list the relevant facts and conclusions as to each factor. Minn. Stat. § 15.99, subd. 2. If a variance is denied, the 60-day rule requires a written statement of the reasons for denial be provided to the applicant within the statutory time period. While meeting minutes may document the reasons for denial, usually a separate written statement will need to be provided to the applicant in order to meet the statutory deadline. A separate written statement is advisable even for a variance approval, although meeting minutes could serve as adequate documentation, provided they include detail about the decision factors and not just a record indicating an approval motion passed. VI. Variances once granted A variance once issued is a property right that “runs with the land” so it attaches to and benefits the land and is not limited to a particular landowner. A variance is typically filed with the county recorder. Even if the property is sold to another person, the variance applies. VII. Further assistance Jed Burkett LMCIT Land Use Attorney jburkett@lmc.org 651.281.1247 If you have questions about how your city should approach variances under this statute, you should discuss it with your city attorney. You may also contact League staff.