Neil A. Stein, Esq., Kaplin | Stewart
Developers and municipalities have historically believed that local land use decisions should be made locally. The impacts of development, positive or negative, are felt locally. Local elected officials best understand the needs of their constituents. Developers can “pitch” infrastructure improvements, increased tax payments, or other incentives to communities evaluating a development proposal. The state, while a decision-maker as to certain permits, does not typically influence local land use decisions. Except in narrow areas such as wetlands, the federal government has traditionally followed suit. Tacitly, at least, the federal government is now aiming to create a “sea change.”
The Biden administration believes that one of the issues constraining housing supply is the lack of available and affordable land, which is driven by state and local land use laws limiting housing density. Such exclusionary policies constrain land use, inflate prices, perpetuate patterns of segregation, keep workers in lower productivity regions, and limit economic growth. Reducing regulatory barriers to housing production would increase the supply of affordable housing. The Administration’s position is that local government bans on duplexes, triplexes, or apartment buildings drive racial and economic segregation, adversely affect housing affordability and ignore the effects of climate change.
With few exceptions (e.g., cell towers and religious institutions), federal government has not exercised authority over local zoning. In contrast, the Biden administration has identified $6 billion in incentives for local governments. If such a “carrot” is unsuccessful, there may be a “stick” on the horizon. Some pundits have argued for a federal “zoning czar” to directly influence local zoning decisions. Perhaps more importantly, such an office could exacerbate the political differences associated with zoning reform. There appears to be some bi-partisan support for the concept but little for implementation.
Second, on August 16, 2022, the federal EPA released its Interim Environmental Justice and Civil Rights in Permitting Frequently Asked Questions (FAQ), that provides guidance to federal, state, and local environmental permitting entities on integrating environmental justice and civil rights into permit decisions. One interesting part of the FAQ is:
“If there are no mitigation measures the permitting authority can take, whether within or outside the permitting program, that can address the disparate impacts, and there is no legally sufficient justification for the disparate impacts, denial of the permit may be the only way to avoid a Title VI violation….”
EPA civil rights regulations prohibit entities that receive federal financial assistance from EPA from taking actions that are intentionally discriminatory or that have a discriminatory effect on the basis of race, color, or national origin. Recently, the City of Chicago denied a permit for a metal recycling facility after EPA noted civil rights concerns, even after the state EPA had issued its permit. The City’s denial was based on the alleged disparate impact of the facility on disadvantaged communities. The City’s action has been appealed.
So, the federal government’s unstated intention to involve itself in local land use decisions will present both carrots and sticks for developers and municipalities alike. If nothing else is accomplished, perhaps this new federal involvement will necessitate that developers and local government work cooperatively in the land use approval process. Otherwise, Uncle Sam will take a seat at the table and stay there for the foreseeable future.
Neil Andrew Stein, Esquire is a principal of Kaplin, Stewart, Meloff, Reiter & Stein and a member of the Land Use, Zoning & Development Department.
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