Commonwealth Court Sees Spot Zoning, Overturns Industrial Rezoning

The Legal Intelligencer

(by Anna Skipper and Krista Staley)

For over 100 years, local governments have used zoning regulations, enabled by the police powers delegated from the states, to implement plans for the development of their communities. For just as long, objectors have challenged zoning regulations as exceeding this authority. The Commonwealth Court recently upheld such a challenge in Allen Distribution v. West Pennsboro Township Zoning Hearing Board, No 524 C.D. 2019 (Pa. Commw. Ct. May 11, 2020), finding that West Pennsboro’s decision to change the zoning of two parcels constituted illegal spot zoning.

Zoning ordinances generally enjoy a presumption of constitutional validity. However, an ordinance will be held to be unconstitutional if it is unreasonable, arbitrary or not substantially related to the police power interest it purports to serve. Thus, zoning enabling acts, such as the Pennsylvania Municipalities Planning Code, 53 P.S. Section 10101 et seq. (the MPC), require all zoning measures to be substantially related to the protection and preservation of the public health, safety, morality and welfare interests of its community.

Zoning regulations consist of a zoning map and zoning text. Those documents work in tandem; the map divides the municipality, or municipalities in cases of joint zoning, into “districts” while the text provides regulations for each district, imposes requirements for specific uses and outlines various procedures. Under the MPC, either the municipality or a landowner (including a leaseholder or potential buyer) can propose text and map amendments. The amendment process allows municipalities to improve their ordinances by, for example, adapting them to accommodate new and evolving uses. However, when used in a piecemeal fashion to achieve inconsistent goals, amendments may no longer have a reasonable relationship to the police power they must promote.

Objectors who believe a map or text amendment does not relate sufficiently to the police power can file a substantive validity challenge asserting the illegality of the ordinance. The local zoning hearing board, a quasi-judicial board appointed by the local governing body and required in any municipality with zoning, has jurisdiction to hear and decide substantive validity challenges to zoning ordinances. A zoning hearing board decision is appealable to the Common Pleas Court, and then the Commonwealth Court. Further appeal requires the Pennsylvania Supreme Court to grant an allowance of appeal. When engaged in appellate review of a zoning hearing  board determination, the appellate court’s scope of review is typically limited to determining whether the board committed an error of law or a manifest abuse of discretion. Reversible error occurs where the zoning hearing board’s findings are not supported by substantial evidence. If the trial court has reason to take additional evidence, it will decide the appeal de novo.

In Allen Distribution v. West Pennsboro Township Zoning Hearing Board, the Commonwealth Court grappled with a substantive validity challenge alleging that a zoning map amendment constituted “spot zoning.” Spot zoning occurs where a parcel is singled out for different treatment than that accorded to similar surrounding land, creating an “island” on the zoning map. Spot zoning may occur organically and innocently through the zoning amendment process, or it may be the result of intentional rezoning of an area for the economic benefit or detriment of a landowner. In either instance, if there was no reasonable basis for the different treatment of the “island,” a challenged zoning ordinance will be stricken as unconstitutional and invalid.

The Allen Distribution v. West Pennsboro Township Zoning Hearing Board case considered the substantive validity of two ordinances amending the West Pennsboro Township (the township) zoning map. The amendments rezoned two large adjacent parcels, totaling 133 acres of land (the property), in anticipation of its sale and development. Allen Distribution, the proposed purchaser and equitable owner of both parcels, applied to the Township Board of Supervisors (the supervisors) to rezone the parcels from “high density residential” to “industrial.” Allen intended to construct industrial buildings on the property. Following public hearings, the Supervisors enacted two identical ordinances (the ordinances) rezoning the land as requested. Neighboring property owners (the objectors) subsequently challenged the substantive validity of both ordinances before the Township Zoning Hearing Board (the board). The board concluded that the objectors sustained their burden of establishing that the ordinances “unjustifiably, arbitrarily, and unreasonably single out land for different treatment than from that accorded to similar surrounding land of the same character for the economic benefit of Allen,” and therefore constituted invalid spot zoning.

Allen appealed to the Common Pleas Court, which affirmed the board’s decision, and Allen again appealed. While Allen did not challenge the board’s determination that the property was being treated differently, or that the property is similar in character to the adjoining properties, it attempted to show that there was reasonable basis for the different treatment, rendering the ordinances a valid exercise of the police power. Allen primarily argued that the large size of the lot, the nature of certain nearby uses, and the fact that the joint comprehensive plan of the township identified the property as a future industrial growth area created a reasonable basis for the different treatment of the property by the supervisors.

The Commonwealth Court engaged in an in-depth discussion of each argument and concluded that there was no error or abuse of discretion in the board’s determination, i.e., that there was no reasonable basis for the different treatment of the property, and the ordinances constituted invalid spot zoning as they unjustifiably, arbitrarily, and unreasonably singled out the property for treatment different than similar surrounding land of the same character for the economic benefit of Allen.

The court first addressed the large size of the property, which it considered a single integrated unit despite the fact that it was, at that time, two separate lots with legal title held by two separate owners. As the court noted, while spot zoning often is found in regards to relatively small parcels, the size of the property is only one factor in determining whether spot zoning has occurred. The main inquiries are whether the land at issue is a single, integrated unit and whether any difference in its zoning from that of adjoining properties can be justified with reference to the characteristics of the tract and its environs. The court concluded that there was no error or abuse of discretion in the board’s determination that the property was a single integrated unit. Therefore, the court dismissed Allen’s argument that the property’s size, in relation to the small size of the adjacent lots and the large size of other industrial-zoned properties in the vicinity, rendered it sufficiently different to warrant differential treatment.

Turning next to its comparison to the surrounding uses, the court noted that properties bordering the property in the township were generally zoned R-2, with the Pennsylvania Turnpike and the neighboring township abutting the remaining borders. Allen argued that the property’s proximity to an area of infrastructure and development, namely parcels located in the adjacent North Middleton Township that did not directly abut the property, justified the rezoning. Relying on Schubach v. Zoning Board of Adjustment (Philadelphia), 270 A.2d 397 (Pa. 1970), the court held that even if the Property rested on the border of industrial-zoned land, it would not automatically justify rezoning it to match. In addition, it noted that it could not “attribute more significance to the use of more distant properties than those properties adjacent to the subject property,” and that “spot zoning would have nothing to do with a spot or an island if the use of nonadjacent properties was more relevant than the adjacent properties.”

Moving on, the court addressed Allen’s argument that the rezoning’s consistency with the township Comprehensive Plan justified the change. Allen pointed to the identification of 31 parcels in the vicinity, including the Property, as “future industrial growth areas” on the comprehensive plan map. However, the township did not rezone any of the other referenced parcels in accordance with the map. Thus, while the rezoning of the property was consistent with the comprehensive plan map as it applied to the property, the court found it was not consistent as it applied to the area as a whole. Turning to the comprehensive plan text, the court noted the document’s acknowledgement of the need for “proper transition between uses as conflicts may arise in some circumstances between neighboring properties.” The court reviewed Schubach v. Silver, 336 A.2d 328, 338 (Pa. 1975) (Schubach II), where the Pennsylvania Supreme Court upheld a rezoning after finding the change creating a “transition zone” and represented the “best buffer” consistent with the comprehensive plan. The court distinguished Schubach II from the case before it on the facts, upholding the board’s determination that rezoning the property did not establish a land use that “best blends in with surrounding different uses.” According to the court, there were “significant differences” between the property and the adjoining parcels zoned R-2.

The court similarly dispensed with Allen’s additional arguments, holding that although “various government entities voted to recommend rezoning in conjunction with their review of the comprehensive plans” and “rezoning will create some benefit to persons other than the owner,” there was still no justifiable reason for treating the property differently than those that surrounded it.

Ultimately, the court found that substantial evidence supported the board’s determination that the rezoning did not promote the health, safety and welfare of the township residents, and therefore there was no error or abuse of discretion in the determination that the ordinances unjustifiably, arbitrarily, and unreasonably singled-out land for treatment different than similar surrounding land of the same character for the economic benefit of Allen, rendering the ordinances invalid as spot zoning.

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Reprinted with permission from the June 17, 2020 edition of The Legal Intelligencer© 2020 ALM Media Properties, LLC. All rights reserved.