IS CONTRACT ZONING PERMISSIBLE?

99002503_401c527099_mWe recently received two unrelated calls from developers concerning a local municipality’s attempts to condition the passing of a rezoning rezoning request on the developer first complying with a number of expensive design modifications. The obvious concern for the developers was whether complying with the request created enforceable rights against the city.

This answer to this question turns on whether Mississippi recognizes  “contract zoning.”  The phrase “contract zoning” refers to an agreement between the property owner and the local zoning authority where the property owner agrees to certain conditions in return for an enforceable promise that the rezoning will pass.  Some states stringently prohibit contract zoning while others recognize that contact zoning is an effective land use planning device in certain situations.

We are not aware of any Mississippi case where contract zoning was specifically prohibited. However, the Mississippi Supreme Court has drawn a distinction between “contract zoning” and “conditional zoning.” As explained by the Mississippi Supreme Court, “conditional zoning” describes the situation where a municipality goes ahead and rezones the property on the condition that the landowner perform certain acts simultaneously with or after the rezoning. see Old Canton Hills Homeowners Ass’n v. Mayor & City Council of City of Jackson, 749 So. 2d 54, 60 (Miss. 1999)(holding that contingent zoning was both legal and beneficial in certain situations). The difference between conditional zoning and contract zoning is that with conditional zoning there is not an enforceable promise. Instead, performance by both sides is simply a matter of trust.

In response to a similar question submitted to the Mississippi Attorney General’s Office involving a conditional subdivision approval, the Attorney General concluded that “while this question has not been addressed by the Supreme Court, it is our opinion that if conditions may be attached to zoning applications, then they can be attached to subdivision approvals.” However, when asked if the governing authority could enforce the covenant if the developer subsequently violates one of the conditions, the Attorney General concluded that there was no authority to enforce the covenant. 2008 WL 2687406, at *2 (Miss. A.G. June 13, 2008).

So at this point it does not appear that a municipality or county can make an enforceable promise that if a developer makes certain changes then the rezoning application will be passed.  The reasoning behind this is that doing so preempts the power of the zoning authority to zone the property according to the prescribed procedures. In other words, by making a promise to rezone before the hearing actually occurs,  the local government authority is actually undermining the statutory hearing process itself.

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