Judge Thomas R. Fitzgerald on Property Rights
From Judgepedia
- Justice Fitzgerald concurred in the majority opinion, written by Justice Rita B. Garman, in a case where Chicago Alderman Charles Bernardini proposed a zoning change to prohibit the construction of the plaintiff's apartment building after plaintiff had already begun construction of the apartment building, and that zoning change became effective the following month, established two rules: (1) that a property owner has a vested right to continue building, or in the alternative is entitled to compensation, if the property owner made substantial expenditures prior to the indroduction of a later-passed zoning ordinance that would otherwise prohibit such building; and (2) that a property owner's investments in development are at his own peril once an amendment that would prohibit his development has been officially proposed.
ISSUES:
The primary issue before the cout was whether the property owner had a vested right to recover the expenditures it made to develop property, or a vested right to continue to develop that proeprty, where the city later changed the zoning to exclude such building. In considering this issue, the court made inquiry into (1) whether the plaintiff's expenditures were made in good-faith reliance on the zoning standards in effect at the time of that it began to develop the property (the city argued that reliance was unjustifiable upon the first discussion of a potential zoning change); and (2) whether those expenditures were substantial enough.
HOLDINGS:
- (1) The Court acknowledged the general rule is that a landowner has no right to the continuation of an existing zoning classification, but noted that, "where there has been a substantial change of position, expenditures or incurrence of obligations made in good faith by an innocent party under a building permit or in reliance upon the probability of its issuance, such party has a vested property right and he may complete the construction and use of the premises for the purposes originally authorized, irrespective of subsequent zoning or a change in zoning classification."
- (2) It then held that "when considering whether a property owner has gained a vested right to build under the property's then-existing zoning classification, the starting point for the analysis must be the point at which some official action took place that could result in a change in the property's zoning. At a minimum, this would require actual introduction of a proposal to the appropriate zoning authorities which, if enacted into law, would change the property's existing zoning to a classification that would not allow construction of the property owner's building project." Thus the relevant point would not be, as lower courts had indicated, when the alderman indicated to the property owner that introduction of a potentially damaging zoning change was a consideration.
- (3) Finally, in considering whether the property owner's expenditures were "substantial," the court held that it was appropriate to consider the absolute amount spent prior to notice of the zoning change, rather than the proportion spent prior to such notice.
MAJORITY REASONING:
- (1) The conclusion reached by the lower courts, i.e. that the property owner had no right to recover expenses made after being told by an alderman that re-zoning was merely a possibility, "could lead to manipulation by objecting neighbors and may discourage property owners from seeking to develop their property. Neighbors who object to proposed construction may pressure their political representative to make early threats to down zone unless the owner compromises. The neighbors may then later refuse to compromise and request their representative to introduce a down-zoning ordinance, confident in the knowledge that the owner could have gained no vested right to build under the property's former zoning. A standard that may be subject to manipulation by either party is unworkable."
- (2) When the property owner was told that re-zoning was a possibility, it still may have been possible to compromise on a different type of structure, had the parties been willing.
- (3) The City argues that no case exists in which good-faith reliance was found despite the plaintiff's knowledge that a zoning change was pending and it refers repeatedly in its brief to “pending zoning change,” “impending amendment,” and “impending zoning change” to describe the point at which LSA's good-faith reliance on the existing zoning ended. However, no zoning change was “pending” until [the alderman] introduced the down-zoning ordinance on December 10, 1997.
- (4) "There is nothing * * * that suggests a property owner may be precluded from gaining a vested right merely because one city council member expresses an intent to introduce a down-zoning ordinance at some future time."
- (5) Only when it was clear that no compromise could be reached did the alderman introduce the zoning amendment. "At that point [and not early, the property owner] knew or should have known that it was probable it would obtain a building permit for its project.
