Moab’s city council and planning commission received answers to their questions about private property rights, especially regarding how those relate to the recently passed assured housing policy and the pending Planned Affordable Development Ordinance.
Brent Bateman, lead attorney in the Utah State Property Rights Ombudsman’s Office, led the discussion and fielded questions. Council members, planning commissioners and a few citizens asked questions at the joint workshop held at 5 p.m. prior to the regular city council meeting on Jan. 22.
Bateman told the assembled city council and planning commissioners that his office’s job is to “protect the property rights of citizens” and to help prevent citizens from bringing lawsuits against local governments. Early in the workshop, Council Member Mike Duncan raised three issues that dominated most of the discussion: the Workforce Assured Housing Opportunities Ordinance (WAHOO), the recent controversy over the city’s decision to remove overnight rentals as a permitted use in the C-2 zone (which was later reversed), and the oft-debated PAD.
Bateman began by addressing the WAHOO, saying that his office earlier provided advisory opinions that warned against implementing an assured housing policy because they found them to be illegal in Utah. Bateman noted those two opinions were specifically about requirements for housing developments, not hotels. While advisory opinions do not force action, they do carry legal weight. Bateman explained if an advisory opinion is provided, the issue goes to court anyway and the court agrees with the opinion, then the court can award attorney’s fees.
Bateman explained the reasoning behind the opinions: “For this kind of requirement that someone give a fee in lieu of assured housing, you have to show a cause and effect. You have to show the development is causing a problem that the thing you’re asking it to do solves.” He noted that since Moab’s assured housing policy targets commercial developments rather than residential ones, it will be easier to prove cause and effect. The nexus study that originally inspired Moab’s assured housing ordinance is adequate to show cause and effect. Bateman said, however, that determining proportionality is still quite difficult.
“The fee is not illegal,” Bateman said, but he continued, “Having said that… my advice to you all is that great care must be taken in doing this.” Bateman pointed out there is no simple formula that can determine a fee equivalent to the impacts caused by a certain development. “What you ask them to do has to be proportional to the impact they’re creating,” he said. Bateman expressed his opinion that basing the fee solely off a development’s square footage is too simple. “You cannot just say ‘you have this many square feet, this is what you owe,’” he said.
Mayor Emily Niehaus asked if the advisory opinion included a recommendation for an alternative. “No,” Bateman responded. “The reason why is because there’s no way to make one… What the case law says is that you have to make an assessment of the impact from the individual developer before you know how much to charge.” He noted other factors like existing housing stock and workforce availability need to be considered as well. “If there’s already a problem here in Moab, you cannot use these fees to solve that problem. The only thing you can do is respond to that development’s impact,” Bateman said.
Planning Commission Member Kya Marienfeld pointed out the WAHOO’s formula to calculate the fee in lieu is based on square footage. She also noted that while the square footage formula is simple, it is a more objective metric than taking developments on a case-by-case basis, which could lead to accusations of unfair treatment. “The overarching ordinance that applies to everything equally seemed more palatable,” Marienfeld said.
Bateman replied, “You’ve illustrated the problem. It’s not a question of me having a recommendation… I don’t think it’s possible to do.” He noted how similar fees are charged in many other states, but no one has devised a perfect answer. “There’s no easy solution that I’ve ever been able to tell, not from using examples from other states, not from looking at the case law,” Bateman said.
Planning Commissioner Allison Brown suggested connecting the fee in lieu to the number of hotel rooms. Bateman responded that was still oversimplifying the issue. “It’s no better than square footage,” he said. Planning Commissioner Marianne Becnel noted that they considered including other factors such as available homes, price per square foot for real estate, employment rate at the time of development, and number of jobs created by the development. “If we made it a little bit more complex, would that be a better way to be more fair?” Becnel asked.
Bateman answered, “I’m not saying that just making it more complex will make it better. What I’m saying is that you have to do this calculation every time somebody develops. You can’t just do a blanket calculation.”
Discussion about the WAHOO concluded with Bateman warning the council there will likely be legal battles ahead. “Every developer that comes along is probably going to want to challenge it,” Bateman said, emphasizing, “My point is, you’re not going to get one challenge and win it and be done, the next guy is going to come along and have to pay the fee and he’s going to challenge whether that fee correctly applies to him.”
The conversation then transitioned to discussing the recently reneged decision to remove overnight rentals from the C-2 zone and the city’s legislative powers more generally. Bateman described the “tremendous power” of the city council’s legislative abilities. He noted the two limitations are citizens’ ability to vote council members out of office and the Utah Legislature. Marienfeld brought up a possible hotel moratorium and a question arose regarding the city’s ability to outright ban new hotel development, which Bateman predicted would not sit well with state representatives, many of whom are developers.
Council Member Kalen Jones brought up the commonly repeated argument that the city’s zoning changes decrease property values. Bateman pointed out, “downzoning is legal, reducing people’s property value is legal.” He said property owners thinking they have a right to maintain their property value is a “major misconception.” Bateman did acknowledge there is some nuance because local governments can “downzone somebody to where it does become a taking.” He said there is a complex matrix that determines the threshold on a case-by-case basis, but simply put, “downzoning is fine, [but] downzoning too far is not fine, wiping people out is not fine.” Bateman concluded, “If you want to get re-elected, you should protect people’s property values.”
When Mayor Niehaus asked for more specifics about a threshold for where downzoning becomes a taking, Bateman brought up a case example from the City of Sandy. He said the case involved a zoning change that caused a business to lose three-fifths of its property value. The court ruled it did not equate to a taking, according to Bateman.
One citizen from the audience who requested not to be named asked for clarification about whether the PAD overlay would constitute a zone change. Bateman answered that it would. City attorney Chris McAnany noted that it is called an overlay rather than a zone change because it applies to multiple zones and that developers would need to meet “stringent requirements” to take advantage of the higher density allowed by the PAD.
Most of the discussion about the PAD revolved around the city’s legal right to offer higher density as an incentive in exchange for affordability. Bateman pointed out the city can do a zone change for any reason. He noted cities also have the option to do quid pro quo agreements with developers where zoning laws are adjusted in exchange for a tangible benefit like the developer building a park. He also said such actions could be done legislatively, like the PAD, or administratively without a zone change. Though he did say the closer a decision gets to a zone change, the more likely it will be deemed a legislative action, which can then be challenged by a citizen referendum. In regard to the PAD, Bateman said a change in density will almost always be considered legislative.
Becnel asked if a zone change can be done in exchange for affordable housing. Bateman responded that there is no clear answer, but he warned: “You need to always be careful about doing a zone change in exchange for anything.” Bateman said, “Your legislative power arises out of the police power. There is ample law in Utah that says you cannot contract away your police power, which means that you cannot say ‘if you do this, I will give you a zone change’… But you can decide to give them a zone change for whatever reason you want.” He added, “If someone can make you want to do a zone change through affordable housing or whatever, that’s great.”
Bateman noted that making a zone change conditional on a developer’s actions can count as contracting away police power since it would bind future councils. “A zone change can only be a ‘want to,’ so if you make an agreement that requires you or some future council to change the zone that’s when you’ve contracted away your police power.”
On the topic of affordable housing, Bateman pointed out that current Utah law requires all municipalities to include affordable housing in their general plans. Furthermore, there is currently a bill, SB 34, being considered by the Utah Legislature that will require cities and counties to carry out affordable housing plans or risk losing state transportation development funds. Bateman noted, “In all likelihood it’s going to pass.” Mayor Niehaus jumped in to add that Moab has already taken the steps like allowing accessory dwellings and buying land for affordable housing.
Said Bateman, “Affordable housing is a very touchy subject. It’s like putting in a group home somewhere. No matter where you put it, you put it in the wrong place.”