MUNICIPAL LAND USE DEVELOPMENT CONTROL TOOLS

You asked for a description of tools that Connecticut law grants municipalities to control development, i.e., encouraging development in specified areas while encouraging conservation in others. You also wanted learn about tools allowed in other states, but not Connecticut. This report provides examples of the latter and is not comprehensive. This office and the Legislative Library have a number of resources that provide further information on this topic. Please note that in some municipalities zoning and related powers are granted under special acts rather the statutes described here. These acts may authorize additional or fewer tools than provided by the statutes.

Municipalities have a broad range of tools to affect where development occurs, including land use controls, the ability to take property by eminent domain, and various fiscal tools. Among the land use tools are plans of conservation and development, subdivision control and zoning regulations, transfer of development rights, and the establishment of village and local historic districts.

On the other hand, the law generally provides no authority to impose development impact fees. In addition, while municipalities can affect development by changing their zoning maps and regulations, they must

allow uses that were legal at the time of the change to continue in existence. If they change zoning in a way that denies a person all economic use of his property, they may be subject to a suit challenging them for taking property without compensation.

Municipalities can take land for public purposes pursuant to their eminent domain power. They specifically have the power to take land for open space. There is currently a Connecticut case before the U.S. Supreme Court on whether a municipal agency can take property for the purpose of economic development and then transfer it to a private party.

There a wide range of economic development tools available to municipalities to encourage development in areas deemed appropriate by the municipality. These include providing local option tax exemptions and related incentives, tax increment financing, providing funding under state and local economic development programs, and granting optional property tax exemptions. There are also several fiscal measures municipalities can adopt to promote the conservation of open space.

On the other hand, Connecticut law does not provide for tax classification, a scheme that imposes different tax rates on different uses, other than through the “490” program for open space, farm, and forest land. This means that municipalities must assess all property that is not in this program at 70% its fair market value.

The statutes require municipalities to prepare and periodically update plans of conservation and development, which specify the kinds of land uses a municipality desires. Preparing or amending plans requires municipalities to analyze systematically the effects of different types of development and devise strategies to address them. The process also requires weighing competing needs and concerns (e.g., the need for stores and factories versus the need for hospitals and schools).

The plans may recommend areas that should be preserved as open space. If the municipality's legislative body approves, the owners of land so designated can have them assessed as open space under the “490” program, without factoring in the price buyers are willing to pay for the land’s development potential (CGS §12-107e). There are similar tax incentives for farm and forest land (CGS §§ 12-107c and 12-107d, respectively).

Although the law does not require municipalities to implement their plans, they can do so through their land use regulations, capital improvement projects, and community and economic development programs. The plan’s salience value depends on the extent to which the municipality consults it when making development decisions.

The statutes allow municipalities to adopt subdivision regulations, which require developers to prepare raw land for development in a way that promotes public health and safety. The regulations must ensure:

1. the land can be developed without endangering public health and safety;

2. developers provide for proper water, sewerage, and drainage and take steps to control soil erosion and sedimentation; and

3. proposed streets are in harmony with existing ones.

They must also encourage developers to prepare the site in a way that conserves energy or promotes the use of renewable energy. The regulations may set standards for grading or improving streets and providing public utilities and services.

A zoning commission can divide the municipality into districts and regulate the way people can use land within them. Zoning regulations can address the way developers can erect, construct, reconstruct, alter, or use buildings and structures in each district.

1. regulate the height, number of stories, and size of buildings and other structures;

2. regulate the percentage of the area of the building lot that may be occupied;

3. regulate the location and use of buildings, structures, and land for residential, commercial, and other purposes; and

4. consider the character of the district and its peculiar suitability for particular uses, with a view to conserving the value of buildings and encouraging the most appropriate use of land within the municipality.

By addressing these factors, the regulations control the extent to which people can develop land for a permitted use. For example, minimum lot size and floor area requirements control the number and size of homes in a district while setback requirements specify the distance between a structure and the lot's boundaries.

TDR is a technique that seeks to steer development away from certain areas municipalities want to preserve toward those where they welcome development. It works by separating the right to develop farms, forests, and open space land in designated preservation areas from the land itself. In return, the landowners receive credits equal to the difference between the current use value of their land and its fair market value. The owners recoup the value of the development rights by selling the credits to developers, who can use them to build more units than the zoning regulations normally permit in the designated development areas.

The statutes allow municipalities to implement TDR singly or jointly. A municipality adopting TDR by itself must do so through its zoning regulations, which may include provisions for varying density limits in connection with a transfer. Municipalities can adopt a joint TDR if their legislative bodies approve.

CGS § 8-2j authorizes zoning commissions to adopt regulations to create village districts and protect their distinctive character, landscape, and historic structures. If a municipality establishes a district, the regulations must provide that:

1. proposed buildings and modifications to existing buildings be harmonious with their surroundings and their terrain, and to the use, scale, and architecture of nearby buildings to which they are functionally or visually related;

2. spaces and structures visible from the road be designed to enhance the visual amenities in the area around the proposed building or modification;

3. the characteristics of residential or commercial property, such as its color and materials, be evaluated for their compatibility with the local architectural motif, and the maintenance of views, historic buildings, monuments, and landscaping; and

4. removal of or disruption to historic, traditional, or significant structures or architectural elements be minimized.

A few municipalities have established village districts, including Brooklyn, Madison, and Middletown. The Middletown regulation (Middletown Planning and Zoning Code § 39d) is available online at http://www.middletownplanning.com/zoningcode/pzcode39D.html.

Creation. A municipality may create a local historic district under CGS § 7-147a et seq. to promote the educational, cultural, economic, and general welfare of the public by preserving and protecting the distinctive characteristics of buildings and places associated with the history of the municipality, state, or nation, or a particular architectural style or period. There are local districts in more than 65 municipalities. Federal law also provides for the establishment of national historic districts, but such districts do not regulate private developments there.

Certificates of Appropriateness. The commission uses a mechanism called a certificate of appropriateness to regulate development in the district. A certificate is required to: (1) erect a new building or alter an existing building within the district, (2) issue a building permit for such actions, and (3) issue a demolition permit for a building in the district. In the case of alterations, the review must address the exterior architectural features of the building. A certificate is also needed for the use of land for non-residential parking. This requirement also applies to the alteration or expansion of any such existing parking within the district. The statute specifies the procedure for issuing certificates.

OLR report 2003-R-0921 provides further details about local historic districts and discusses the advantages and disadvantages of using this techniques vs. village districts as a means of promoting economic development.

Unlike several other states, Connecticut generally does not allow municipalities to impose impact fees on developers to cover the costs of improvements such as additional classrooms necessitated by the development. The law does not preclude municipalities from analyzing the anticipated costs and benefits of a proposed development as part of the approval process. It is not clear whether they can require a developer to pay for such analyses.

The Connecticut Supreme Court has ruled municipalities could only impose such fees if the statutes specifically authorized such action (Avonside Inc. V. Zoning and Planning Commission of Avon, 153 Conn. 232 (1965)). Subsequent to this decision, the legislature has specified situations when municipalities may adopt fees instead of meeting their open space, parking, or affordable housing requirements. For example, municipalities may adopt regulations allowing applicants to pay a fee of 10% of the land's pre-subdivision appraised value (or a combination of land and fee) to the municipality in lieu of providing open space.

Similarly, planning and zoning commissions can adopt regulations allowing developers to pay a fee instead of providing the number of parking spaces required by a subdivision or zoning regulation (CGS § 8-2c). Commissions adopting an inclusionary zoning ordinance can require developers to contribute to a housing trust fund (CGS § 8-2i). Municipalities must use the fees from each of these three areas for related purposes and not for general municipal functions.

By law, zoning regulations may not prohibit the continuance of any nonconforming use, building, or structure that was legal when the regulations were adopted. While this protection can lapse if the owner fails to continue the nonconforming use, the municipality must consider if the owner actually intended to abandon the use. Similarly, construction on a vacant lot (other than one created by demolishing existing structures) that is part of an approved subdivision plan is not subject to zoning changes adopted after the subdivision was approved.

Municipalities have the power to take property, with compensation, for public purposes such as roads and schools. These infrastructure and public sector investments can often affect how and when development occurs. Municipalities can also use their eminent domain powers for economic development purposes, e.g., by redeveloping blighted areas. The limits of this power are a subject of a Connecticut case currently before the U.S. Supreme Court. OLR memo 2004-R-0394 discusses the state supreme court decision in this case, Kelo v. New London (268 Conn. 1 (2004)).

In addition, CGS § 7-131b(a) specifically authorizes a municipality, by vote of its legislative body, to acquire property located in an area designated for open space in the municipality’s plan of conservation and development. It may acquire the property by purchase, condemnation (i.e., eminent domain), gift, devise, lease, or other method. The municipality must maintain, improve, protect, limit the future use of, or otherwise conserve open space land acquired under this provision.

Municipalities may exempt privately funded commercial and other types of development projects from property taxes according to a statutory schedule (CGS § 12-65b). It bases the amount and exemption period on the project’s value.

In addition, municipalities can provide property tax exemptions for: (1) contaminated property that is remediated and redeveloped, (2) properties being developed under the Urban and Industrial Sites Reinvestment Program, (3) up to $100,000 of assessed value of farm buildings, other than a farmer’s house.

Tax increment financing is a technique that uses the anticipated increase in tax revenues associated with a project to back bonds or other debt used to pay for the project. Connecticut law allows municipalities to use incremental property tax revenue to finance economic development projects, including the remediation of contaminated sites (brownfields) for this purpose. The law dictates how municipalities must determine the incremental revenue and requires them to use it to repay the debt. Further information on Connecticut’s law can be found in OLR report 2001-R-0737.

The law gives municipalities the tools to help developers improve or rehabilitate existing properties for different uses. Municipalities can reduce a private developer’s cost to improve or rehabilitate a property by acquiring, remediating, and improving it before conveying it to the developer. They can do this under the statutes governing redevelopment (CGS § 8-124, et seq.); urban renewal (CGS § 8-140, et seq.); municipal development (CGS § 8-186, et seq.); and rehabilitation of abandoned industrial and commercial buildings (CGS § 8-290, et seq.).

Municipalities can use funding from several state programs to encourage development in areas that they believe are appropriate for development. All municipalities qualify for Manufacturing Assistance Act funds, which they can use to develop industrial parks, supporting infrastructure, or other economic development related projects. The funding level depends on the project’s location and whether two or more municipalities are sponsoring the project (CGS § 32-223(c)).

The Urban Action grant program is open to (1) distressed municipalities, (2) public investment communities, or (3) urban centers under the state’s Plan of Conservation and Development (C&D). The Office of Policy and Management (OPM) annually revises the list of municipalities that meet the first two criteria based on statutory definitions; it revises the list of municipalities that meet the third criterion every five years when it amends the state Plan of C&D. Municipalities can use the grants for a wide range of physical development and social service projects.

Municipalities with fewer than 30,000 residents that are ineligible for Urban Action grants can seek funding under the Small Town Economic Assistance Program (STEAP). Each eligible municipality may receive no more than $500,000 per fiscal year under the program toward all projects. STEAP grants can be used for the same purposes as Urban Action grants. An OPM Website http: //www. opm. state. ct. us/secr/services/steap. htm and OLR Report 2002-R-0563 provide additional information about STEAP.

Municipalities with fewer than 50,000 residents can seek funding under the small cities component of the federal Community Development Block Grant (CDBG) program, which is administered by the Department of Economic and Community Development (DECD). DECD awards these grants annually on a competitive basis. (Larger municipalities are entitled to grants under other provisions of CDBG. ) Municipalities can use the grants to revitalize neighborhoods, expand affordable housing and economic opportunities, and improve community facilities and services. Further information about the Small Cities Program is available on the DECD’s Website, http: //www. ct. gov/ecd/cwp/view. asp?a=1098&q=249736.

In addition to these general purpose programs, all municipalities can apply for assistance under the Urban Sites Remedial Action Program. In this program, the Department of Environmental Protection (DEP) expeditiously reviews, inspects, and approves contaminated property in any municipalitie for cleanup and redevelopment if DECD determines that doing so would benefit the state’s economy. To be eligible, the owner or developer of the contaminated property must be willing and able to conduct the investigations and remediate the site. For properties located in distressed municipalities or targeted investment communities (those with enterprise zones) DEP will investigate and if necessary perform the remediation on the properties. Further information about the Urban Sites Remedial Action Program is available at http: //www.ct. gov/ecd/cwp/view. asp?a=1101&q=249844.

OLR report 2004-R-0109 provides additional information about the Manucturing Assistance, Urban Action, Small Cities, and Urban Sites Remedial Action programs.

Municipalities routinely work with land trusts and related organizations in seeking funding under DEP programs and in preserving open space using their own resources. Either can assume responsibility for funding the acquisition, owning the land, and maintaining it. The municipality or organization can acquire the land outright in a fee simple purchase or acquire a lesser interest, such as an easement.


February 10, 2005		2005-R-0178
MUNICIPAL LAND USE DEVELOPMENT CONTROL TOOLS

By: Kevin E. McCarthy, Principal Analyst