Vested rights remain a controversial, and at times, emotional issue, for property owners, neighbors and the local government. Absent a development agreement, even after a property owner secures necessary local approvals for development such as a subdivision plat, depending upon when the owner applies for a building permit and/or whether there has been substantial investement in the project, subsequent changes in zoning regulations may, in essence, supercede the prior approvals. States have various “vesting” rules, and for the most part the tests are set out in the common law (or caselaw). What follows is a recent appellate case from New York.
In the 1970s, the petitioner’s predecessor in interest obtained final site plan approval for a two-phase, 330 multi-family rental unit project on 79 acres. In 1976, during Phase I of the project, the town amended its zoning to allow only single-family homes on 40,000 square foot lots. In 1979, Phase I was completed, in accordance with the zoning in effect at the time of initial approval. Phase I included 204 units and certain infrastructure intended to benefit all 330 contemplated units. The petitioner purchased the property in 1979. In 1986 the town approved the petitioner’s request to subdivide the property into two parcels, with the first parcel containing the 204 already constructed units (which the petitioner planned to sell as condos), and the second parcel was reserved for future development. A 1989 application by the petitioner to construct 126 multi-family units on the second parcel was abandoned after the planning board issues a positive declaration under SEQRA (the State Environmental Quality Review Act) following a determination by the New York City Department of Environmental Protection that the sewage treatment plant was deficient for its current use. In 2003, the town again amended its zoning (over objections of the petitioner) which allows only single-family homes on four-acre lots on the subject property. Despite the amended zoning, in 2004 the petitioner applied for amended site plan approval to build 68 units of multi-family housing on the second parcel, and this request was denied by the planning board in 2005 finding that the petitioner did not have vested rights to develop the parcel pursuant to the 1972 site plan approval.
The Court determined that no vested rights accrued to the petitioner and that the development of the parcel was abandoned in the 35 years since the original site plan approval. For vested rights to attach there must be substantial expenditures and substantial construction. Although the Court noted that there was some evidence of extra expenditures (e.g., the infrastructure improvements intended to service later construction), there was no evidence of substantial construction. The Court said that the petitioner failed to acquire vested rights in future development based solely upon the extra expenditures thirty years ago in contemplation of future development. The Court further found that the petitioner abandoned its plan to develop the second parcel due to its failure to act over a period of decades.
RC Enterprises v. Town of Patterson, 42 A.D.3d 542, 840 N.Y.S.2d 116 (2nd Dept. 2007).
