Posted by: Patricia Salkin | July 17, 2009

Enactment of Moratoria is a Non-Reviewable Legislative Matter, But Whether Council Acted in Bad Faith in Denying Site Plan is a Question of Fact

Geisler purchased property in the Overlay District of Cedar Falls for the purpose of developing an eight-unit apartment complex.  He submitted a site plan to the planning and zoning commission in May, and during the commission meeting the city planner stated that the plan meet all of the basic ordinance requirements.  At the hearing, there was significant resident opposition to the proposal and the commission voted to deny the application. At the next City Council meeting, the plan was considered amidst expressions of resident concerns and the Council denied the plan citing inconsistencies with the character of the neighborhood.  Further, at this Council meeting, a motion passed to study a moratorium on the construction of multi-family units in the Overlay District.  At the next City Council meeting, a resolution was passed imposing a moratorium on all development/construction of multi-family housing in the Overlay District, and although Geisler submitted a revised site plan to the City Department of Development, it was not processed in enough time to be discussed at that meeting.  The following month, a city official refused to consider Geisler’s site plan and five months later the City Council enacted a down-zoning of the Overlay District prohibiting all development or construction of multi-family housing.

Geisler challenged the site plan denial and the moratorium. With respect to the moratorium, the Iowa Supreme Court said that since the act of adopting a moratorium is a legislative function, the City Council’s actions in so doing are not reviewable by the Court. The Court noted that Geisler’s only recourse is “review by the electorate at the next election.”  The Court also provided good language for planners regarding the use of moratoria, stating, “A moratorium aids a governing body in performing the legislative task of municipal planning.” Further, the Court acknowledged that moratoria “play an important role in municipal planning.”  

As to the site plan denial, the Court noted that Iowa does not follow the “pending ordinance rule” which would have the courts apply the zoning ordinance in effect at the time of the application.  Rather, in Iowa, the courts are required to decide the matter based on the zoning law as it exists at the time of the Court’s decision.  The Court said that there are two exceptions to this rule: 1) where a developer has acquired vested rights resulting from substantial expenditures made in reliance on the previously existing ordinance; or 2) where officials acted in bad faith in denying or delaying approval of a properly submitted and conforming site plan for purposes of amending the zoning to bar the prospective development.  The Court noted that here, Geisler did not acquire vested rights, but a question of fact does remain as to whether the City acted illegally or in bad faith in delaying review of his application.  Therefore, since the court below did not consider this, the Supreme Court remanded the issue of bad faith to the district court
“to determine whether the City illegally denied the site plan and whether an improper purpose existed.”  

Geisler v. City Council of the City of Cedar Falls, 2008 WL 1975420 (Iowa, 7/102/009).

The opinion can be accessed at: http://www.judicial.state.ia.us/Supreme_Court/Recent_Opinions/20090710/07-0474.pdf


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