Wednesday, July 13, 2016

Ashby and the the Future of Land Use in the Unzoned City

  Ashby-high-rise-lotThe prominent “Ashby High-Rise” land use case has been decided by the Texas court of appeals. In ruling that a project that is legally permissible can’t be stopped or penalized by neighbors, the court provided needed clarity for property law and for the future of development in Houston and in other American communities. The decision means that a property owner or developer can rely on the land use rules that are on the books without having to worry about a neighborhood veto of an otherwise legal plan. The case has gotten some national and plenty of local attention, and is an important decision for property rights, land use regulation, and the rule of law.

In a huge win for the developers, the court declared that the neighbors can’t get nuisance damages for a project that hasn’t yet been built—that is, there can’t be a remedy for a merely “prospective” nuisance. It also upheld the trial court’s decision that there is no basis to stop a project that is legally entitled, because that would be and end-run around the planning, zoning, and permitting process.

The controversy has been raging since 2007, when the developers sought approval for a 23-story residential project on a 1.6-acre tract in an affluent neighborhood close to the central city area of Houston. There were many high-profile protests to “Stop [the] Ashby High-Rise”; failed attempts at changing the law to stop it; and a lawsuit against the City. Ultimately, perhaps in part because of strong Texas property-rights laws, the City agreed to grant the permit. In 2013, the neighbors sued, claiming that the project would be a nuisance.

Traditional property law is that an owner of property can use it any way they want. The doctrine of nuisance limits that freedom to prevent an owner from using their property in a way that intentionally or unreasonably injures another. The Ashby neighbors invoked nuisance law to argue that they were unreasonably harmed by a project that was legally permitted but allegedly “out of place” in their neighborhood near downtown Houston.

The trial was conducted by excellent lawyers on both sides. The jury found that the project, if it were to be built, would constitute a nuisance—but only to the immediately adjacent neighbors. After further hearings, the court upheld the nuisance verdict, but denied the neighbors’ real wish: an injunction to stop the project. Both sides appealed: the developers argued that there can be no damages for a merely “prospective” nuisance; and the neighbors disputed the denial of their more important goal, the injunction.

The Ashby appellate court held that the neighbors of the proposed high-rise aren’t entitled to damages for a project that hasn’t yet been built. The law of nuisance is limited to awarding remedies for a harm that has actually been caused. In holding that there can be no right to damages for a merely prospective nuisance, the court of appeals correctly interpreted the law. This will provide needed clarity for property law after a case that has received national attention.

Some might be tempted to blame the drawn-out controversy on Houston’s lack of traditional zoning. But the case actually turned on the fact that Houston still does have a lot of land use rules, and the courts held that the developers had followed them.

The whole point of modern land use law is to provide some guidance for these case-by-case disagreements about nuisances. If a property owner wants to build, rebuild, or modify her built environment, then the land use regulations on the books should be the guide—without having to guess, and then pay off for, the potential objections of neighbors invoking “not in my backyard” (“NIMBY”) rhetoric. In fact, this is a big part of why the planning and zoning movement took off in the Progressive Era of the early Twentieth Century: to have prospective rules in place, rather than relying on unsatisfying after-the-fact remedies through nuisance law.

The city of Houston, Texas is famous (or infamous) as the only large city in America that doesn’t have traditional zoning. We are, in fact, very lucky to be the “Unzoned City.” Leading land use experts from across the political spectrum agree that an overregulated system chokes off the kind of contemporary development that many people want—mixed-use, walkable, transit-oriented, “smart growth” urbanism. In most cities, this type of traditional neighborhood development is illegal. Zoning also constricts and channels suburban development, and forces those who prefer a more suburban lifestyle to commute ever-longer distances to race beyond the sprawl.

If a zoning code is based on a previous generation’s land use ideals—and it almost inevitably will be, because land use rules are “sticky”—then it will thwart the kind of modern development that part of the market desires—meaning that we won’t have as many options for where to live, work, and play. In the current market, both millennials and retiring boomers show signs of wanting to live in communities with more density and walkable urbanism. Middle-aged Gen-Xers and others are moving to or remaining in the suburbs. If Houston is truly the “Opportunity City,” then it should continue to provide this wide range of options, and the law shouldn’t constrain either preference. Partly because of Houston’s unique position, this case has been discussed in national property law forums and media outlets, as well as at the Rice University Kinder Institute for Urban Research. This case is a perfect example of the challenges of preserving property rights and community desires in America’s “unzoned city.”

But even our unique “zoning lite” system in Houston still has a lot of land use and development rules—minimum lot sizes, high-density rules, urban/suburban distinctions, historic preservation, parking requirements, and other land use laws that, in any other city, would be part of the zoning code. You could even call our system “de facto zoning.” We should resist the temptation to over-regulate, because this relative freedom is an important part of Houston’s history and gives us the opportunity to try new things in land use and development.

The upshot of the Ashby case is that if an owner follows the rules, then their property rights should be protected. If someone wants to use and develop their property, and their plans comply with all of the legal requirements, they shouldn’t be vetoed by neighbors. NIMBY arguments tend to restrict freedom, deny property rights, and thwart the development that the market desires, just to try and keep undesirable projects and people out of the community.

The Ashby high-rise saga also reflects a fundamental inequity in the housing market and the political process. If a wealthy neighborhood could pool resources to almost stop an undesired luxury high-rise, what recourse would other communities have? In any land use regime—typical over-regulation, or Houston’s “zoning lite”—the basic purpose of land use law is to provide the ground rules of the game so that everyone knows how to play, and what they can do within their property rights.

The greatest feature of Houston’s land use regulatory system is that it provides some basic rules for development but still allows a wide range of options for property use. This allows the Houston community—meaning property owners, developers, and future residents looking to join us—to respond to changing market demands. Our “zoning lite” approach is one of the key things that makes us unique and positioned to succeed as a leading global city for the future. The Ashby decision gets the law right and maintains this unique balance for the future.

Matthew Festa is a Professor at the Houston College of Law and a Kinder Scholar at Rice University, specializing in property, land use, and local government law. He testified as an expert witness for the developers at the trial. This article will be cross-posted at the Rice Kinder Institute's Urban Edge Blog.

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