November/December 2017 Issue

Also in this issue: Limitations on Collecting Attorney Fees for Prosecution of Ordinance Violation     |     Court Rules that Fence Law Applies to Cities and Villages     |     Upper Midwest Municipals Move Forward with Major New Solar Project

New Statute Governing Conditional Use Permits, Variances, and Substandard Lots

Julia Potter | 12.13.17

On November 27, 2017, Governor Scott Walker signed several new laws. One of these laws, Act 67, contains provisions of particular importance to zoned municipalities. Act 67 became effective on November 29, 2017, which means that the new mandates and prohibitions outlined below, including prohibitions against enforcing existing ordinances, are now in full force and effect.

Conditional Uses

While there is considerable case law governing issuance of conditional use permits (“CUPs”), under prior zoning law, there was no specific statutory language regulating such permits. In fact, Wis. Stat. § 62.23 mentioned CUPs only within the context of regulating community-based residential facilities. There were no requirements governing notice or public hearings for CUPs and no statutory criteria for the grant or denial of a CUP. Unsurprisingly, zoning ordinances vary widely on these requirements.

Act 67 creates a definition and establishes a number of requirements for the issuance or denial of a CUP. Under newly created Wis. Stat. § 62.23(7)(de), ​“conditional use” is defined as ​“a use allowed under a conditional use permit, special exception, or other special zoning permission issued by a city, but does not include a variance.”¹

Upon receipt of an application for a CUP, a municipality must hold a public hearing following publication or posting of a Class 2 notice. The new law does not specifically identify the body that must conduct the public hearing. In some municipalities, the public hearing is held by the plan commission and, in others, by the common council or village board. 

Similarly, in a number of municipalities, plan commissions are authorized to grant or deny conditional use permits as well as establish any specific conditions while in others, the plan commission makes a recommendation to the governing body, which then makes these decisions.

The new statute incorporates case law holding that decisions granting or denying CUPs need to be based on ​“substantial evidence,” defined as ​“facts and information, other than merely personal preferences or speculation, directly pertaining to the requirements and conditions an applicant must meet to obtain a conditional use permit and that reasonable persons would accept in support of a conclusion.” 

In addition to basing its decision on ​“substantial evidence,” any requirements or conditions established by the governing body must be related to the purpose of the ordinance and, to the extent practicable, must be measurable. Conditions may include the permit’s duration, transfer, or renewal. If an applicant agrees to meet all the requirements and conditions specified in the municipality’s ordinances or imposed by the municipality, the municipality must grant the permit, although the applicant must be able to show, by substantial evidence, that the requirements and conditions have either been satisfied or will be satisfied.

If a municipality denies an applicant’s CUP application, the applicant may now appeal the denial directly to circuit court. Most municipal ordinances currently provide for an intermediate, administrative appeal to a zoning board of appeals or board of adjustment.

Variances

New definitions and statutory requirements related to variances were also enacted. While these new provisions reflect existing case law pertaining to variances, they are worth noting. 

Wis. Stat. § 62.23 (7)(e)7.a. incorporates existing case law defining an ​“area variance” as ​“a modification to a dimensional, physical, or locational requirement such as a setback, frontage, height, bulk, or density restriction for a structure” and a ​“use variance” as ​“an authorization… for the use of land for a purpose that is otherwise not allowed or is prohibited by the applicable zoning ordinance.”

Wis. Stat. § 62.23(7)(e)7.d. also incorporates existing case law providing that property owners bear the burden of proving ​“unnecessary hardship.” For an area variance, the property owner must demonstrate that ​“strict compliance with a zoning ordinance would unreasonably prevent the property owner from using the property owner’s property for a permitted purpose or would render conformity with the zoning ordinance unnecessarily burdensome.” For a use variance, the property owner must show that ​“strict compliance with a zoning ordinance would leave the property owner with no reasonable use of the property in the absence of a variance.” In all cases, the property owner bears the burden of proving that the unnecessary hardship is based on conditions unique to the property, rather than considerations personal to the property owner, and that the unnecessary hardship was not created by the property owner.

Substandard Lots

The new law also contains the legislative response to Murr v. Wisconsin, 137 S. Ct. 1933 (2017). In Murr, the U.S. Supreme Court held that an ordinance that merged two substandard lots when the lots were held under common ownership did not constitute a taking of private property requiring compensation under the Fifth Amendment. Under that decision, property owners owning two adjacent, substandard lots along the Lower St. Croix River were barred from selling one lot separately.

Almost all zoning ordinances contain prohibitions or limitations on the use of substandard lots.² Some ordinances, like the ordinance at issue in Murr, require that a substandard lot that is held in common ownership with an adjoining lot be combined with the adjoining lot if the owner wishes to construct a building on the adjoining lot. Others prohibit or limit the construction of any structures or buildings on substandard lots irrespective of ownership. Still others require a conditional use permit or a variance before a substandard lot can be developed. 

Under newly-enacted Wis. Stat. § 66.10015³, the legislature significantly curtails the authority of local government to impose limitations on the development of substandard lots. 

Wis. Stat. § 66.10015(1)(e) first defines ​“substandard lot” to mean ​“a legally created lot or parcel that met any applicable lot size requirements when it was created, but does not meet current lot size requirements.”

Wis. Stat. § 66.10015(2)(e) then bars a municipality, under any circumstances, from prohibiting or limiting either (1) conveying an ownership interest in a substandard lot or (2) using a substandard lot as a building site if both of the following apply:

a. The substandard lot or parcel has never been developed with one or more of its structures placed partly upon an adjacent lot or parcel.

b. The substandard lot or parcel is developed to comply with all other ordinances of the political subdivision.

Finally, Wis. Stat. § 66.10015(4) of the statutes prohibits a municipality from enacting or enforcing an ordinance or taking any other action that requires one or more lots to be merged with another lot, for any purpose, without the consent of the owners of the lots that are to be merged. Notably, this provision applies not only to substandard lots; it applies to any attempt to mandate the merger of lots of any size through the enactment or enforcement of an ordinance purporting to do so.

Takeaways

These new provisions will almost certainly require amendments to most existing zoning, land use and land division ordinances. Until municipalities are able to amend these ordinances to conform with the new laws, zoning administrators, plan commissions, boards of zoning appeals and governing bodies should be careful to comply with these new requirements. 

— Eileen A. Brownlee & Julia K. Potter