Can you rely on zoning to protect your real estate investment?
Since 1926 when the U.S. Supreme Court held that local governments had valid interests to enact zoning regulations, zoning has been a central part of land use regulation by municipalities. Zoning ordinances have provided governments with the tools to manage the growth and development of their communities.
While reading an article on a recent land use proposal in Portland, I noticed an interesting quote about zoning from a landowner:
““It used to be that zoning was a guarantee that what’s going to happen around you, you can understand,” Pam Macomber said. “The zoning that’s there now, we probably wouldn’t have bought the property.”
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Ms. Macomber’s thoughts are interesting, however, I would argue they are a bit out of sync with reality. I can understand the desire to review zoning to determine what types of uses are permitted in the immediate future. I am not saying there is no value in that. In fact, I would encourage anyone who is making an investment in real estate to understand what uses are allowed on their property.
Additionally, prohibitions against "Spot zoning" may also give some protections to landowners looking to rely on zoning. The Maine Supreme Court defines spot zoning as "any zoning ordinance that is designed to specifically benefit a particular parcel of land." (See City of Old Town v. Dimoulas)
However, when looking to the big picture, I would suggest that the authority to enact zoning regulation has always included the ability to update or modify those regulations to adapt to changing conditions in a city. This is far from the "guarantee" that Ms. Macomber refers to. For example, the Euclidean Zoning (i.e. single use zoning that keeps different uses separated) that was upheld in 1926 case reference above has largely gone out of style with planners and many ordinances have been updated to reflect this.
Local governments should always look at new ways to regulate land use to improve their communities. Therefore, I'm not sure it's entirely safe to assume that because zoning doesn't allow a use now, it guarantees it won't be allowed in the future.