Opinion ID: 1201899
Heading Depth: 3
Heading Rank: 2

Heading: Illegal Contract Zoning

Text: Numerous courts have criticized contract zoning, declaring it invalid per se. See Judith W. Wegner, Moving Toward the Bargaining Table: Contract Zoning, Development Agreements, and the Theoretical Foundations of Government Land Use Deals, 65 N.C.L.Rev. 976, 982-83 (1987). While these courts have advanced several grounds for disapproving contract zoning, the most common rationale is that contract zoning is inherently flawed as a problematic blend of contract and police powers. Id. at 982. Their opinions typically condemn contract zoning as an illegal bargaining away or abrogation of the police power. See, e.g., Hartman v. Buckson, 467 A.2d 694, 699-700 (Del. Ch. 1983); Hartnett v. Austin, 93 So.2d 86, 89 (Fla. 1956) (en banc). As one commonly cited case states, Zoning is an exercise of the police power to serve the common good and general welfare. It is elementary that the legislative function may not be surrendered or curtailed by bargain or its exercise controlled by the considerations which enter into the law of contracts. V.F. Zahodiakin Eng'g Corp. v. Zoning Bd. of Adjustment, 8 N.J. 386, 86 A.2d 127, 131 (1952). We agree that in most situations contract zoning is illegal. However, we do not subscribe to a per se rule against all forms of contract zoning, nor does our rationale rest on the bargaining away or abrogation of the police power. Rather, we believe that contract zoning is illegal whenever it arises from a promise by a municipality to zone property in a certain manner, i.e., when a municipality is either a party to a bilateral contract to zone or when a municipality is a party to a unilateral contract in which the municipality promises to rezone in return for some action or forbearance by the other contracting party. A contract in which a municipality promises to zone property in a specified manner is illegal because, in making such a promise, a municipality preempts the power of the zoning authority to zone the property according to prescribed legislative procedures. Our statutes require notice and a public hearing prior to passage, amendment, supplement, or repeal of any zoning regulation. NMSA 1978, § 3-21-6(B) (Repl.Pamp. 1985). The statutes also grant to citizens and parties in interest the opportunity to be heard at the hearing. Id. By making a promise to zone before a zoning hearing occurs, a municipality denigrates the statutory process because it purports to commit itself to certain action before listening to the public's comments on that action. Enforcement of such a promise allows a municipality to circumvent established statutory requirements to the possible detriment of affected landowners and the community as a whole. See County of Ada v. Walter, 96 Idaho 630, 533 P.2d 1199, 1201 (1975) (oral agreement to allow mobile homes on property was invalid because it did not comply with county zoning ordinance); Midtown Properties, Inc. v. Township of Madison, 68 N.J. Super. 197, 172 A.2d 40, 45-46 (Ct.Law Div. 1961) (contract to zone illegal because it circumvented mandatory zoning procedures), aff'd, 78 N.J. Super. 471, 189 A.2d 226 (Ct.App.Div. 1963) (per curiam).