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OP-ED: Court tackles city-imposed road dedication obligations.

Byline: Edward Sullivan and Carrie Richter

When dividing land to accommodate increased density, a local government typically requires the extension of necessary utility systems such as water, sewer and stormwater. Sometimes pre-existing service lines lack necessary capacity to serve the development, and in those cases, lines must be up-sized.

The same is true with roads. When a road lacks capacity to support vehicles traveling to and from a proposed development safely and sufficiently, a local government may require the dedication of additional land to accommodate widening the road or provision of a new road, the expenditure of money to make road improvements, or a signed agreement not to object to a shared effort between property owners to make necessary road improvements sometime in the future. This last option is known as a waiver of remonstrance a property owner agrees not to remonstrate against creation of a local improvement district requiring owners to contribute a proportional share to stated road improvements.

All local governments are required to adopt transportation systems plans (TSP) and road design standards that identify deficiencies within the existing transportation system and project which road improvements will be necessary to serve projected development over the planning horizon, thereby providing concurrency between road and development demands. Local regulations often require that roads abutting a development (and the roadways adjacent) be improved to meet the design standards set forth in the TSP. As a result, failure to dedicate land or improve a roadway to meet the current design standards could be a basis for denying an application. And rather than impose denial, a local government will require improvements to the under-sized roadway to meet the standards through conditional approval of an application.

The limit to which a local government can demand these improvements (or exactions) is provided by the Fifth Amendment and 14th Amendment of the United States Constitution under two U.S. Supreme Court cases: Nollan v. California Coastal Commission and Dolan v. City of Tigard. Under these two cases, a local government may exact a dedication of private property as a condition of approval if the government demonstrates: 1, a nexus between a governmental interest and the exaction of property; and 2, that the nature and extent of the exaction are roughly proportional to mitigate the effects of the proposed development.

Last month, in Hill v. City of Portland, the Court of Appeals reminded local governments, once again, how these obligations and limitations work together. The petitioner sought approval to partition a single parcel into a three-lot residential development and, as a condition of approval, the city required the dedication of 7 feet of right of way along the development frontage so that the streets could comply with the city's street design standards. The city required this dedication even though it found that "the transportation system is capable of safety supporting the proposed development in addition to the existing uses in the area for all travel modes" and that "no mitigation is necessary for the transportation system to be capable of safely supporting the proposed development in addition to the existing uses in the area."

The city went on to determine that the additional traffic caused by this development would constitute 5 percent of the traffic using this roadway and that the cost of dedicating the additional right-of-way represented only 4 percent of the capacity-increasing cost, so the exaction was roughly proportional to the impacts resulting from the development. As for the roadway improvements necessary to satisfy the design standards, the city found that it could have required construction of the improvements to satisfy the design standards. But rather than impose the full-cost of construction, the city would require the petitioner to sign a waiver of remonstrance for shared contribution to the improvements in the future.

However, it was the finding that the road could operate safely including the additional traffic generated by the proposed development that sealed the city's fate. The Hearings Officer and the Land Use Board of Appeals found that the approval criterion requiring that development meet the adopted road design standards and therefore denial, if that criterion was not satisfied, was justified and constituted a sufficient basis to establish a nexus between government interest the desire to reduce road congestion from the development.

However, the Court of Appeals disagreed. It determined that it is not sufficient to rely on the design criterion alone in order to satisfy the Nollan government interest test. Rather, "the government must demonstrate how the proposed project's impacts, either alone or in combination with other construction, are ones that 'substantially impede' the interest identified by the government." For the relevant criterion to dictate denial, the applicable standard may not be abstract, but must take the impacts from the particular proposal into account. The city erred by not examining how the impacts from the proposal would substantially impede the interest furthered by the design standards and justifying any conditions imposed consistent with those findings.

Similarly, regarding the waiver of remonstrance, the court also concluded that LUBA erred in affirming the city's exaction. The proposer test is whether there is evidence to show a need for a local improvement district and whether the development will benefit by those improvements. However, the city found that it was the failure to meet the road design standards that could serve as the basis to create a local improvement district rather than any particular need triggered by this development. However, the court did suggest that there may have been evidence in the record to support such a need-driven finding.

Having reversed LUBA's decision, the matter has now been remanded to the city, which may be able to correct these deficiencies by revisiting how traffic from this development will impact the safety and efficiency of the road system, notwithstanding its previous findings. In any event, this case illustrates the demanding obligations imposed on local governments in making exactions. In this time of an apparently insatiable appetite for additional development, it is critical that local government planners demand the substantial evidence to justify findings to make these decisions and take the time necessary to explain them.

Edward Sullivan is a retired practitioner of land use and municipal law for more than 45 years. Contact him at esulliva@gmail.com.

Carrie Richter is an attorney specializing in land use and municipal law at Bateman Seidel. Contact her at 503-972-9903 or crichter@batemanseidel.com.

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Publication:Daily Journal of Commerce (Portland, OR)
Date:Sep 11, 2018
Words:1072
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