Our Feed

We are involved in our communities, our profession, and our clients' associations and activities.

Pressing Pause: Answers to Seven Frequently Asked Questions About Moratoriums

Although townships will often navigate “routine issues,” every so often a township will be faced with a unique issue that may not be adequately addressed by a township ordinance. For example, there may be new development trends for a particular land use in a region that is not provided for in a township’s zoning ordinance. In these cases, townships will many times want to adopt a “moratorium” to study the land use and to adopt appropriate zoning regulations.

This E-Letter is organized into seven frequently asked questions to help townships understand the process to enact enforceable moratoriums. As you will see, cases involving moratoriums are often associated with controversial issues (sober living homes, short-term rentals, and utility-scale wind turbine and solar energy development). Moreover, moratoriums also can cause temporary economic impacts on landowners heightening risks of litigation. Accordingly, it is important that townships utilize a thoughtful and prudent process when enacting any moratorium.

1. What is a moratorium?

“Moratorium” is often a loaded word, especially in the context of land use and zoning. Although some may associate “moratorium” with the word “ban,” “moratorium” is defined by Black’s Law Dictionary as “[t]he suspension of a specific activity.” See MORATORIUM, Black’s Law Dictionary (11th ed. 2019). When applied in the township law context, a moratorium is typically used as a temporary time period of a year or less to pause consideration and permit issuance related to a specific topic (e.g., signs) while a township develops new regulations to better address the topic. See e.g., Cent Adver Co v St Joseph Tp, 125 Mich App 548, 555; 337 NW2d 15 (1983).

2. Why would a township enact a moratorium?

Townships often impose moratoriums for issues that are not adequately addressed by current township ordinances. For example, the popular Lake Michigan tourist destination near Chicago, New Buffalo, Michigan, enacted a moratorium on all permit applications and registrations of short-term rental units (e.g., rental units like those on AirBnB that are rented generally for periods less than one month). Moskovic v City of New Buffalo, No. 1:21-CV-144, 2022 WL 16548948, at *1 (WD Mich, October 31, 2022), reconsideration den No. 1:21-CV-144, 2023 WL 179680 (WD Mich, January 13, 2023). In that case, New Buffalo’s City Council enacted a short-term rental moratorium to adopt new regulations with the intent to better address potential issues associated with short-term rental units such as: (1) diminished permanent housing stock resulting in decreasing school enrollment; (2) traffic and parking concerns; and (3) the character and stability of neighborhoods. Id.

On the other hand, municipalities may also need to enact moratoriums out of absolute necessity to address a current problem. In Chelsea Investment Group, LLC, the Court of Appeals analyzed a case where the City of Chelsea followed a moratorium issued by the Michigan Department of Environmental Quality (“MDEQ” now EGLE) on new water and sewer permits due to capacity issues with the city’s wastewater treatment plant. Chelsea Inv Group LLC v Chelsea, 288 Mich App 239, 792 NW2d 781 (2010).

3. How can a township enact a moratorium?

Most Michigan case law infers that townships should be able to enact moratoriums that are less than one year long simply by resolution. Nonetheless, some case law (and arguments made by those that may be “aggrieved” by moratoriums) suggests that it may be prudent to also enact a moratorium by police power ordinance and in some cases following the zoning ordinance adoption process set forth by the Michigan Zoning Enabling Act.

A variety of Michigan case law finds that townships can impose moratoriums to prevent consideration of permits on certain topics by resolution. As recently as 2021, the Michigan Court of Appeals upheld a seven-month moratorium on processing and considering requests for approval of gravel mines that was initiated by resolution. Metamora Twp v Am Aggregates of Michigan, Inc, No. 349069, 2021 WL 1236108, p *15 (Mich Ct App, April 1, 2021).

The line of cases supporting imposing temporary moratoriums by resolution rely on the fact that a resolution can be used rather than an ordinance to enact a moratorium because moratoriums are not permanent regulations. Yet, in some cases, courts have gone in a different direction.  In Ellington Township, a federal district court reasoned that a moratorium governing utility-scale wind turbine development had to have been enacted as a zoning ordinance amendment following procedures in the Michigan Zoning Enabling Act (e.g., public hearing, publication, etc…) for reasons including that the moratorium was for land use regulations and since it lasted for nearly two years. Tuscola Wind III, LLC v Ellington Twp, No. 17-CV-11025, 2018 WL 1291161 (ED Mich, March 13, 2018). Further, some may argue that resolutions cannot bind the actions of third parties and are designed for internal ministerial functions of a township.

Therefore, to be cautious, it may be appropriate for a township to enact a moratorium by: (1) resolution and police power ordinance (that can occur relatively quickly); and (2) zoning ordinance amendment if related to regulating a land use (following the first two approvals).

4. How long can a moratorium last?

There is no statutory time limit related to how long a moratorium can last. The United States Supreme Court has stated that any moratorium that lasts for more than one year should be viewed with some “special skepticism.” Tahoe-Sierra Pres Council, Inc v Tahoe Regl Planning Agency, 535 US 302, 341–42 (2002). But, the Supreme Court (in the same case) has similarly upheld the validity of a 32-month moratorium preventing, among other things, development near Lake Tahoe in California while a regional planning agency prepared land use regulations. Id.

5. Can a township make exceptions to a moratorium?

Interestingly, courts seem to view “exception” or “waiver” language in moratoriums (e.g., in special circumstances exempting an individual from a moratorium) positively despite the ability of that language possibly causing unfair treatment. The federal district court in Ellington cited above, in part, reasoned that a wind turbine moratorium could not be enacted by resolution because it did not contain “waiver” language similar to what existed in other cases it analyzed. See Tuscola Wind III, LLC v Ellington Twp, 2018 WL 1291161, at *9. Similarly, Michigan courts appear to also view waiver language positively. See Dan & Jan Clark, LLC v Charter Tp of Orion, No. 284238, 2009 WL 1830749, p *5 (Mich Ct App, June 25, 2009).

6. What are the legal risks associated with enacting a moratorium?

The primary legal risk of a township enacting a moratorium is generally litigation (even though townships often prevail in the litigation), especially for longer moratoriums. Because a moratorium in many cases pauses development, permits, or projects, individuals may be (at least temporarily) impacted economically by a moratorium and may attempt to challenge the moratorium in court. Although not intended as an all-encompassing summary, common challenges to moratoriums include: (1) constitutional claims including takings, due process, and equal protection; (2) issues with enactment procedure; and (3) allegations of conflicts with other statutes.

Claims under the United States Constitution and Michigan Constitution make up a significant number of challenges to moratoriums. The first type of challenge individuals might make against a moratorium is a “takings” challenge related to the government not being able to take private property without just compensation. Chelsea, 288 Mich App 239 at 261. For takings challenges, courts will follow a test developed by the United States Supreme Court (Penn Central) that generally analyzes: (1) the character of a moratorium; (2) the economic effect of a moratorium; and (3) the extent of how the moratorium has impacted distinct, investment-backed expectations. Id. For most moratoriums, courts have found them to not be improper takings as they are temporary, will still allow use of lands for other purposes, treat impacted individuals equally, and since persons should expect a local government to require permissions for certain activities.

Other constitutional challenges to moratoriums are often brought under due process theories including substantive due process (requiring government actions to have a rational basis and not deprive citizens of life, liberty, or property) and procedural due process (adequate procedures were followed related to a constitutionally protected interest). Broadly summarizing, individuals often have a difficult time proving they have a constitutionally protected interest to be successful on a due process claim as many permits relate to discretionary decisions (e.g., special land use permits for zoning approvals, among others). Moskovic, 2022 WL 16548948, at *16. For procedural due process claims, courts have found that a municipality enacted a moratorium with sufficient notice even in circumstances where a resolution with the moratorium is not published and simply recorded in meeting minutes required by Michigan law. Id at 18.

Individuals may also try to challenge the effectiveness of a moratorium based on how the township enacted it (resolutions, ordinance, or as a zoning ordinance amendment). Thus, it is likely in a township’s best interest to enact a moratorium using multiple enactment procedures as discussed in Question #3 above.

Finally, unlike the other challenges, townships should be especially careful trying to impose moratoriums on certain issues that may be protected by state or federal statute or that may impact protected classes of individuals. Amber Reineck House v City of Howell, Michigan, No. 20-CV-10203, 2022 WL 17650471 (ED Mich, December 13, 2022). A good illustration of this principle is in the 2022 Amber Reineck House decision by the U.S. District Court of the Eastern District of Michigan. In that case, an individual desired to buy a home to utilize it to provide affordable transitional housing for women with substance abuse disorders and a city generally passed a moratorium trying to address zoning regulations for this use.

However, due to reasons including the purpose of the proposed land use and the people that it would serve, the federal district court did not dismiss a lawsuit against the city and found that it would be appropriate to try claims at trial, including but not limited to: (1) whether the moratorium was enacted with discriminatory intent in violation of the federal Fair Housing Act; (2) whether the moratorium interfered with fair housing rights in violations of the Fair Housing Act and federal Americans with Disabilities Act; (3) whether the moratorium was enacted in violation of the Michigan Persons with Disabilities Civil Rights Act.

Moratoriums, when enacted properly, are authorized under the law even despite the threat of litigation. Yet, townships should proceed with caution when enacting a moratorium that may conflict with a federal or state statute or directly impact those that may be protected classes of individuals.

7. What are best practices to enact a moratorium?

Moratoriums can impact a wide variety of subject matter as illustrated by the cases above. This means that how a township should proceed with enacting a moratorium will vary on a case-by-case basis that analyzes potential legal risk, the goals of a particular township, and other considerations that a township should address with its legal counsel.  At the very least, however, townships should think about (and possibly follow) the below when enacting a moratorium.

  1. Depending on the circumstance, consider enacting it by resolution, police power ordinance, and possibly zoning ordinance amendment to defend against any enactment challenges.
  2. In the document(s) enacting the moratorium, include reasoning for enacting the moratorium and consider including waiver language.
  3. Proceed with extreme caution if a moratorium will impact (even not intentionally) protected classes of individuals or can be challenged under a state or federal statute offering protections for individuals like the Americans with Disabilities Act.
  4. For defensibility of a moratorium, townships should know that courts will more strictly scrutinize moratoriums that last longer than a year.
  5. If the purpose of a moratorium is to enact new regulations related to something an individual is interested in obtaining/developing, and may impact a pending or forthcoming permit application, proceed with caution and seek legal counsel.
  6. Understand that moratoriums are legally recognized tools to help townships adopt regulations to best address various issues. They serve a time and a purpose and can be used even if it may upset certain individuals.
  7. When considering a moratorium, be sure to discuss and enact the moratorium in a transparent manner. To help ease concerns from those that may be impacted by a moratorium, consider explaining the temporary nature of the moratorium and soliciting their input on how to best draft permanent regulations.
  8. When enacting a moratorium for a period of time (e.g., six months for new zoning regulations), consider setting a “game plan” of milestones and goals to ensure your township stays on track to study the issue and to potentially enact new regulations that better serve the community.

Conclusion

I hope the above provided helpful information about how townships can lawfully enact moratoriums to address issues impacting their communities. Do not hesitate to contact me or our office should your township need assistance with enacting a moratorium or with issues related to a moratorium.

– By Kyle O’Meara

This publication is intended for educational purposes only. This communication highlights specific areas of law and is not legal advice. The reader should consult an attorney to determine how the information applies to any specific situation.

Recent Articles & Announcements

  1. First Law Firm to Win Michigan 5...

    FOR IMMEDIATE RELEASE Annual firm growth exceeds 13% within a culture that values both clients and staff. May 16, 2024, Okemos, Michigan. ...

    Read More
  2. My Township Got Sued? Now What?

    Litigation is almost always stressful, costly, and time-consuming. Most townships seek to avoid litigation where possible, but in some insta...

    Read More
  3. What notice requirements apply t...

    There are various statutes that allow townships to fund improvements (e.g., road projects, fire protection services, among others) by specia...

    Read More
Talk to an Attorney
Request a Consultation

At Fahey Schultz Burzych Rhodes PLC, we’ve been helping municipalities, franchised businesses, employers, and more with their legal needs since 2008. We’d love to learn how we can help you, too.