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Throughout the last year, appellate courts at the state and federal level have decided several decisions that will have a notable impact on townships and municipalities in general. Given the large number of recent municipal cases, this E-Letter could not cover all recent municipal cases over the past year. The cases addressed in this E-Letter highlight the importance of having permissive zoning ordinances, issues that arise when zoning provisions are challenged, how vested rights are created under a zoning ordinance, the scope of authority townships have in regulating land divisions, and the complex zoning review that occurs when reviewing zoning applications for mining operations. This E-Letter explores those topics in-depth and provides practical takeaways for Townships to consider.

The Michigan Supreme Court Reaffirms Permissive Zoning Ordinances

Many zoned townships in Michigan rely upon zoning ordinances that divide the Township into zoning districts and list uses that are permitted by right and by special use (sometimes referred to as conditional use) within each zoning district. These zoning ordinances do not generate a list of prohibited uses for each district, or generally for the township at-large. Instead, a zoning district only permits the uses that are specifically listed. If there is a use that is not listed, it could not be authorized under the zoning ordinance without a zoning ordinance amendment. These zoning ordinances are called permissive zoning ordinances, meaning they only permit those uses listed within the zoning ordinance. Any non-listed uses are prohibited.

The Michigan Court of Appeals considered this issue in Dezman v Charter Twp of Bloomfield, which analyzed the extent to which backyard chickens and a chicken coop would be permitted under a charter township’s zoning ordinance because the ordinance was silent as to whether that use was permitted. The property at issue was zoned one-family residential; the property owners intended to use their property as a residence and to keep pet chickens. However, the Township, consistent with a permissive zoning ordinance scheme, informed the owners that they were violating the zoning ordinance because the keeping of chickens was not listed as an accessory use to single-family dwellings in this district, and keeping chickens was considered a farm use. As a result, the property was required to meet the definition of a “farm,” which had specific acreage obligations that the property did not satisfy.

The Court of Appeals did analyze precedent providing that when there is a list of permissible uses in a district, the absence of other uses means that non-listed uses are excluded. The court, however, reached an incorrect conclusion. Since it could not find a list of all the activities one could conduct at a single-family dwelling, it concluded that there must be some room for unlisted uses to be permitted. As the court reasons, such unlisted uses would be necessary to conduct activities in and around a dwelling. Thus, the Court of Appeals rejected the Township’s position, and held that the keeping of chickens—although not addressed in the ordinance—was an allowed use on the property.

On appeal to the Michigan Supreme Court, the Supreme Court disagreed with the Court of Appeals, reversing the decision and again upholding the validity of permissive zoning ordinances in Michigan. The Supreme Court clarified that when a township has adopted a permissive zoning ordinance, the correct conclusion is that non-listed uses are prohibited. Notably, the Court further recognized that the Township—like most zoned communities—defines accessory uses and permits accessory uses at single-family dwellings. This includes accessory structures that may be permitted along with a principal structure on a parcel. As the keeping of backyard chickens did not fall within the definition of permitted accessory uses, that use’s absence means it was excluded under the Township zoning ordinance.

This case reminds Townships that an exhaustive list of prohibited uses is not necessary for Townships to prohibit such uses. Instead, as the Michigan Supreme Court recognized, permissive zoning ordinances are lawful. The appropriate way to address those uses that are not within a permissive zoning ordinance is to subsequently amend the zoning ordinance to address the community’s need for such a use and provide reasonable regulations that govern the use. Otherwise, even though the zoning ordinance may be silent, those non-listed uses remain prohibited, and the zoning ordinance remains lawful and consistent with Michigan law.

Never Underestimate Severability Clauses

Similar to permissive zoning ordinances, many clauses within zoning ordinance amendments, and the zoning ordinance itself, are designed to work in conjunction with other articles and sections of the zoning ordinance. A zoning ordinance is unique from other regulatory ordinances. The structure is typically more complex and requires the reader to put any provision being reviewed in context of the entire zoning ordinance. This same analysis occurs when specific provisions of a zoning ordinance are challenged. A court must analyze and determine whether the challenged sections can be severed through a final order so as to leave the remaining zoning ordinance provisions operative for siting and regulating uses and related structures.

The Sixth Circuit recently decided Int’l Outdoor, Inc. v. City of Troy, where International Outdoor sought to put up a billboard, which required a permit from the city. The city denied the billboard application under the city code for failure to meet the ordinance’s height, size, and setback requirements. They then sought a variance, which was also denied as it did not meet the variance conditions. International Outdoor subsequently sued the city alleging that its sign ordinance violated the First Amendment.

As part of the appeal, one of the questions that remained was whether the unconstitutional sign provisions were severable. According to the Sixth Circuit, it determined that Michigan law provides that if unconstitutional language can be removed from an ordinance and it still be operative, then the remaining ordinance may stand. International Outdoor sought to prove that the unconstitutional permit exceptions were integral to the ordinance and could not be severed. However, the Court found that the city explicitly included a severability clause in its ordinance, indicating its intent to sever unconstitutional provisions of its ordinance. Further, the unconstitutional exceptions were not so entangled with the rest of the ordinance that it would become inoperable without them. The unconstitutional provisions were thus severable, and the rest of the ordinance remained in effect.

This is an important reminder that zoning ordinances must be interpreted and applied as a whole; context should not be missed by singling out provisions within the zoning ordinance. Moreover, Townships should consider including severability clauses but would want to do so with limitations that such severability—consistent with Michigan law—only works when any single provision could be removed from the zoning ordinance without the remaining provisions of the zoning ordinance becoming inoperable.

No Vested Property Rights, No Violation

A property right vests when a property owner or applicant becomes entitled to a continued expectancy or property right to operate a use or maintain a structure. A property right can vest when a property owner or applicant has completed the required governmental approvals—plus substantial construction of the lawfully approved development—to continue to operate such development under lawfully valid ordinances and approvals. An example of a vested property right is a nonconforming use or structure, where the right is vested by virtue of the property being legal when it was established or constructed. Vested rights issues can arise, for example, when zoning ordinances are amended, approvals or permits were not valid when issued, or the use or structure is a lawful nonconformity. Because such contentious issues regularly result in litigation, it is important for zoned-communities to be mindful of the principle of vested rights when amending their ordinances, reviewing zoning approvals, and enforcing such ordinances and approvals.

In Moskovic v. City of New Buffalo, the Sixth Circuit confirmed when vested rights apply under a zoning ordinance—specifically addressing whether any rights can be obtained during a moratorium on land use development. In Moskovic, plaintiffs purchased multiple properties with the intent of using them as short-term rentals. The properties were almost entirely located in zoning districts that allowed for single-family detached dwellings. Prior to the issues in question in this case, the city’s zoning ordinance was silent as to short-term rentals specifically, though it did ban all uses that were not specifically authorized. Although the zoning ordinance was silent as to short-term rentals, the city adopted a police power ordinance that provided a permitting process for short-term rentals. However, a short-term rental moratorium was soon enacted.  During the moratorium, the city developed zoning ordinance regulations that prohibited short-term rentals in certain residential districts.

Plaintiffs sued, claiming they had a vested right to use a single-family dwelling as short-term rentals. The district court disagreed, holding that there were no vested property rights. The Sixth Circuit, on appeal, reached the same conclusion. Despite the police power ordinance allowing for short-term rental permits, the court found that a short-term rental is not a permitted use by right under the zoning ordinance, and such a use could only be allowed if otherwise listed. The court was not persuaded that short-term rentals were authorized through language referring to single-family dwellings because that use had a domicile and residential requirement, which by definition cannot include short-term rentals. Accordingly, a short-term rental without a permit was not a permitted use, there was no vested property interest, and the short-term rental could not be considered a nonconforming use because it was prohibited (by virtue of not being listed as a permissible use).

Similarly, it was held that there was no protected property interest in receiving a permit for plaintiffs’ short-term rentals. Although the initially enacted ordinance mandated that a permit be granted if the short-term rental complied with the requirements, plaintiffs did not apply for a permit until after the moratorium had been enacted. There could be no “legitimate claim of entitlement” when they waited until after the moratorium to apply for the permits. Further, there could be no takings claim or MZEA violation as there was no property interest in the short-term rental permit.

This case is an excellent reminder that one cannot vest a property right in a use that is not authorized at the time the zoning ordinance was adopted or amended, or during the time that a moratorium is in place.

The Question of Preemption for Land Division and Boundary Adjustments

Many townships continue to divide land consistent with the Michigan Land Division Act. The Act itself spends most of its focus on subdivision plats, a form of subdividing land that requires specific procedures to be followed as well as multiple governmental agency approvals at the township, county, and state level. A portion of the Land Division Act is devoted to what constitutes a “division.” Divisions of large tracts, boundary-line adjustments, and redivisions of smaller tracts are governed by the Land Division Act.

Because of the lack of detail provided in the Act for dividing tracts of lands, many townships have adopted local ordinances, which is highly recommended. Those ordinances, however, are sometimes challenged if a property owner believes that the township is imposing obligations or restrictions on the land division process that exceeds what the Land Division Act requires. That exact scenario arose again last year.

In Lane v Grattan Township, plaintiffs used a quitclaim deed to change the boundary lines of two parcels. This process is commonly referred to as a boundary-line adjustment. A land division/combination application was subsequently submitted to the township to obtain approval for the adjustment. Upon review of the application, the township required additional materials before completing the review and approval of plaintiffs’ application. Plaintiffs thought the additional material was irrelevant so they did not produce all of the requested materials.

When the township was not able to complete the review process, plaintiffs filed suit claiming that the boundary-adjustment complied with the Land Division Act. The plaintiffs argued that the township’s local ordinance—requiring additional materials that exceeded the requirements in the Land Division Act—was preempted by the Land Division Act and the township must act on the application as filed.

Preemption is a legal doctrine that occurs when a statute directly conflicts with a local regulation or completely occupies the regulatory field. Since townships can only exercise that authority expressly or fairly implied from the Michigan Constitution or statutes, the Michigan Court of Appeals was faced with deciding whether the township’s local ordinance could require approval of boundary adjustments when the LDA did not otherwise require the same. The court found that the language of the local ordinance requiring boundary adjustments to be approved did not conflict with the LDA. The court held that the LDA does not prohibit the type of transfer in question and that the LDA does not call for unrestricted transfers of land. Similarly, Michigan courts have held that a municipality is “given broad regulatory authority and, as such, is permitted to add conditions beyond what is required by statute, so long as the conditions do not contradict the statute.”

Townships who require approval of boundary adjustments can rest assured that such approval requirements are consistent with the Land Division Act. Another helpful tip from this case is that local ordinances controlling land divisions, lot splits, and boundary-adjustments can help provide details and additional process to add clarity to the land division process that may not otherwise be robustly set forth within the Act itself. Thus, it is helpful for any township to have at least a land division ordinance and lot split ordinance to provide a local process and approval standards consistent with the Act.

“Very Serious Consequences” Requirement Must be Taken Very Seriously

For our last case, we consider the Michigan Court of Appeals’ review of a township’s denial of a special use permit for a sand and gravel mining operation. The court’s decision in Northstar Aggregates, LLC v Watson Township, was of interest because it reversed a township’s denial of a special use permit, remanding the case to determine if the local planning commission had relied upon sufficient facts and records to determine that the sand and gravel mine would cause “very serious consequences.”

The “very serious consequences” test comes from special protections afforded to mining operations under the Michigan Zoning Enabling Act, (the “MZEA”), which instructs that a township cannot prevent the extraction of valuable natural resources unless “very serious consequences” would result.

A township’s initial determination of whether a mining operation should be sited is afforded some weight under the MZEA. To challenge a zoning decision pertaining to a mining operation, the MZEA places the burden of proof on the challenger, who must prove that: (1) there are valuable resources located on the site; (2) there is a need for the resources by that person or the market served by that person; and (3) no “very serious consequences” would result from the extraction of these resources. MCL 125.3205(4).

If the proponent of the mining operation makes such a showing, the burden then shifts to the township to prove that the resources were not valuable, not needed, or that “very serious consequences” would result. The issue of whether a resource is “valuable” and whether a mining operation would result in “very serious consequences” are thus critical in determining whether a site is appropriate.

In Northstar Aggregates, plaintiffs sought to operate a sand and gravel mining business on property zoned low-density residential. For the desired SUP, the plaintiffs submitted numerous materials and conducted numerous studies to demonstrate to the township why the permit should be awarded. The township requested answers to many questions, which plaintiffs provided, and the answers were favorable to approval (although the applicant did not answer all questions raised by the township). The requested permit was a topic of discussion at six meetings/hearings of the township planning commission. The application was ultimately unanimously denied after a vote on each factor of the ordinances’ requirements. That decision was appealed to the circuit court on the grounds that it was not supported by competent material, and substantial evidence, and the court upheld the township’s decision.

On appeal, the Court of Appeals first considered the “need” aspect of MCL 125.3205(4), which requires that an individual challenging a zoning decision preventing mining of natural resources must show that there is a need for the natural resources. The Court noted that the fact that there were nearby mines did not inherently demonstrate that those nearby mines had the capacity necessary to fill the need. Further, the township did not use up-to-date evidence to make its decision that there was no need. This lack of adequate information led the Court to determine that the township’s decision was not founded on competent, material, and substantial evidence with regard to the need for natural resources.

The other important aspect of MCL 125.3205(4) requires that the plaintiffs show that there will not be very serious consequences stemming from the operation. The Court held that the lower court’s consideration of “no very serious consequences” was inadequate as it mostly considered the impact on property values and relied on out-of-date reports. The Court decided not to take a position on the issue, but noted that there must at least be some consideration of whether one consequence can be considered “very serious consequences.”

This case showcases the special protections afforded to mining operations under the Michigan Zoning Enabling Act, and the analysis that townships should conduct when reviewing such applications.

Conclusion

It is important to have robust and well-defined ordinance provisions, understanding that for many townships, those uses not listed are prohibited. A clear and comprehensive ordinance will provide the Township’s first line of defense against any claims of ambiguity, as well as help local property owners and township zoning bodies apply the provisions of the zoning ordinance. Note that the interaction between state law and local law can be complex, such as in regulating land divisions or reviewing mining zoning requests; however, the Michigan courts continue to offer guidance. It is important to stay up to date on recent developments in Michigan law and consider how those changes may impact the local law in your municipality.

By Christopher S. Patterson

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.