By Jones Osborn II

It is not unusual for a city (or county) to grant zoning subject to the dedication of a street right-of-way. For example, a city may approve a rezoning request on the condition that the owner dedicate another twelve feet of right-of-way along the front of his property so that the existing street can be widened by an additional lane. Sometimes the property owner is also required to pave the street or put in sidewalks, curbs and gutters in order to get zoning.

Obviously, if the city wanted to widen the street in the absence of a zoning application, it would have to purchase the street for its fair market value and pay to have it improved. But because the owner wants rezoning, the city may attempt to use its leverage to get the street widened and paved for free.

Is This Legal? Some people say this sounds a lot like extortion. If zoning is appropriate, shouldn't it be granted without requiring dedications or street improvements?

Is this legal? The answer is yes--within limits.

As a general rule, two tests must be met. First, there must be a logical connection between the use allowed by the new zoning and the dedication. Second, the dedication or improvement must be "roughly proportional" to the burden created by the new use. Let's look at these two tests.

Connection. The law says there must be an "essential nexus" (a logical connection) between the new use and the "exaction" (the required dedication or improvement). This means that the dedication must logically eliminate or reduce the problem created by the new use. In one famous Supreme Court case, a city argued that because a new beach house would block the public's view of the ocean, the homeowner could not build unless he dedicated a path from one side of his property to the other along the beachfront. The Court held that this exaction was not legal because the dedication of the pathway along the beach didn't do anything to improve the view of the ocean for those whose view was blocked. It did make it possible for people to walk along the beach, a worthy goal, but it didn't help the problem the government said it was trying to solve. In the words of the Court, there was no "essential nexus" between the problem and the solution. The city was just using its discretionary power to obtain property without paying for it.

In the context of a street dedication, this would mean that if the new zoning didn't do anything to increase traffic, a dedication or street improvement could not be required. An example might be a rezoning from apartments (a high traffic use) to a self-storage warehouse (a very low-traffic use). Since the new use doesn't increase the traffic, the city has no right to require a dedication to widen the street.

Proportionality. The law also requires that there be some "rough proportionality" between the new use and the exaction. For example, the city could not require the dedication and paving of a four-lane highway where there is only a minor increase in the intensity of the use. Most often, this means that the city cannot require a property owner to pave adjacent streets to arterial standards. The additional cost of bringing the street from local up to arterial standards must be paid by the City, because it is cross-town traffic that creates the need for the arterial street, not the local traffic generated by the new use on the property.

This is not an easy test to apply. It is always difficult to know how much new traffic a given use will generate, and how much new roadway will be required to accommodate it. It is not feasible to dedicate 15% of a street, for example, if the new use is expected to cause a 15% increase in traffic. In practice, the city usually requires whatever dedications it believes are necessary to satisfy its plans for the particular street, be it a local, collector, or arterial. However, unless the use is a truly major generator of traffic, paving to local street standards is all that will normally be required. If it can be shown that the new use will produce no appreciable increase in traffic, no dedication or paving may be required; but it is usually up to the landowner to raise the issue. In cases where only a minor increase in traffic is expected, it is sometimes possible to work out an arrangement where the landowner contributes some funds to the city for road construction, but isn't required to pay the full cost of improving the roadway.

Other Applications. The principles described above are not limited to rezonings and street dedications. They also apply to building permits, use permits, and other discretionary approvals allowing for an expanded or different use of real property. In addition, they also apply to exactions other than street dedications and improvements--for example, drainageways, pedestrian and bike paths, green belts, and so on. All exactions must satisfy the same two tests before they can be required as a condition of rezoning or some other type of land use approval.

Practical Considerations. As a practical matter, these protections are difficult to realize. If a developer is ready to proceed with his project, he wants to get his zoning as quickly as possible and start construction. He doesn't want to spend months or years in court challenging the exaction. In addition, many developers do not want to alienate the city planning staff by contesting a street dedication. However, in appropriate cases it may be possible to persuade the staff that what they are asking for is not legal or appropriate and convince them to back off their demands. And it's always possible to take them to court if the case is egregious enough.

Conclusion. There is an extensive body of law, consisting or ordinances, statutes, and state and federal court decisions, outlining the extent to which street dedications, improvements and other exactions may be imposed as a condition of rezoning. The government does not have an open-ended right to require whatever it wants. In general, the exaction must be designed to help cure the problem created by the change in land use, and must be roughly proportional to the problem created. Overreaching exactions can sometimes be adequately addressed by negotiation with city officials; but if not, litigation (or the threat of litigation) is the ultimate remedy.

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In Arizona, the governing statutes are A.R.S. §§ 9-462.01 and 11-810 and -811. A leading court decision is Transamerica Title Ins. Co. v. City of Tucson, 23 Ariz. App. 385, 533 P.2d 693 (1975).

The leading U.S. Supreme Court decisions are Nollan v. California Coastal Comm'n, 483 U.S. 825, 107 S.Ct. 3141, 97 L.Ed.2d 677 (1987); and Dolan v. City of Tigard, 512 U.S. 374, 114 S.Ct. 2309, 129 L.Ed.2d 304 (1994).