Beyond Insular Zoning: Washington Supreme Court Requires "Regional Welfare" Analysis for Local Land Use Decisions

In a decision which promises to add momentum to a significant recent trend in zoning law, the Washington Supreme Court has invalidated a city's rezoning of farmland because the zoning body failed to consider or attempt to mitigate the adverse environmental and fiscal impacts of the action on the surrounding region. The court's ruling in Save a Valuable Environment v. City of Bothell¹ represents the first explicit application of the "regional welfare" test recently articulated by several state courts² to zoning measures that threaten generalized adverse environmental effects and are not directly related to questions of housing supply.

Considering the importance of the ruling, the court's analysis was relatively brief. Moreover, the decision was at least partially based on a state statutory provision explicitly recognizing every citizen's right to a healthful environment. The opinion's precedential impact can therefore not be assessed with certainty. If followed by courts in other states, however, this broad requirement that localities fully consider and mitigate the adverse regional impacts of all zoning decisions could greatly improve the caliber of local land use decision making across the nation and may also serve as a strong impetus for increased regional land use planning.

Background

In 1973, the owners of a 141-acre farm located within the city limits of Bothell, near Seattle, applied to the city to have the parcel rezoned to permit construction of a major shopping center on the site. The land was zoned for agricultural use; moreover, it was in an area designated as "Greenbelt/Agricultural" under the city's 1971 comprehensive plan. It bordered on an interstate highway and areas of two counties zoned for agricultural and low-density residential use.

The application was intensively considered by both the city planning commission and the city council and was the subject of numerous public hearings. The city also prepared an environmental impact statement on the proposal pursuant to the State Environmental Policy Act.³ In February 1975, the city enacted Ordinance No. 754, which rezoned the farm and supplemented the city's comprehensive plan, subject to execution by the owners of an environmental safeguards agreement.⁴

A group of residents from the area surrounding the rezoned parcel objected to this result and petitioned the state superior court to review the actions of the city in granting the rezoning application. They alleged that the ordinance would have serious adverse effects on the environment and economy of the entire region.These impacts, as portrayed in letters from planning officials from surrounding jurisdictions, included secondary business growth, loss of both agricultural land and rural character, additional highway and sewer construction costing millions of dollars, serious traffic congestion and air pollution, and the danger of increased runoff and flooding from realignment of North Creek.

The trial court found that the rezoning was not arbitrary because it could rationally be seen as benefiting the welfare of the city's inhabitants. The court went on to rule, however, that the measure constituted illegal spot zoning⁵ when viewed in the context of the entire community that would be affected by the shopping center. The superior court therefore invalidated the ordinance, and thecity appealed.

The State Supreme Court Decision

The Washington Supreme Court, in a unanimous opinion written by Justice Horowitz,⁶ declined to follow the trial court's lead in classifying the city's action as spot zoning,⁷ but invalidated the rezoning decision on the broader ground that it failed to serve the welfare of the entire region affected by the proposed shopping center. The court held that it was impermissible for the city to disregard the adverse environmental effects and financial burdens that the rezoning would impose on the region beyond its jurisdictional borders. The zoning body had a duty to serve the welfare of the affected community as a whole, Justice Horowitz stated, and that community includes all surrounding areas that may suffer serious and direct environmental impacts as a result of the proposed zoning action. The court pointed to several recent judicial decisions in other states⁸ that have required [8 ELR 10109] municipalities to consider and serve the regional welfare in making local zoning decisions that affect the housing supply, and concluded that an analogous duty exists when localities are faced with zoning decisions that affect environmental quality in the surrounding region.

Justice Horowitz specifically disclaimed any intent to impose upon a city proposing a rezoning ordinance a mandatory obligation to engage in interjurisdictional planning. He did characterize such coordinated planning as desirable, however, and noted that its use in this case might have saved the ordinance from invalidation. The city had argued that inviting and receiving comment from the surrounding jurisdictions constituted sufficient consideration of their interests, relying on the court's 1962 decision in State ex rel. Pruzan v. Redmain.⁹ The court rejected this contention, finding that Redman concerned less pervasive environmental effects than those threatened around Bothell and overruling that decision to the extent it was not factually distinguishable.

Justice Horowitz emphasized that the city's duty to serve the welfare of the area to be affected by its zoning action included not only the obligation to consider regional environmental effects but also to take "specific measures" to mitigate or avoid those adverse impacts where possible. If the city takes the necessary steps to minimize these harmful effects on surrounding areas, the court advised, its planning for the shopping center would be upheld as responsible and reasonable; if not, the rezoning could not be judicially sustained.¹⁰

One factor that may serve to limit the decision's influence in other states is the court's reliance on the Washington Environmental Policy Act's declaration that every citizen has a "fundamental and inalienable right to a healthful environment."¹¹ The court relied on this provision as the basis for its determination that environmental quality is an integral component of the regional general welfare and is thus a value that the city's zoning actions must serve. Many states, of course, have not granted similar constitutional or statutory rights to their citizens, and other courts might see this aspect of the decision as a ground for distinguishing rather than following it.

The Supreme Court's 1974 decision in Village of Belle Terre v. Boraas¹² supports a strong argument that environmental quality is to be considered part of the general welfare whether or not state law explicitly recognizes it as such, however. Justice Douglas' majority opinion noted the Court's earlier refusal in Berman v. Parker¹³ to limit the concept of the public welfare that may be pursued by zoning regulations. The Court described the general welfare subject to protection under the state and local police power as "broad and inclusive," and encompassing such purely environmental values as spaciousness, clean air, and quiet seclusion.¹⁴

Development of the Regional Welfare Test

A basic statutory and constitutional justification for local zoning ordinances enacted under the delegated police power of the state is promotion of the general welfare.¹⁵ Until recently, zoning authorities could confidently rely on this purpose to validate almost any measure which could reasonably be seen as benefiting the citizens within the borders of their jurisdiction.¹⁶ During the last four years, however, the highest courts of three states have broken with this insular interpretation of the general welfare requirement, at least in the context of municipal ordinances which restrict access to housing. These courts have handed down decisions¹⁷ enunciating the broad principle that zoning determinations by growing municipalities, which by various means limit the local housing supply, must take into account the housing needs of surrounding jurisdictions as well as those of the city itself in order not to be violative of the regional general welfare.

The rationale for this expansion of the traditional locally-focused general welfare justification into a broader municipal duty to consider and serve the "regional welfare" was first suggested by Justice Hall of the New Jersey Supreme Court in his seminal dissent in Vickers v. Gloucester Township.¹⁸ Justice Hall argued that such measures often unfairly exclude persons outside the municipality from access to housing and reinforce patterns of racial and economic segregation. He also pointed to a long-ignored caveat in the United States Supreme Court's opinion in Village of Euclid v. Ambler Realty Co.¹⁹ to support his conclusion that the "general welfare" transcends the artificial limits of political subdivisions and cannot solely embrace local desires. Thirteen years later, in a landmark opinion written by Justice Hall, the New Jersey court fully adopted this regional interpretation of the general welfare justification and ruled, in Southern Burlington County NAACP v. [8 ELR 10110] Mt. Laurel,²⁰ that developing municipalities have a duty not to ignore regional housing needs when enacting zoning measures limiting the housing supply within their borders.

The New Jersey Supreme Court's decision in Mt. Laurel was based on two premises. First, the court recognized that access of the citizenry to adequate housing is one of the prime components of any acceptable notion of the general welfare. Second, the court determined that the general welfare must be considered from a regional rather than an insular perspective. The city's zoning power was delegated to it by the state, the court reasoned, and the city therefore must recognize and respond to the needs of all the state's citizens when exercising that power.

The New York Court of Appeals adopted essentially the same position in Berenson v. Town of New Castle,²¹ stating that a town, in deciding to exclude new multifamily housing, must consider the housing needs of the surrounding region as well as those of the town itself. The court stressed that zoning measures often have a substantial impact beyond the municipality's borders and that the city must take into account the welfare of those persons living in affected neighboring communities.

In 1976, the California Supreme Court joined this "regional welfare" contingent when it rejected, in Associated Home Builders of the Greater Eastbay, Inc. v. City of Livermore,²² a city ordinance establishing a building moratorium until local sewage disposal and water supply facilities complied with certain standards.The ordinance was remanded for a determination whether its exclusionary impacts adversely affected the interests of the surrounding region, and if so, whether the ordinance reasonably considered and accommodated those interests. The court held that a zoning ordinance aimed at controlling municipal growth for environmental reasons, but which served to restrict housing construction, was subject to this same obligation to serve the regional general welfare. The proper test, in this court's view, was whether the ordinance is reasonably related to the welfare of all those whom it significantly affects.

Regional Welfare Analysis Outside the Housing Context

While Livermore mandated a regional welfare analysis in conjunction with a local ordinance based largely on environmental factors, the court still viewed the measure primarily in terms of its restrictive impact on the housing supply and its pronounced exclusionary effect on those in surrounding areas. In Save a Valuable Environment v. City of Bothell,²³ the Washington Supreme Court drew on the broad dicta in Mt. Laurel, Berenson, and Livermore to apply the regional welfare requirement to a rezoning decision that dealt with commercial rather than residential construction and that threatened to "include" the residents of surrounding areas in a rapid development boom rather than exclude them from access to adequate housing. In short, the court in SAVE held that regional welfare analysis is required in conjunction with any local zoning ordinance that will entail "serious" and "direct" environmental effects on the surrounding region.

Justice Horowitz noted that the out-of-state precedents upon which he was relying dealt with zoning measures that restricted the housing supply, but he made little effort to justify applying the requirement for consideration of the regional general welfare outside the housing context. Pointing to the Washington Environmental Policy Act's recognition of every citizen's fundamental right to a healthful environment,²⁴ the court simply concluded that environmental quality, like access to adequate housing, is a component of the general welfare that must be served on a regional basis in enacting local zoning measures that threaten the regional environment.

Justice Horowitz's cursory analysis to some extent weakens this aspect of the SAVE decision. The court did not, for instance, articulate as part of its rationale the realization that environmental problems, like housing markets, are inherently regional in scope and cannot be adequately understood or treated in any analysis limited solely to the four corners of the local zoning body's jurisdiction.

Regional Land Use Planning

In Berenson, the New York Court of Appeals recognized that it was in effect playing the uncomfortable role of a regional planner by analyzing regional general welfare considerations while reviewing the challenged municipal zoning ordinance. The court thus called upon the state legislature to take measures to foster the development of programs designed to achieve sound regional planning by bodies other than the courts.

In SAVE, the Washington Supreme Court expressly declined to set a hard and fast rule that cities proposing zoning actions which will affect neighboring jurisdictions must engage in interjurisdictional planning, implicitly recognizing that to be a legislative rather than a judicial function. The SAVE court did suggest, on the other hand, that the use of coordinated regional planning in connection with the rezoning would likely have made a difference in the result. The court also warned that going no further than simply soliciting comments from neighboring jurisdictions would not suffice. But unlike the California Supreme Court's opinion in Livermore,²⁵ the SAVE opinion does not attempt to dictate the exact standards by which compliance with the duty to serve the regional welfare is to be determined.

Another point not addressed in SAVE is the applicability of the regional welfare duty in the case of a local zoning ordinance that has serious environmental effects on areas across state lines. If the newly-announced municipal duty to serve the regional welfare is based on an implicit responsibility to all citizens of the state [8 ELR 10111] stemming from the state's delegation of zoning power to the locality, then the duty to consider and mitigate extraterritorial environmental effects would seem to stop at the state border. The court indicated, however, that the boundaries of the area a locality must consider are to be determined solely by the scope of the zoning measure's adverse impacts.

An ambiguity is presented by the court's limitation of the regional environmental impacts that must be considered and mitigated to those that are "serious" and "direct." Justice Horowitz gave as one example of such a "direct" impact the pressure to alter established land use patterns. Such economic pressure for secondary development is usually considered an "indirect" effect of construction of a major shopping center. The court's use of this example suggests that the limitations are not to be applied stringently and that the range of regional environmental impacts that must be considered and mitigated will be broadly construed.

Should the Washington Supreme Court's imposition of a municipal duty to analyze and mitigate the regional environmental effects of all local zoning decisions win wider acceptance, it could provide a strong impetus to localities throughout the nation to institute regional planning arrangements or to increase their participation in existing interjurisdictional planning organizations.²⁶ It could also lead to more environmentally-cognizant local land use decisions. The analytic brevity of the SAVE opinion and its failure to provide firm guidance to municipalities as to how to meet such regional obligations suggests, however, that further judicial elaboration, like that provided by the court in Livermore, will be necessary.

Conclusion

The Washington Supreme Court's decision in SAVE is further evidence of the arrival of the recently developed regional general welfare concept in the mainstream of state land use law. The decision also reflects an enlightened judicial recognition of the regional nature of the environmental goals and effects of local zoning ordinances.

While the court's failure to develop fully the conceptual basis and implications of its ruling may somewhat diminish the decision's influence, its interpretation of the basic statutory and constitutional principles which underlie local exercises of the police power seems broadly applicable in other states.

The many questions left unanswered in SAVE indicate that this area of land use law has only begun to develop through judicial interpretation. Unless state legislatures act to fill the void, an extensive process of case law exegesis of this regional welfare test as applied to local zoning actions that have extraterritorial environmental effects lies ahead.

1. __ Wash. 2d __, __ P.2d __, 8 ELR 20379 (Mar. 30, 1978).

2. See Comment, Growth Prohibitions Revisited: California Supreme Court Requires "Regional Welfare" Considerations in Local Zoning, 7 ELR 10064 (1977).

3. WASH. REV. CODE § 43.21C et seq. The original complaint, which challenged the adequacy of the EIS, was dismissed for lack of standing. An amended complaint was filed after the 60-day statute of limitations on SEPA claims had run, so no challenge to the adequacy of the impact statement was before the court. The environmental impact statement itself was included as part of the record before the court, however.

4. Before finally passing the measure, the city council went so far as to submit the proposal to the city electorate as an advisory ballot proposition, in which form it was approved.

5. A zoning ordinance generally constitutes illegal "spot zoning" if it concerns a small area of the locality, permits a use very different from the prevailing use in the surrounding area, and the change to a less restrictive zoning designation was not for the benefit of the community as a whole but merely to provide a special benefit to a specific developer. 1 N. WILLIAMS, AMERICAN LAND PLANNING LAW § 27.01-.05 (1974).

6. __ Wash. 2d __, __ P.2d __, 8 ELR 20379 (Mar. 30, 1978). Before reaching the merits of the zoning issue, the court had to determine that plaintiff, a nonprofit corporation, had standing to seek judicial review of the rezoning ordinance. Adopting the approach used in the federal case law, the court ruled that plaintiff had standing because it had alleged its members would suffer direct and specific harms from the construction of a shopping center near their homes.

7. The court did state, however, that the doctrine of spot zoning is sufficiently flexible to apply in this instance and might constitute an independent ground for invalidating the city's action. Id. at 20380 (dictum).

8. Associated Home Builders of Greater Eastbay, Inc. v. Livermore, 18 Cal. 3d 582, 557 P.2d 473, 135 Cal. Rptr. 41, 7 ELR 20155 (1976); Southern Burlington County NAACP v. Mt. Laurel, 67 N.J. 151, 336 A.2d 713 (1975); Berenson v. Town of New Castle, 38 N.Y.2d 102, 378 N.Y.S.2d 672, 341 N.E.2d 236 (1975).

9. 60 Wash. 2d 521, 374 P.2d 1002 (1962).

10. __ Wash. 2d at __, __ P.2d at __, 8 ELR at 20380-81. As a second ground for invalidating the rezoning ordinance, Justice Horowitz found that the participation in the city's approval of the measure by two city planning commission members who were closely connected with the local chamber of commerce, which had actively supported the rezoning application, violated the required appearance of fairness and impartiality.

11. WASH. REV. CODE. § 43.21C.020(3).

12. 416 U.S. 1, 4 ELR 20302 (1974).

13. 348 U.S. 26 (1954).

14. 416 U.S. at 6, 9, 4 ELR at 20303, 20304.

15. Village of Euclid v. Ambler Realty Co., 272 U.S. 365, 387, 395 (1926) (zoning ordinances must find their justification in the police power asserted for the public welfare). Section 3 of the Standard State Zoning Enabling Act lists "to promote health and the general welfare" as one of the permissible purposes of such measures. Most states have adopted this statutory language. 1 N. WILLIAMS, supra note 5, at 363.

16. 1 N. WILLIAMS, supra note 5, § 13.03 at 286-87; 5 N. WILLIAMS, supra note 5, § 66.05.

17. See cases listed in note 8 supra.

18. 37 N.J. 232, 252, 181 A.2d 129, 140 (1962), appeal dismissed, 371 U.S. 233 (1963).

19. It is not meant by this, however, to exclude the possibility of cases where the general public interest would so far outweigh the interest of the municipality that the municipality would not be allowed to stand in the way.

20. 67 N.J. 151, 336 A.2d 713, appeal dismissed, 423 U.S. 803 (1975).

21. 38 N.Y.2d 102, 378 N.Y.S.2d 672, 341 N.E.2d 236 (1975).

22. 18 Cal. 3d 582, 557 P.2d 473, 135 Cal. Rptr. 41, 7 ELR 20155 (1976). See also Comment, Growth Prohibitions Revisited: California Supreme Court Requires "Regional Welfare" Considerations in Local Zoning, 7 ELR 10064 (1977).

23. __ Wash. 2d __, __ P.2d __, 8 ELR 20379 (Mar. 30, 1978).

24. WASH. REV. CODE. § 43.21C.020(3).

25. See Comment, Growth Prohibitions Revisited: California Supreme Court Requires "Regional Welfare" Considerations in Local Zoning, 7 ELR 10064 (1977).

26. There has been a considerable shift in both planning and land use controls from localities to the state and regional levels within the last 10 to 15 years. See generally, 5 N. WILLIAMS, supra note 5 at §§ 160.01-.30.