Arizona State University

W.P. Carey School of Business

LAND USE AND ZONING

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Overview – Land Use (Ch. 24)
• Land Use – Private Restrictions (CC&Rs)
– On residential property
– On commercial property
• Land Use – Public Restrictions
– Police Power
– Eminent Domain/Constitutional Limitations

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Overview – Zoning (Ch. 25)
• Zoning
– Enabling Legislation
– Nonconforming Use
– Re-zoning
– Variances

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Land Use – Private Restrictions
• Private restrictions (“restrictive covenants”) used
to be the primary method to limit and control land
use
• Still the primary way to control land use in areas
with few or no zoning restrictions (i.e., rural areas,
unincorporated areas)
• CC&Rs – Covenants, Conditions and Restrictions
• Always requires privity of estate – generally means
that all property restricted by the covenant was
owned by the declarant when covenant as
imposed, or that all of the property owners agreed
to the restriction
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Private Restrictions on Residential
Property
• Usually enforced through homeowners
associations (HOAs)
• In Arizona:
– HOAs governed by the Condominium Act (A.R.S.
Section 33-1215) and the Planned Communities Act
(A.R.S. Sections 33-1802 and 33-1807)
• Sometimes multiple sets of CC&Rs on subdivision
in big master-planned communities
• Not enforceable, but frequently appear on property
subdivided before the 1960s: CC&Rs based on
race, color, religion, sex, sexual orientation,
martial status, disability, ancestry, etc.
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Homeowners Associations
• Declarant is the homebuilder or condo developer,
records the CC&Rs before selling the homes
– Once the developer has sold sufficient number of
the homes, the HOA must turn over to the residents
• In Arizona, HOAs have an obligation to enforce the
covenants in the CC&Rs
• Assessment liens: if you not paying HOA due,

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Private Restrictions on Commercial
Property
• Can impose obligations as well as restrictions
• Most common in large retail centers
• Negotiation between a prospective tenant, who
wants to limit nearby competition, and the
developer of the shopping center, who wants as
much flexibility as possible in filling the shopping
center with other tenants
• Example (from University & Ash development):

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Land Use – Public Restrictions
• Police power
– It’s the origin of the ability of the states to regulate
property that they do not own
– Comes from Tenth Amendment of U.S. Constitution
– the rights and powers that have not been given to
the federal government
– Power to establish and enforce laws protecting the
health, safety and general welfare of the public

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Land Use – Public Restrictions
• Eminent domain
– Not a restriction – it’s a total taking of property
– Some semantics: condemnation is the formal
process of exercising the power of eminent domain
– Necessary for important projects (freeway, light rail,
airport expansions), but controversial:
• https://www.youtube.com/watch?v=nIjbCM7u9EY
– Constitutional limits
• “…nor shall private property be taken for public use
without just compensation.”
– Must be for a public use (but Kelo case…)
– Must pay just compensation (fair market value) 9
Zoning – Enabling Legislation
• Power to zone is expressly given to municipality or
county by state statute
• Zoning code has to be consistent with
development plan (maybe even state development
plan, as in Oregon)
• Generally separated among residential (of various
densities), commercial, and industrial
– City of Phoenix General Plan (current):
• https://www.phoenix.gov/pddsite/Documents/
pdd_pz_pdf_00174.pdf
– Original Town Site (1895):
• https://www.phoenix.gov/pddsite/Documents/ 10
pdd_pz_pdf_00325.pdf
Zoning – Enabling Legislation
• Can result in drastically different places:
– Portland (density and urban growth boundaries):
• https://www.juniorleagueofportland.org/wp-content/
uploads/portland-city-oregon-1000x600.jpg
• http://www.oregonmetro.gov/sites/default/files/
UGBCurrent.pdf
– Houston (urban legend – excuse the pun – that it
has no zoning regulations):
• http://farm4.staticflickr.com/
3185/2696279390_10b5788f18_b.jpg

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Zoning – Nonconforming Use
• Nonconforming uses are uses of property that pre-
date and conflict with a later zoning regulation
• NCUs run with the land
• Cannot enlarge or rebuild the NCU – can be a
problem when it comes to financing the property –
if the building burns down can it be restored to its
previous use and productivity?

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Zoning – Re-zoning and Variances
• Re-zoning: zoning not set in stone, re-zoning is
often a condition/contingency to purchase of
property
• Variance: property continues to be zoned a certain
way (e.g., “R-1”) but a certain modest deviation
from the requirements is permitted
• No one has a right to re-zoning or a variance – very
limited recourse in the courts of municipality or
administrative body within it denies you – essentially a
political process

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