Village of Valatie v. Smith

OPINION OF THE COURT

This appeal challenges the facial validity of chapter 85 of the Village Code of the Village of Valatie, a local law that terminates the nonconforming use of a mobile home upon the transfer of ownership of either the mobile home or the land upon which it sits. Defendant argues that it is unconstitutional for the Village to use a change in ownership as the termination date for a nonconforming use. We conclude, however, that defendant has failed to carry her burden of showing that the local law is unreasonable on its face. Accordingly, we modify the order of the Appellate Division by denying defendant’s cross motion for summary judgment.

In 1968, the Village enacted chapter 85 to prohibit the placement of mobile homes outside mobile home parks. Under the law, any existing mobile home located outside a park which met certain health standards was allowed to remain as a nonconforming use until either ownership of the land or ownership of the mobile home changed. According to the

The policy of allowing nonconforming uses to continue originated in concerns that the application of land use regulations to uses existing prior to the regulations’ enactment might be construed as confiscatory and unconstitutional (4 Rathkopf, Zoning and Planning § 51.01 [2] [b], at 51-6 [Ziegler 4th ed]). While it was initially assumed that nonconforming uses would disappear with time, just the opposite proved to be true in many instances, with the nonconforming use thriving in the absence of any new lawful competition (Matter of Harbison v City of Buffalo, 4 NY2d 553 , 560, supra). In light of the problems presented by continuing nonconforming uses, this Court has characterized the law’s allowance of such uses as a "grudging tolerance”, and we have recognized the right of municipalities to take reasonable measures to eliminate them (see, Matter of Pelham Esplanade v Board of Trustees, 77 NY2d 66 , 71, supra).

Most often, elimination has been effected by establishing amortization periods, at the conclusion of which the nonconforming use must end. As commentators have noted, the term "amortization period” is somewhat misleading (see, e.g., 4 Rathkopf, Zoning and Planning § 51B.05 [1], at 51B-44, n 3 [Ziegler 4th ed]). "Amortization” properly refers to a liquidation, but in this context the owner is not required to take any particular financial step. "Amortization period” simply designates a period of time granted to owners of nonconforming uses during which they may phase out their operations as they see fit and make other arrangements (id.; see also, Art Neon Co. v City & County of Denver, 488 F2d 118 , 121 [5th Cir], cert denied 417 US 932 ). It is, in effect, a grace period, putting owners on fair notice of the law and giving them a fair opportunity to recoup their investment (Modjeska Sign Studios v Berle, 43 NY2d 468 , 479, supra; Art Neon Co. v City & County of Denver, supra, at 121 ). Though the amortization period is typically discussed in terms of protecting the owners’ financial interests, it serves more generally to protect "an individual’s interest in maintaining the present use” of the property (Modjeska Sign Studios v Berle, supra, at 479 ).

The validity of an amortization period depends on its reasonableness (Matter of Harbison v City of Buffalo, 4 NY2d 553 , 562-563, supra). We have avoided any fixed formula for deter

Defendant here does not challenge the local law’s constitutionality under our established balancing test for amortization periods — i.e., whether the individual loss outweighs the public benefit. Instead, the challenge is a more basic due process claim: that the means of eliminating nonconforming uses is not reasonably related to the Village’s legitimate interest in land use planning. More particularly, defendant makes two arguments: first, that the length of an amortization period must be related either to land use objectives or to the financial recoupment needs of the owner and, second, that the local law violates the principle that zoning is to regulate land use rather than ownership (see, Matter of Dexter v Town Bd., 36 NY2d 102 ). Neither argument withstands analysis.

We have never required that the length of the amortization period be based on a municipality’s land use objectives. To the contrary, the periods are routinely calculated to protect the rights of individual owners at the temporary expense of public land use objectives. Typically, the period of time allowed has been measured for reasonableness by considering whether the owners had adequate time to recoup their investment in the use (see, e.g., Modjeska Sign Studios v Berle, 43 NY2d 468 , 474, supra; accord, Matter of Town of Islip v Caviglia, 73 NY2d 544 , 561, supra). Patently, such protection of an individual’s interest is unrelated to land use objectives.

It is significant that the six properties involved here are residential. In our previous cases dealing with amortization, we have focused almost exclusively on commercial properties, where the owner’s interest is easily reduced to financial considerations. The same may not be true for the owners of residential properties, especially in instances where the property is the primary residence of the owner. Simply being able to recoup one’s financial investment may be a secondary concern to staying in a neighborhood or remaining on a particular piece of land. Indeed, when mobile homes are involved, there may actually be little or no financial loss, given that the owner often will be able to relocate the structure and sell the land for legal development. Here, rather than focusing solely on financial recoupment, the Village apparently took a broader view of "an individual’s interest in maintaining the present use” of the property (see, Modjeska Sign Studios v Berle, 43 NY2d 468 , 479, supra; see also, Matter of Taksen Liq. Store v Bonisteel, 103 Misc 2d 34 ). It enacted a law that allowed owners to keep their mobile homes in place until they decided to sell, even though they may have recouped their investment long ago. By doing so, it saved the owners from a forced relocation at the end of a predetermined amortization period set by the Village. Defendant has not demonstrated why such an approach is irrational or explained why a municipality should be barred constitutionally from considering the nonfinancial interests of the owners in setting an amortization schedule. Thus, on this motion for summary judgment and the present record, defendant has failed to overcome the presumption of the law’s validity and prove, as she must, unconstitutionality beyond a reasonable doubt (McMinn v Town of Oyster Bay, 66 NY2d 544 , 548; Northern Westchester Professional Park Assocs. v Town of Bedford, 60 NY2d 492 , 500).

Equally unavailing on this facial challenge is defendant’s contention that the law might prevent some owners from

In fact, what defendant is actually arguing is that the Village should not be allowed to infringe on an owner’s ability to transfer the right to continue a nonconforming use (see, O’Connor v City of Moscow, 69 Idaho 37 , 202 P2d 401 ). It is true that, in the absence of amortization legislation, the right to continue a nonconforming use runs with the land (Matter of Bexson v Board of Zoning & Appeals, 28 AD2d 848 , affd 21 NY2d 961 ; Matter of Iazzetti v Village of Tuxedo Park, 145 Misc 2d 78 ; see also, 4 Rathkopf, Zoning and Planning § 51.03 [1], at 51-42 [Ziegler 4th ed]). However, once a valid amortization scheme is enacted, the right ends at the termination of the amortization period. As a practical matter, that means the owner of record during the amortization period will enjoy a right that cannot be transferred to a subsequent owner once the period passes. In such circumstances, the law is not rendered invalid because the original owner no longer has a right to transfer or because the original owner and subsequent owners have received disparate treatment under the land use regulations.

Here, of course, the absence of the right at the time of transfer is not left to the happenstance of when the owner decides to sell but is an explicit part of the legislative plan. But that difference does not change the test for the validity of an amortization period. The test remains whether the period unreasonably inflicts a substantial loss on the owner or fails to comport to the reasonableness required by due process. Put simply, there is no independent requirement that the right to continue the nonconforming use be available for transfer at a given time. That is true whether the right to continue the nonconforming use is terminated by the passage of time, destruction of the use, abandonment or, as here, transfer of ownership. Thus, the mere fact that the right cannot be transferred or that later owners are treated disparately from the original owner is insufficient to sustain defendant’s facial challenge to the ordinance.

Nor can we subscribe to the Appellate Division’s theory that the amortization period here is unreasonable because it may be too long. In the Appellate Division’s view, an open-ended amortization schedule does not reasonably advance land use objectives. The Appellate Division noted that if a corporation

Of greater concern to us, the Appellate Division’s rationale would seriously undermine the law of nonconforming uses. Amortization periods are the exceptions; in the absence of such schemes, owners of nonconforming uses are free to continue the uses indefinitely and transfer them to successor owners. Were the Appellate Division’s rationale accepted, amortization periods would be required to avoid the problem of indefinite continuation of nonconforming uses. Amortization periods have never been mandatory as a matter of constitutional law, and consequently we must reject the Appellate Division’s reasoning.

Thus, we conclude that defendant has failed to prevail on her facial challenge to the Village law. As to the remaining issues raised, further factual development is necessary.

Accordingly, the order of the Appellate Division should be modified, without costs, by denying defendant’s cross motion for summary judgment and, as so modified, affirmed.

Chief Judge Kaye and Judges Bellacosa, Smith, Levine and Ciparick concur; Judge Titone taking no part.

Order modified, without costs, by denying defendant’s cross motion for summary judgment and, as so modified, affirmed.