New Legislature Ushers in a New Era of Zoning Protection

[This article originally appeared in the New England Real Estate Journal, July 1, 2006.]

In our last article, we discussed the importance of having a site plan application accepted by a Planning Board in New Hampshire. Under the relevant statute, RSA 676:12(VI), before a development site plan is accepted as complete by the Planning Board, it is subject to zoning changes that may kill the project. This sometimes created considerable tension between the developer and the municipality in the infancy of the development process.

That dynamic has now changed. At the end of our article, we mentioned a potential legislative solution in the form of House Bill 1508, which amended RSA 676:12(VI) so that zoning protection would no longer run from the date of acceptance, but from the date of notice for the application. With developers’ fingers crossed around the state, House Bill 1508 was passed on June 15, 2006, by both the Senate and the House of Representatives, and takes effect on August 14, 2006.

Before we examine the practical impact of this new legislation, it is worthwhile to briefly consider the process by which it was approved. Given the significant changes presented by House Bill 1508, one would have expected a contentious and difficult approval process. By all indications, that was not the case; House Bill 1508 passed with few revisions and relatively little fanfare. While cynics may argue that this was solely the result of political pressure applied by the bill’s proponents, another theory is that the bill passed because parties on both sides recognized that change was necessary – a position bolstered by the support that House Bill 1508 received from a number of municipal planners.

The revisions to RSA 676:12(VI) are fairly straightforward. Under the new law, zoning changes do not apply to any site plan (or subdivision) application “which has been the subject of notice by the planning board.” Therefore, once notice has been published for a development project, that project is immune from future changes in the zoning regulations.

The grandfathering protection afforded by the statute also has been expanded to include projects that are engaged in preliminary design review. Therefore, even if a formal site plan or subdivision application has not been submitted, a project may still be entitled to zoning protection if a “formal application” (for site plan or subdivision review) is filed “within 12 months of the end of the design review process.” Although this creates some ambiguity as to exactly when the design review process has “ended” for the purposes of calculating the 12-month period, it further signals the legislature’s intent to protect projects from zoning changes once the review process has begun.

What are the overall impacts of the new legislation? Some may argue that it tips the balance of power too far in favor of developers. We disagree. The new legislation simply levels the playing field, and allows the parties to focus on the technical aspects of presenting a completed application, removing unnecessary tension between the developer and municipality. As a result, the process has been made more fair and predictable for everyone. In the uncertain world of real estate development, these are very positive steps indeed.