In a recently published opinion, the Commonwealth Court of Pennsylvania in Chaffier v. Hellertown Borough Zoning Hearing Board, Pa. Commw. Unpub. LEXIS 30 (Jan. 10, 2024) struck down an attempted change in a property’s zoning classification as illegal spot zoning.

In late 2019, the property owner in Chaffier applied to the local government in Hellertown Borough to change the zoning classification of the property at issue from R-1 to R-2, the opinion said.

Subsequently, in early 2020, the Hellertown Borough Council adopted a zoning ordinance changing the property’s zoning classification to R-2, the opinion said.

After obtaining the desired zoning classification for the property, the property owner requested an advisory opinion from zoning officer for Hellertown Borough as to whether the zoning classification of R-2 permitted single-family attached homes (townhomes) to be constructed on the property, the opinion said.

The zoning officer thereafter responded that townhomes would be so permitted on the property, the opinion said.

Under the zoning classification of R-1, a property owner in Hellertown Borough would only be permitted to use the property for single-family detached homes and duplexes.

Several neighboring property owners in Chaffier, all of whom owned properties with a zoning classification of R-1, filed a zoning appeal with the Hellertown Borough Zoning Hearing Board challenging the substantive validity of the zoning ordinance which changed the property’s zoning classification from R-1 to R-2, alleging that the rezoning constituted illegal spot zoning, the
opinion said.

Following a number of public hearings, the Hellertown Borough Zoning Hearing Board made several findings regarding the property and the zoning classifications at issue.

Before the adoption of the ordinance which changed the property’s zoning classification, the Hellertown Borough Zoning Hearing Board noted that Easton Road served as a boundary between properties which had a zoning classification of R-1 and R-2, with all properties with a zoning classification of R-2 being situated on the west side of Easton Road, the opinion said.

According to the Hellertown Borough Zoning Hearing Board, however, the ordinance erased this preexisting boundary line, creating a R-2 zone on the east side of Easton Road that “juts out” into the R-1 zone.

The Hellertown Borough Zoning Hearing Board also found that the property has no physical characteristics or conditions that distinguish it from the surrounding properties that were not subject to the ordinance, the opinion said.

The neighboring property owners in Chaffier presented testimony that the property, with its previous zoning classification of R-1, could accommodate 18 single-family detached homes or 26 duplexes, and that both types of homes would be marketable to potential buyers, the opinion said.

A realtor who testified on behalf of the neighboring property owners in Chaffier stated that developing single-family detached homes or duplexes on the property would increase Hellertown Borough’s tax base, but that building townhomes on the property would result in an even larger tax base increase, the opinion said.

The neighboring property owners in Chaffier summarized their position as desiring to maintain the single-family character and “ideal setting” of the area, and they argued that the ordinance did not benefit Hellertown Borough as a whole, but rather benefited only the property owner who obtained the change in the property’s zoning classification, the opinion said.

The Hellertown Borough Zoning Hearing Board also reviewed plans from local and regional planning bodies, both of which denoted the property as being in an area indicated for low-intensity residential use, the opinion said.

In response, Hellertown Borough presented testimony and evidence in favor of the adoption of the ordinance.

The zoning officer in Chaffier testified that aside from the 2 homes located on it, the property was one of the few remaining undeveloped parcels within Hellertown Borough, the opinion said.

The zoning officer also testified that he believed the ordinance was in accordance with the surrounding property uses because there are townhome and apartment developments just across Easton Road, the opinion said.

Additionally, the zoning officer added that, since 2015, Hellertown Borough has received numerous proposals from real estate developers eager to build apartments and/or townhomes throughout it, the opinion said.

The engineer for Hellertown Borough also presented testimony to the Hellertown Borough Zoning Hearing Board, in which he stated that there were no other properties of the same size in Hellertown Borough that could be developed for residential purposes, the opinion said.

The engineer added that there was demand for townhomes in Hellertown Borough and that such development at the property would be consistent with other nearby land uses, the opinion said.

Reviewing the evidence and relying on Pollock v. Zoning Board of Adjustment, 342 A.2d 815 (Pa. Commw. Ct. 1975), the Hellertown Borough Zoning Hearing Board recalled that there is “no hard and fast test” to determine where an illegal spot zone exists and that each case must be heard and judged by its “own particularities”.

The Hellertown Borough Zoning Hearing Board applied Pennsylvania’s two-part test set forth in Lower Allen Citizens Action Group, Inc. v. Lower Allen Township Zoning Hearing Board, 500 A.2d 1253 (Pa. Commw. Ct. 1985).

The first prong of the test looks at whether the ordinance treats the property differently from surrounding properties with similar characteristics, while the second prong asks if the property is treated differently and whether such differential treatment is “justified on health, safety, moral, and public welfare grounds.”

Applying the first prong of the test, the Hellertown Borough Zoning Hearing Board found that, while townhome development may have been more lucrative to the property and Hellertown Borough, the property was perfectly suitable for development in accordance with a zoning classification of R-1.

Applying second prong of the test, the Hellertown Borough Zoning Hearing Board found that the mere fact that developers had proposed more intensive residential development did not in and of itself indicate a need for that type of development in Hellertown Borough. In doing so, the Hellertown Borough Zoning Hearing Board rejected Hellertown Borough’s arguments regarding increased potential for tax revenue as justifying the adoption of the ordinance.

After examining all the testimony and evidence, the Hellertown Borough Zoning Hearing Board concluded that the ordinance constituted illegal spot zoning.

The property owner in Chaffier appealed the Hellertown Borough Zoning Hearing Board’s ruling to the Northampton County Court of Common Pleas which upheld it.

The trial court in Chaffier observed that, at the outset, that it must presume the ordinance is constitutionally valid unless a challenger can show that it is unreasonable, arbitrary, or not substantially related to the police power, a substantial burden to overcome.

As to the first prong of the test, the trial court found that the ordinance did treat the property differently from surrounding properties.

The trial court pointed out that mere fact that a property is larger than those around it does not, on its own, signify that it is distinguishable.

The trial court also rejected the other arguments the property owner put forth. Notably, that its frontage on Easton Road, unlike the neighboring properties, made it distinguishable, and, further, that its location along Easton Road, a “border zone” between the R-1 and R-2 zones, made it distinguishable.

The trial court also rejected the property owner’s argument that the property, as rezoned, created a peninsula, not an island.

The trial court then moved on to the second prong of the test to determine whether the differential treatment was justified.

The trial court believed that the ordinance was not justified based on its alleged consistency with county comprehensive plan because there was no evidence that the Hellertown Borough Council considered the county comprehensive plan when it adopted the ordinance. The trial court also noted the lack of evidence regarding the supposed increase in tax revenue if the property was developed with townhomes. Regardless, the trial court cautioned that increased tax revenue alone cannot justify spot zoning.

The property owner then appealed the trial court’s ruling to the Commonwealth Court. The Commonwealth Court in Chaffier upheld the trial court’s ruling and held that the ordinance to be an illegal spot zone.

As to the first prong of the test, the Commonwealth Court found no error in the Hellertown Borough Zoning Hearing Board’s finding that the property is not distinguishable from surrounding uses.

The Commonwealth Court observed that a peninsula of rezoned property, not only an island, may constitute spot zoning, emphasizing that the distinction between and “peninsula” and an “island” comes down to semantics.

Turning to the second prong of the test, the Commonwealth Court also found no error in the Hellertown Borough Zoning Hearing Board’s determination that the ordinance was not rationally related to Hellertown Borough’s police power.

The Commonwealth Court reasoned that the ordinance was less about benefitting to Hellertown Borough through development and increased tax revenue and more about increasing the value of the property to the property owner.

Lastly, the Commonwealth Court found that the property owner’s arguments regarding the tax benefits to the Borough were too speculative to rely upon.

Ultimately, this ruling highlights the reality that even a seemingly rational rezoning or development proposal, such as the property owner’s desire in Chaffier to build townhomes in Hellertown Borough, may fall afoul of Pennsylvania jurisprudence regarding illegal spot zones. To avoid a substantive validity challenge, a party seeking a change in a property’s zoning classification should take care to develop the factual record to demonstrate that the subject property is distinguishable from those around it and/or that the change is a justified use of the local government’s police power.

Alan Nochumson is the principal of Nochumson P.C., a legal services firm with a focus on real estate, land use & zoning, litigation, and business counseling for the people of Pennsylvania and New Jersey. Alan is a frequent author and lecturer on issues commonly confronting businesses, individuals, and professionals. You can reach him at 215-600-2851 or alan.nochumson@nochumson.com.

Alex Hamilton is an associate attorney at the firm. You can reach him at 215-399-1346 or alex.hamilton@nochumson.co

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The City of Philadelphia recently created an online portal that has streamlined the process of renewing or updating your license, keeping your property in good repair, finding financial and housing programs, and avoiding costly eviction processes, amongst other functions. The portal, called the Landlord Gateway Program, allows current and prospective landlords to forgo the often-long lines at the Municipal Services Building and, instead, provides centralized access to the resources needed to navigate the City’s processes and requirements in a single location.

The Landlord Gateway Program is divided into sections for new landlords, existing landlords, affordable housing, and includes a hub for resources useful to all landlords and property managers. Under this program, landlords in Philadelphia can learn how to obtain rental licenses and legally lease their properties, and maintain their existing governmental licenses. The program also provides guidance for landlords and prospective landlords who wish to own as well as manage affordable housing in the City of Philadelphia via the Housing Choice Voucher Program, and offers information on unique funding opportunities for Affordable Rental & Special-Needs Housing Developments.

In addition, the program includes directions to accessing the Eviction Diversion Program, which provides resources for landlords to resolve issues and avoid a costly or lengthy court process. The Landlord Gateway Program includes, amongst others functions, a streamlined conflict mediation process. At no cost to the individual, a neutral mediator can help landlords and tenants resolve issues and financial assistance for eligible landlords to cover a tenant’s back rent.

The Landlord Gateway Program also includes all the housing-related services and resources from 16 of the City’s departments and agencies so that landlords have help managing their rental properties. The Gateway is divided into sections for new landlords, existing landlords, affordable housing, and includes a hub for resources useful to all landlords. Additional resources can be found for the following City entities:

• The Division of Housing and Community Development
• The Office of Homeless Services
• The Pennsylvania Housing Finance Agency
• Philadelphia Gas Works
• The U.S. Department of Housing and Urban Development

This “one-stop-shop” is free and available online at the City of Philadelphia’s website, listed under the “Programs” tab. Please feel free to contact Alan Nochumson at either (215) 600-2851 or alan.nochumson@nochumson.com if you need assistance using the program or wish to learn more.

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Modifying governmental rules and regulations under the Philadelphia Zoning Code for properties in Philadelphia is a time-intensive process. Typically, several months elapse from the initiation of an idea by a member of Philadelphia City Council to its passage into law. This prolonged timeline usually includes recommendations from the City Planning Commission about the proposed modification to the Philadelphia Zoning Code as well as hearings to gather input from the public regarding it.

As a result, the City of Philadelphia’s Department of Licenses and Inspections often finds itself grappling with decisions regarding zoning and land use applications received during the period when an ordinance is still “pending” but has not yet been signed into law.

In Pennsylvania, under the “pending ordinance doctrine,” an applicant may be required to adhere to proposed modification to the Philadelphia Zoning Code even before it has been formally adopted into law.

One important piece of legislation which may pull the pending ordinance doctrine into play is the proposed property development in Brewerytown-Sharswood Overlay Subarea, which has been read and passed by Philadelphia City Council, but not yet enacted into law. The bill establishes limitations on building heights on residentially zoned land and prohibits roof decks. The overlay specifies that the maximum height allowed must match the tallest building on an adjacent lot, with a limit of 35 feet or a height corresponding to the majority of existing buildings within the block if no adjacent building exists.

Ordinances such as the proposed property development in Brewerytown-Sharswood Overlay Subarea should put real estate developers and investors on notice to learn of any pending ordinances that may impact their ability to develop real estate in Philadelphia before purchasing it.

Please feel free to contact Alan Nochumson at either (215) 600-2851 or alan.nochumson@nochumson.com if you wish to learn if a property in Philadelphia is subject to a pending ordinance.

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In a recent decision, the Pennsylvania Commonwealth Court in City of Philadelphia v. A Kensington Joint, cautioned that local governments in Pennsylvania desiring to demolish an allegedly unsafe building structure may need to rely on more than just an inspection of the exterior of the building structure before having it demolished by way of court order.

In a recent decision, the Pennsylvania Commonwealth Court in City of Philadelphia v. A Kensington Joint, 2023 Pa. Commw. LEXIS 128 (Pa. Commw. Ct. 2023), cautioned that local governments in Pennsylvania desiring to demolish an allegedly unsafe building structure may need to rely on more than just an inspection of the exterior of the building structure before having it demolished by way of court order.

The property at issue in A Kensington Joint is located in the Kensington section of Philadelphia.

A Kensington Joint, LLC, which is owned by Adam Ehrlich, owns a property with a three-story building structure situated on it, the opinion said.

In the summer of 2023, the city of Philadelphia filed a complaint in the Philadelphia County Common Pleas Court against the property owner, together with an emergency petition seeking the demolition of that building structure, the opinion said.

In the complaint, the city alleged that there were uncured, unappealed violations of the Philadelphia Code pertaining to the property and its building structure and, due to the alleged unsafe condition of the property, the city sought court authorization to demolish it, the opinion said.

The trial court then held a hearing on the petition.

At the hearing, the city offered the testimony of representatives of Department of Licenses and Inspections (L&I) who discussed the property’s then current condition.

One of the representatives of L&I, Thomas Rybakowski, a construction compliance supervisor for L&I, testified that he inspected the property and that L&I declared its building structure unsafe, the opinion said.

During his testimony, Rybakowski noted that the building structure had a vertical fracture along the side wall, that the front wall at the corner bulged out toward the walkway, that there was bulging and deterioration of the exterior walls and foundational elements, and that there was fire damage to the interior joists of part of the building and, since he did not know how extensive the fire damage was on the remainder of the building structure, he feared that the building structure might collapse.

Notably, Rybakowski, at the hearing, conceded that a structural engineer was necessary to confirm that the defects with the building structure would lead to a collapse and that he was not one, the opinion said.

Moreover, according to the opinion, he clarified that there was no inspection of the interior of the building structure as of the date of the hearing had taken place.

Afterwards, the city presented the testimony of Tameka Blair, a code enforcement inspector at L&I, at the hearing in support of its petition, the opinion said.

During the hearing, Blair stated representatives at L&I did not inspect the interior of the building structure because they deemed it unsafe at the time.

The trial court found the city’s witnesses credible and emphasized the building structure’s structural deterioration, as recounted by representatives of L&I.

Furthermore, the trial court agreed that the city could not perform an inspection of the interior of the building structure due to these unsafe conditions.

Consequently, the trial court not only ordered that the property owner allow representatives of L&I to enter the building structure to conduct an inspection of the interior of the building structure, but also authorized the city to abate the governmental violations plaguing the property, including through the demolition of its building structure without further inspection.

Thereafter, the property owner, among others, appealed the trial court’s ruling to the Commonwealth Court.

At the same time, the property owner also filed a motion with the trial court requesting a stay of the trial court order pending the appeal. The trial court denied that motion.

The property owner then immediately filed an emergency application with the Commonwealth Court, seeking a stay of the trial court order that allowed for the demolition of the building structure without further inspection.

The Commonwealth Court granted a temporary stay of the trial court order pending oral argument before the Commonwealth Court.

After oral argument occurred, the Commonwealth Court granted the emergency application and directed an expedited consideration of the remedies levied by way of the trial court order.

The property owner argued that, under King v. Township of Leacock, 552 A.2d 741 (Pa. Commw. Ct. 1989), the trial court should have applied strict scrutiny to the remedy of demolition and, in doing so, the Commonwealth Court should only uphold the trial court order if, by substantial evidence, demolition is necessary to protect public health, welfare, and safety.

In making this argument, the property owner reasoned that the trial court erred by not considering other less drastic remedies and by ordering demolition without an inspection of the interior of the building structure and without reliance of a structural engineer or other professional’s expert report.

In response to that argument, the city emphasized that, by failing to appeal the governmental violations of public record against the property, the property owner conceded that the building structure was unsafe and unfit considering the nature of these governmental violations.

The city also posited via citations to numerous decisions rendered by the Commonwealth Court that a code enforcement official’s testimony can provide substantial evidence to support a demolition order and a structural engineer’s testimony is not required under the circumstances.

In the opinion penned by Judge Christine Fizzano Cannon, the Commonwealth Court first highlighted the steps required to uphold a demolition order—the proponent of demolition must first amass the evidence necessary to support that remedy and the trial court orders preliminary relief where necessary, and then only after the trial court reviews the evidence and finds it sufficient, it issues a separate demolition order.

Citing to King, the Commonwealth Court noted that the local government must support its findings with substantial evidence to justify a demolition order.

After performing a thorough review of the record to determine whether the trial court order was legally justified, the Commonwealth Court in A Kensington Joint concluded that trial court order of demolition was issued in error due to the lack of substantial evidence presented by the city in the petition and at the resulting hearing.

The Commonwealth Court in A Kensington Joint pointed out that the city relied upon Rybakowski’s testimony alone for its findings of structural instability of the building structure and that he even admitted at the hearing that a structural engineering analysis was necessary to understand the building’s structural condition.

Furthermore, the Commonwealth Court in A Kensington Joint acknowledged that the city did not offer Rybakowski as an expert witness despite references to his so-called expertise during the hearing.

In other words, the Commonwealth Court in A Kensington Joint determined that his conclusions about the condition of the building structure were conclusory and speculative.

The Commonwealth Court in A Kensington Joint also addressed the city’s argument that it did not perform an inspection of the interior of the building structure because of its dangerous conditions.

The Commonwealth Court explained that it could not lessen or excuse the city’s burden of proof for demolition and to find otherwise would empower the city to secure a demolition order for any property it viewed from the outside as structurally unsafe without substantial evidence.

The Commonwealth Court ultimately attacked the incongruency between the remedies prescribed by the trial court order.

Although the trial court in A Kensington Joint authorized the city to enter the property to inspect it, it also permitted the city to abate the governmental violations through demolition.

The Commonwealth Court in A Kensington Joint emphasized that the results of an inspection of the interior of the building structure was necessary to determine whether the governmental violations were abatable or whether demolition of the building structure was necessary, concluded that authorizing demolition of the building structure without first evaluating the results of an inspection of the interior of the building structure was erroneous.

—Dylan Beltrami, a third-year law student at the Drexel University Thomas R. Kline School of Law, who is interning at the firm, assisted in the preparation of this article.

Alan Nochumson is the principal of Nochumson P.C., a legal services firm with a focus on real estate, land use & zoning, litigation, and business counseling for the people of Pennsylvania and New Jersey. Alan is a frequent author and lecturer on issues commonly confronting businesses, individuals, and professionals. You can reach him at 215-600-2851 or alan.nochumson@nochumson.com.

Alex Hamilton is an associate attorney at the firm. You can reach him at 215-399-1346 or alex.hamilton@nochumson.com.

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If you obtained a building permit this year for your property renovation project in Philadelphia, you must apply for the associated real estate tax abatement by December 31, 2023 or forever risk your right to do so in the future.

As a reminder, Ordinance 961, as amended, offers a real estate tax abatement for 10 years due to improvements made to residential properties with existing building structures that will either be sold upon completion of the property renovations or occupied by the property owner after the property renovations occur.

The significance of this tax abatement program lies not only in its duration but also in its role as a catalyst for encouraging property owners to invest in the enhancement of their residential properties. Whether it’s a comprehensive renovation, the addition of new structures, or other qualifying improvements, the program aims to stimulate real estate development and elevate the overall quality of housing in the city.

For those seeking more comprehensive information on the various real estate tax abatement programs available in Philadelphia, a detailed guide is accessible at click here. This resource provides valuable insights into the eligibility criteria, application process, and potential benefits associated with each program.

Please feel free to contact Alan Nochumson at either (215) 600-2851 or alan.nochumson@nochumson.com if you wish to learn if a property in Philadelphia is subject to a pending ordinance.

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In a recently published opinion, the Pennsylvania Commonwealth Court in Burd v. Borough of Brentwood Zoning Hearing Board, 2023 Pa. Commw. LEXIS 92 (April. 18, 2023) rejected an appeal brought by neighboring property owners alleging that a local ordinance constituted impermissible spot zoning. In its analysis, the Commonwealth Court emphasized the heavy burden a challenger must meet to overcome the presumptive validity of a zoning ordinance.

The property at issue in Burd is located in the borough of Brentwood, Pennsylvania, the opinion said.

In late 2020, the borough enacted an ordinance, changing the zoning classification of the property from low-density residential (R-1) to mixed residential and neighborhood commercial (MUN).

The borough passed the zoning ordinance at the request of Agile Development which, on immediately adjacent lots, operated a funeral home and an event planning center, the opinion said.

At the time of change of the zoning classification, the property contained a single-family home, the opinion said.

According to the opinion, Agile Development requested the change in the zoning of that property to allow it to create additional parking spaces for its funeral home business.

In Burd, the Commonwealth Court explained that the rezoned property is 6,225 square feet in area and is bordered on two sides by property zoned R-1, the remaining boundaries of the rezoning property abut land zoned MUN, and the immediate vicinity of the rezoned property also includes land zoned as a commercial redevelopment district (CRD) that allows for more intensive, regional attraction uses, including a Giant Eagle supermarket and a McDonald’s.

After enactment of the zoning ordinance, neighboring residents living in the R-1 residential areas adjacent to the property filed a notice of substantive validity challenge to the zoning ordinance.

The borough’s zoning hearing board thereafter held hearings about the notice of substantive validity challenge.

At the hearing, the neighboring residents argued that the change to the zoning classification of the property constituted illegal spot zoning because it created a “peninsula” of MUN use jutting into an area zoned for R-1 use without justification, the opinion said.

The borough’s zoning hearing board, in a 3-2 decision, rejected the neighboring residents’ challenge, finding that the ordinance rezoning the property did not constitute impermissible spot zoning.

The neighboring residents then appealed to the borough’s zoning hearing board’s ruling to the Allegheny County Common Pleas Court, which ultimately upheld it.

The trial court held that the neighboring residents failed to rebut the presumption of validity and that the rezoned property is a natural extension of adjoining MUN uses.

Subsequently, the neighboring residents appealed the trial court’s ruling to the Commonwealth Court.

On appeal, the neighboring residents raised the following primary issues—that the borough’s zoning hearing board failed to view the ordinance in light of the borough’s comprehensive plan; that the ordinance was invalid because it was not supported by substantial evidence and because it constituted impermissible spot zoning; and because the ordinance was unreasonable and arbitrary.

The Commonwealth Court quickly dispensed with the neighboring residents’ first argument, finding that the borough’s zoning hearing board did not ignore the comprehensive plan and found that contrary to their characterization, the proposed use of the property, as additional parking, was consistent with the purposes of the MUN classification, which include providing for adequate off-street parking.

The remainder of the Commonwealth Court’s memorandum opinion is devoted to the claim of the neighboring residents that rezoning the property constitutes illegal spot zoning.

First, the neighboring residents argued that the borough’s zoning hearing board’s decision was not supported by “substantial evidence.”

The Commonwealth Court, bound by the borough’s zoning hearing board’s findings of fact and credibility, rejected this line of argument, finding that the record demonstrated that the property is surrounded by various land uses, including other mixed use and intensive commercial uses.

The Commonwealth Court also concluded that the borough’s zoning hearing board’s finding that Agile Development required additional parking was supported by substantial evidence.

Turning its attention to the core of neighboring residents’ argument regarding spot zoning, the Commonwealth Court noted that zoning ordinances generally come with a presumption of validity.

Citing to Township of Plymouth v. County of Montgomery, 531 A.2d 49 (Pa. Commw. Ct. 1987), the Commonwealth Court defined spot zoning as any zoning provision adopted without reference to the overall plan or general welfare of the community.

Relying upon Takacs v. Indian Lake Borough Zoning Hearing Board, 11 A.3d 587 (Pa. Commw. Ct. 2010), the Commonwealth Court stated that spot zoning is a “singling out of one lot or a small area for different treatment from that accorded to similar surrounding land indistinguishable from it in character, for the economic benefit or detriment of the owner of that lot.”

According to the Commonwealth Court, the single most determinative factor in identifying a spot zone is whether the property is being treated unjustifiably different from surrounding land, rendering it an “island” with respect to its neighbors, and that a party challenging a spot zone must prove that the zoning provision is arbitrary and unreasonable, with no relation to public health, safety, morals and general welfare.

The Commonwealth Court observed that, under Knight v. Lynn Township Zoning Hearing Board, 568 A.2d 1372 (Pa. Commw. Ct. 1990), when considering whether a property is receiving unjustifiably different treatment from surrounding land, courts should consider the size of the property, along with its topography, location and other characteristics.

Importantly, the Commonwealth Court also noted that the Pennsylvania Supreme Court in Shubach v. Silver, 336 A.2d 328 (Pa. 1975) cautioned that “a reviewing court cannot take too constrained a view” of the surrounding neighborhood.

The Commonwealth Court went on to clarify that spot zoning does not occur simply because the rezoning occurs at a property owner’s request or because the property owner will benefit from the rezoning.

Additionally, in the memorandum opinion, the Commonwealth Court stated that, even if the neighboring residents intended to argue that the borough had an improper rationale for enacting the ordinance, a municipality’s state of mind when enacting an ordinance is irrelevant to the ordinance’s validity under Plaxton v. Lycoming County Zoning Hearing Board, 986 A.2d 199 (Pa. Commw. Ct. 2009).

Furthermore, the Commonwealth Court emphasized that, contrary to the Supreme Court’s guidance in Schubach, the neighboring residents took “too constrained a view” of the property, noting that they construed the property to be a “peninsula of property that was being treated differently” solely based on its relationship to their own R-1 zoned properties, rather than within the context of all surrounding properties, which included other MUN and CRD uses.

Next, the Commonwealth Court observed that the property as rezoned continued to allow for residential dwellings, just as the adjacent R-1 district does.

The Commonwealth Court pointed out that the mere fact that a property can have a nonresidential use does not result in a peninsula of commercially zoned property in a sea of residentially zoned property.

In essence, the Commonwealth Court reasoned that, by improperly focusing solely on the property’s relationship to the neighboring R-1 parcels, the neighboring residents’ argument failed to appreciate the purpose of the MUN zoning classification.

The rezoned property, the Commonwealth Court concluded, could continue to be used for residential purposes in addition to now permitted commercial uses.

Additionally, the Commonwealth Court noted the importance of permitting the “natural extension of an already-existing, adjacent zoning district” even where the extension allows for different uses.

Finally, the Commonwealth Court addressed the neighboring residents’ argument that the ordinance was arbitrary and unreasonable.

The Commonwealth Court stressed that even though a significant number of neighboring residents opposed rezoning the property, this opposition alone does not signify that the ordinance bears no relation to the public health, safety, morals and general welfare.

The Commonwealth Court then stated that the rezoned property is consistent with the purpose of the MUN district as it created a buffer area between commercial and residential uses.

Additionally, the Commonwealth Court explained that the ordinance is consistent with the comprehensive plan as it ensures sufficient off-street parking for existing and new development, thus protecting the public health, safety, and welfare by freeing the streets of motor vehicles.

Accordingly, the Commonwealth Court ruled that their argument that the ordinance is invalid because it is unreasonable, arbitrary, and not substantially related to the borough’s police power, must fail.

—Dylan Beltrami, a third-year law student at the Drexel University Thomas R. Kline School of Law, who is interning at the firm, assisted in the preparation of this article.

Alan Nochumson is the principal of Nochumson P.C., a legal services firm with a focus on real estate, land use & zoning, litigation, and business counseling for the people of Pennsylvania and New Jersey. Alan is a frequent author and lecturer on issues commonly confronting businesses, individuals, and professionals. You can reach him at 215-600-2851 or alan.nochumson@nochumson.com.

Alex Hamilton is an associate attorney at the firm. You can reach him at 215-399-1346 or alex.hamilton@nochumson.com.

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In a recent opinion, the Pennsylvania Supreme Court in South Bethlehem Associates v. Zoning Hearing Board of Bethlehem Township, 294 A.3d 441 (Pa. 2023) established that a party appearing before a local zoning board cannot subsequently seek judicial review of a variance request granted by the local zoning board unless that party is deemed an aggrieved party. Specifically, the Supreme Court in South Bethlehem Associates clarified that a party will not qualify as aggrieved solely because their business will someday compete with the future business of the party requesting a zoning variance.

In South Bethlehem Associates, the appellee, Central PA Equities 30, owned a 3.5-acre parcel and sought to construct a four-story, 107-room hotel on their property, the opinion said.

According to the opinion, the proposed hotel would be approximately a couple of blocks away from an existing hotel owned by the appellant, South Bethlehem Associates.

Finding itself in the light industrial/office campus (phased) zoning district and neighboring a residential neighborhood, the Bethlehem Township Zoning Code required that the proposed hotel have a 150-foot setback and construct an earth berm within the setback, the opinion said.

However, adhering to these limitations, the subject property would have a buildable area too small to house a hotel, the opinion said.

Additionally, constructing earth berms would be impractical because of a utility easement for power lines on that side, the opinion said.

Resultantly, the appellee requested a dimensional variance to utilize a 74-foot setback, a 76-foot variance from the original requirement, and a waiver of the earth-berm requirement, the opinion said.

Eventually, the Bethlehem Zoning Board (hereinafter the board) held a hearing on the variance request, the opinion said.

At this hearing, the appellant appeared and entered their appearance at the hearing on the appropriate form as an objector, the opinion said.

In opposition to the appellant’s appearance at the hearing, the appellee argued that the appellant did not have standing to challenge the variance request as the appellant was only there as a business competitor to contest the hotel’s construction, the opinion said.

In response to the stated opposition, the appellant argued that it had standing to challenge the variance request as it held an interest in the construction of a future hotel that would be mere blocks away from its hotel, the opinion said.

Citing to Section 10908(3) of the municipalities planning code (hereinafter the MPC), the board ruled that the appellant had such standing because by entering his appearance on the objector sheet, it became a party of record, the opinion said.

Nonetheless, the board unanimously granted the appellee’s requested variances, the opinion said.

Afterwards, the appellant appealed this administrative ruling to the Northampton County Court of Common Pleas.

Again, the appellee argued that the appellant did not possess standing to challenge the variance request.

The trial court in South Bethlehem Associates ruled that, since the appellant timely appeared before the Board as an objector and was presumed to be affected by the variance request because it owned a nearby property, it possessed standing to appeal the administrative ruling.

In addition, the trial court in South Bethlehem Associates affirmed the board’s decision to grant the underlying variance request.

Following the trial court’s ruling, the appellant appealed it to the Pennsylvania Commonwealth Court.

The Commonwealth Court ultimately affirmed the trial court’s ruling, but ruled that the appellant lacked standing in challenging the variance request.

In doing so, the Commonwealth Court, citing to In re Farmland Industries, 531 A.2d 79, 84 (Pa. Commw. 1987), declared that one cannot challenge a variance request by way of judicial review solely to deter free competition. The Commonwealth Court explained that the appellant did not show aggrievement here because the impact upon their interest stemmed from the competition that would arise from the new hotel, not from the actual variance request itself.

Afterwards, the Supreme Court granted allocatur limited to whether the Commonwealth Court erred in holding that the appellant did not have standing to seek judicial review.

More precisely, the Supreme Court analyzed whether the Commonwealth Court incorrectly applied an aggrieved person standard even though the legislature had repealed that standard.

In the majority opinion penned by Justice Sallie Updyke Mundy, the Supreme Court first explained that traditionally, standing to initiate judicial proceedings depends on the litigant suffering an adverse effect.

According to Mundy, this is determined by a court evaluating the following factors: whether the complaining party’s interest in conformity with the law is greater than that of the general public; whether the party’s harm was actually caused by the issue being complained of; and whether the harm is remote or speculative.

Mundy emphasized the distinction between what is required to appear as an adverse party at a hearing before a local zoning board as compared to subsequent judicial proceedings.

To compare the two, Mundy cited to the liberal standard for standing at a hearing before a local zoning board laid out in Section 908(3) of the MPC: “The parties to the zoning board hearing shall be the municipality, any person affected by the application who has made timely appearance of record before the board, and any other person including civic or community organizations permitted to appear by the board. The board shall have power to require that all persons who wish to be considered parties enter appearances in writing on forms provided by the board for that purpose.”

Distinguishing this standing requirement from standing during subsequent judicial proceedings, Mundy expressed that the legislature’s intent may have been to avoid delays at local zoning boards by avoiding arguments over whether parties were aggrieved, but that there is no indication that the legislature likewise meant to eliminate the aggrievement standard as a predicate to an appeal to a court of law.

Next, explaining the purpose of standing, Mundy highlighted that it aims to protect the court system and the public from improper plaintiffs.

Mundy then elaborated that an improper plaintiff has no legally enforceable interest affected by the matter complained of, stressing that, even if there is a harmed interest, the key language is that the interest must be a “legally enforceable” one, as this alone is what the law protects.

Hinging on this distinction, Mundy clarified that, being free from market competition may very well be in the interest of the already-established hotel, but it is not a legally enforceable interest that courts will protect.

Mundy framed this argument in public policy, noting that courts protect market competition but not market competitors from competition by pointing out that such an interest in avoiding competition cannot be the basis for a claim to aggrievement for purposes of judicial standing.

Accordingly, the Supreme Court affirmed the Commonwealth Court’s ruling and simultaneously confirmed the principle that an appellant will lack standing as an aggrieved person if their only affected interest is the desire to suppress competition in the open market.

Dylan Beltrami, a third-year law student at the Drexel University Thomas R. Kline School of Law, who is interning at the firm, assisted in the preparation of this article.

Alan Nochumson is the principal of Nochumson P.C., a legal services firm with a focus on real estate, land use & zoning, litigation, and business counseling for the people of Pennsylvania and New Jersey. Nochumson is a frequent author and lecturer on issues commonly confronting businesses, individuals and professionals. You can reach him at 215-399-1346 or alan.nochumson@nochumson.com.

Tamarrin Johnson is an associate attorney at the firm. You can reach her at 215-399-1346 or tamarrin.johnson@nochumson.com.

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In a published opinion issued by the Pennsylvania Supreme Court in GM Berkshire Hills v. Berks County Board of Assessment, 290 A.3d 238 (Pa. 2023), a split court upheld the ability of school districts to file real estate tax assessment appeals on recently sold, underassessed properties.

In GM Berkshire Hills, GM Berkshire Hills, LLC and GM Oberlin Berkshire Hills, LLC purchased 47 residential buildings containing 408 rental units for a combined sales price of $54,250,000 in 2017, the opinion said.

The last countywide assessment of the property was in 1994 and placed the property value at $10,448,700.

Meanwhile, the Wilson School District (hereinafter the district) filed an appeal pursuant to their 2018 resolution to select specific property assessments to appeal.

According to the opinion, the district’s 2018 resolution established that a property would be selected for an appeal if: there was a recent sale of the property as shown by data obtained from the State Taxation Equalization Board; and there was an underassessment by at least $150,000.

In doing so, to determine if there was an underassessment, the district claimed it took the recent sales price times the common-level ratio (hereinafter the CLR) minus the current assessed value, the opinion said.

Furthermore, the district stated that its selection criteria did not consider the type of use of the property in determining whether to file a real estate tax assessment appeal.

After filing its appeal to have the apartment complex assessment in GM Berkshire Hills raised, the county assessment office increased the assessed value to $37 million, the opinion said.

Subsequently, the property owners appealed that ruling to the trial court, arguing that the district’s policy improperly created a subclassification of properties that violated the uniformity clause that is set forth in Article VIII, Section 1 of the Pennsylvania Constitution.

The uniformity clause declares that “all taxes shall be uniform, upon the same class of subjects, within the territorial limits of the authority levying the tax, and shall be levied and collected under general laws.” In essence, the uniformity clause constrains taxing districts in their selection of properties for appeal by prohibiting any discriminatory methodology.

In GM Berkshire Hills, the district’s financial officer argued that the district selected the $150,000 threshold because it was high enough to allow recovery of appeal costs while simultaneously being low enough to encompass properties of varying types.

The district then supplied the trial court with evidence showing that its recent appeals comprised properties of different types, and that they did not select properties based on their type of classification, the opinion said.

The trial court ultimately ruled in the district’s favor.

Subsequently, the property owners appealed the trial court’s ruling to the Pennsylvania Commonwealth Court.

In rendering its decision, the Commonwealth Court relied upon the Supreme Court’s ruling in Valley Forge Towers Apartments N v. Upper Merion Area School District, 163 A.3d 962 (Pa. 2017).

In Valley Forge Towers, a school district only appealed assessments of commercial properties, arguing that this was because of the increased prospect of recovering appeal costs through enhanced tax revenue from commercial properties.

The Supreme Court in Valley Forge Towers held that such targeting of properties created a subclass subjected to differential treatment, thus, the appeal violating the uniformity clause.

The Commonwealth Court in GM Berkshire Hills then ruled in favor of the district, finding that that the district’s resolution rested on financial considerations rather than property types which is entirely permissible under the uniformity clause.

The property owners in GM Berkshire Hills then appealed the Commonwealth Court’s ruling to the Supreme Court and the Supreme Court elected to hear the merits of the appeal.

Ultimately, the Supreme Court in GM Berkshire Hills decided to hear the appeal but limited it to the following issue: “do a school district’s selective real estate tax assessment appeals violate the uniformity clause of the Pennsylvania Constitution when the school district chooses only recently sold properties for appeal, leaving most properties in the district at outdated base-year values?; and “do a school district’s selective real estate tax assessment appeals violate the uniformity clause of the Pennsylvania Constitution when the school district chooses only recently sold properties that would generate a minimum amount of additional tax revenue for appeal, leaving most properties in the district at outdated base-year values?”

In the opinion in support of affirmance penned by Justice Sallie Updyke Mundy, the Supreme Court started by noting the general principle that all properties in a taxing district lie within a single class that requires uniform treatment. In other words, placing properties in subclasses and treating them differently is expressly prohibited.

Mundy noted that there are two ways that one can undermine tax uniformity when a taxing district appeals the assessment of an individual property. The first arises when one property’s assessment is subject to review and adjustment while other properties in the taxing district are not. The second stems from a taxing district’s selection policy.

Regarding selection policies, Mundy pointed out that the district’s methodology is not prohibited because the district’s policy does not create a prohibited subclass of properties barred by an impermissible characteristic, such as the type or use of the property, but rather it enhances uniformity by selecting the most nonuniform properties in light of assessment and sales price disparities for appeal.

Mundy emphasized that, unless there is a scenario where the CLR does not represent the average assessment ratio of the properties in the district, then the subject property’s assessment has been adjusted to become as uniform as possible with all the properties in the district.

Mundy concluded her opinion by stating that, although one does not appeal every assessment and not all real property appreciates at the same rate, some variance in assessment ratios will occur every year. However, Mundy held that the uniformity clause only requires rough uniformity. Nevertheless, Mundy stressed that, if inequalities ever become prevalent, then the court may order a countywide reassessment.

To present the other side of the court split, Justice Christine Donohue in her opinion in support of reversal of the Commonwealth Court’s ruling, stressed that the district’s policy constituted a subclassification of property for real estate tax assessment appeal purposes and thus violated the uniformity clause given its discriminatory impact.

Succinctly put, Donohue explains that the district first categorizes properties based on their newly purchased status. Next, the district further subdivides properties based on their sale price, appealing assessments only if they appear to be underassessed by at least $150,000. Thus, in Donohue’s eyes, the district’s policy creates an unconstitutional subclass of properties based on their sale prices, and he would reverse the Commonwealth Court’s ruling.

Finally, Justice Kevin Dougherty wrote a separate opinion in support of reversal of the Commonwealth Court’s ruling.

Dougherty similarly noted that the CLR does not represent uniformity, and the selection process identifies properties with the highest disparities between assessed and reassessed value. As such, Dougherty also believed that such a selection process violated the uniformity clause.

However, Dougherty went a step further than Donohue and concluded that frequent countywide assessments of properties in each taxing district could solve future dilemmas such as this one, stating that Pennsylvania is one of two states that lacks statutorily mandated reassessments on a fixed interval. As such, Dougherty urged the legislature to repeal its indefinite use scheme and instead enact a mandatory reassessment period every few years.

Dylan Beltrami, a third-year law student at the Drexel University Thomas R. Kline School of Law, who is interning at the firm, assisted in the preparation of this article.

Alan Nochumson is the principal of Nochumson P.C., a legal services firm with a focus on real estate, land use & zoning, litigation, and business counseling for the people of Pennsylvania and New Jersey. Nochumson is a frequent author and lecturer on issues commonly confronting businesses, individuals and professionals. You can reach him at 215-399-1346 or alan.nochumson@nochumson.com.

Alex Goldberg is an associate attorney at the firm. You can reach him at 215-399-1346 or alex.goldberg@nochumson.com.

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This past June, the city government in Philadelphia passed its budget for the upcoming fiscal year which begins on July 1, 2023.

Of particular importance to those individuals who and companies which own investment properties in Philadelphia, the newly passed budget includes an additional $1 million to enable the city of Philadelphia’s Department of Licenses and Inspections (“L&I”) to increase its number of inspectors tasked with governmental enforcement of the zoning and building codes as well as an additional $560,000 to allow the City Law Department to hire an additional 8 new attorneys to assist L&I with such governmental enforcement.

Since the pandemic, we have witnessed first-hand that L&I has been increasingly levying governmental fines on property owners and tenants who allegedly do not properly maintain their properties. Some of these governmental fines equal $2,000 per day. In fact, in 2020, a real estate firm brought a class action lawsuit against the city government in Philadelphia, claiming that it is issuing excessive governmental fines as a revenue generating vehicle.

From our experience, however, many of these governmental fines may be reduced or avoided altogether when challenged through administrative or judicial proceedings.

If you have received a notice from L&I or other city agencies in Philadelphia threatening the imposition of such governmental fines, please feel free to contact Alan Nochumson at either (215) 600-2851 or alan.nochumson@nochumson.com to discuss how to best approach the situation under the circumstances.

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This past June, the city government in Philadelphia passed its budget for the upcoming fiscal year which begins on July 1, 2023.

Of particular importance to those individuals who and companies which own investment properties in Philadelphia, the newly passed budget includes an additional $1 million to enable the city of Philadelphia’s Department of Licenses and Inspections (“L&I”) to increase its number of inspectors tasked with governmental enforcement of the zoning and building codes as well as an additional $560,000 to allow the City Law Department to hire an additional 8 new attorneys to assist L&I with such governmental enforcement.

Since the pandemic, we have witnessed first-hand that L&I has been increasingly levying governmental fines on property owners and tenants who allegedly do not properly maintain their properties. Some of these governmental fines equal $2,000 per day. In fact, in 2020, a real estate firm brought a class action lawsuit against the city government in Philadelphia, claiming that it is issuing excessive governmental fines as a revenue generating vehicle.

From our experience, however, many of these governmental fines may be reduced or avoided altogether when challenged through administrative or judicial proceedings.

If you have a received a notice from L&I or other city agencies in Philadelphia threatening the imposition of such governmental fines, please feel free to contact Alan Nochumson at either (215) 600-2851 or alan.nochumson@nochumson.com to discuss how to best approach the situation under the circumstances.

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