As the rules for the industry continue changing, most are being created at the local level with broader policies initiated by the Congress and state legislators.

There were nearly 100 Bills introduced by the United States Congress in 2007 that contained “sustainable development” in one capacity or another. Of those, only a few advanced to President George Bush’s desk.

The trend carried over to the state level where, although the rhetoric and level of discussion involving the various components affecting the land development industry was more widespread, there was relatively little legislative activity. As is usually the case, most of the new laws and regulations expected to impact our industry are being implemented on the local level. The reality, however, is that regulations are typically a top-down proposition.

Federal Level
It is likely that only a few new 2007 federally-initiated Bills will begin impacting our industry in 2008. Two became law very late in the year and another was still pending as this issue went to print. The Water Resources Development Act of 2007 (WRDA) and Energy Independence and Security Act of 2007 (Energy Bill) each garnered President Bush’s signature. Another, the Farm, Nutrition, and Bio-energy Act of 2007 (Farm Bill), passed the Senate on Dec. 19, 2007, and is thought to be virtually veto-proof due to the affirmative margins it gained in both Congressional houses. Ironically, while the Energy Bill misses the mark in some areas of promoting alternative energy sources, the Farm Bill actually includes some incentives.

 
Water Resources Development Act of 2007 (WRDA)
WRDA was initially written to provide for the conservation and development of water and related resources. It authorizes and provides for specified water resources development and conservation projects, including flood control, navigation, and environmental projects and studies by the Secretary of the Army Corps of Engineers (USACE).

In essence, it amends the Water Resources Development Act of 1986 and authorizes the USACE to carry out specified projects for navigation, environmental restoration, ecosystem restoration, hurricane and storm damage reduction, and flood damage reduction.

WRDA revises or adds requirements, among other matters, for: (1) a schedule for consolidating federal, state, and local agency and Indian tribe environmental assessments, project reviews, and issuance of all project permits; (2) a coordinated project review process; (3) public access to water resource and related water quality data; (4) pre-construction assistance to state and local governments for remediation, environmental restoration, or reuse of specified areas; (5) plans for regional management of sediment obtained in conjunction with projects; and (6) peer review of project studies by an independent panel of experts.

It also modifies: (1) authorizations of specified water projects in various states; and (2) project authorizations regarding South Florida and the Everglades. In addition, it de-authorizes certain projects and provides for specified land conveyances.

Finally, it directs the USACE to: (1) conduct various studies, including one of drought conditions in the Southwestern United States; (2) evaluates the structural integrity of flood damage reduction projects; (3) recommends a framework for long-term program of wetlands protection, conservation, and restoration in coastal Louisiana; and (4) undertakes navigation improvements and ecosystem restoration for the Upper Mississippi River and Illinois Waterway System. It also establishes the Coastal Louisiana Ecosystem Protection and Restoration Task Force.

Energy Independence and Security Act of 2007 (Energy Bill)
Most of the discussion concerning the Energy Bill that was signed by President Bush on Dec. 19 has, and will focus on the first new vehicle fuel economy law in 32 years, mandating a fourfold increase in the use of biofuels. While not directly impacting our industry, this will be worthy of future discussion because it does impact the trends relating to the design of sustainable neighborhoods.

However, there are a couple of components of the Energy Bill that will be more immediate factors for consideration by the land development industry.

While President Bush claims that the new law is ``a major step toward reducing our dependence on oil, confronting global climate change, expanding the production of renewable fuels and giving future generations of our country a nation that is stronger, cleaner and more secure,'' many of the changes that could have had substantial impacts were not included because of Congressional partisanship.

Unfortunately, like most “sustainable” considerations, this bill mistakenly focuses primarily on buildings. While this is an obvious positive step, we all understand that there is much more to land development than buildings.

The bill calls for improved energy efficiency of appliances such as refrigerators, freezers and dishwashers, and a 70 percent increase in the efficiency of light bulbs. It also calls for energy efficiency improvements in federal buildings and construction of commercial buildings.

The bill will require all general purpose lighting in federal buildings to use Energy Star® products or products designated under the Energy Department's Federal Energy Management Program (FEMP) by the end of Fiscal Year 2013.

The bill will update the Energy Policy and Conservation Act to set new appliance efficiency standards that will save energy. The act amends the Energy Policy and Conservation Act (EPCA) to prescribe or revise standards affecting regional efficiency for heating and cooling products, procedures for new or amended standards, energy conservation, energy efficiency labeling for consumer electronic products, residential boiler efficiency, electric motor efficiency, and home appliances.

The bill will establish an Office of High-Performance Green Buildings (OHPGB) in the U.S. General Services Administration. This office will promote green building technology implementation in federal buildings.

Farm, Nutrition, and Bio-energy Act of 2007 (Farm Bill)
Until the Farm Bill is actually signed, dissected and analyzed, it is difficult to speculate on how it will impact the land development industry. One item is certain, a national farm policy typically factors into the price of land. This alone will change the economic landscape of a changing rural and suburban America.

Also, for the first time, a Farm Bill includes tax credits for bio-fuels production while also funding wind power. In a research report released Dec. 5, 2007, Deutsche Bank's analysts say the wind-energy industry is growing more attractive as an investment option. The report indicated that both entry-level investments and takeover activity are evidence of a greater interest being taken by traditional energy companies in wind energy -- and a new wave of wind power industry consolidation could be beginning.

State Level
Initiatives, in the form of public ballots, involving land development issues were less abundant in 2007 than in 2006. Voters in six states considered a total of 34 ballot questions, but only a few directly affect our industry. In some states, court rulings helped clarify some land use laws.

Alabama
A legislative measure was approved by 79 percent of the voters that increased to $400 million amount of bonds authorized for capital improvements in the state.

California
Currently in California, city or county general land development plans are required by state statute to include specified mandatory elements, including a land use element, a conservation element, and a safety element. Chapter 369 of the Statutes of 2007 now requires these three elements to address flood control management. The land use element now must identify and annually review those “areas covered by the plan that are subject to flooding as identified by flood plain mapping prepared by the Federal Emergency Management Agency (FEMA) or the Department of Water Resources.”

On or after Jan. 1, 2009, and upon the next revision of the housing element, the conservation element must identify rivers, creeks, streams, flood corridors, riparian habitat, and land that may accommodate floodwater for purposes of groundwater recharge and stormwater management. Plus, the safety element must identify flood hazards.

A second new law, SB 2, now Chapter 633 of the Statutes of 2007, amends the housing element requirements of the planning and zoning laws to include a requirement that the local government assess the locality’s emergency shelters needs, and requires that the housing element to identify a zone or zones where emergency shelters are allowed as a permitted use with a conditional use or other discretionary permit.*

New York
An appeals court in New York ruled that open space restrictions placed on an approved subdivision plat is valid for subsequent purchasers. The bottom line was that the imposition of conditions on subdivision plat approvals that are properly filed provide sufficient notice to subsequent purchasers and such conditions should be easily found in the chain of title by professionals who conduct title searches and land surveys.

Following a certified question to the New York State Court of Appeals from the federal Second Circuit Court of Appeals, the Court of Appeals held that an open space restriction placed on a final subdivision plat pursuant to Town Law §276 (which regulates subdivision review), when filed in the Office of the County Clerk (pursuant to Real Property Law §334), is enforceable against a subsequent purchaser. The court also noted that Town Law grants the authority to town regulate land within their borders, that this grant of authority includes the right to impose reasonable conditions on subdivision approvals, and that, “The ability to impose such conditions on the use of land through the zoning process is meaningless without the ability to enforce those conditions…” including against subsequent purchasers.   

Oregon
Oregon voters approved Measure 49 that significantly limits land development and weakened the state’s landmark Measure 37 that requires governments to compensate land owners when regulations reduce the value of their property and it further restricted large developments. It was approved by a 62-38 margin.

The old measure (37) stipulated that if a government regulation (such as a zoning restriction, for example) reduced the value of a piece of property, citizens could demand compensation from the government for the lost revenue. In lieu of paying compensation (which would have run into the billions in Oregon), governments may opt to waive the land use regulation in question. The newly passed Measure 47 allows landowners the right to build a limited number of homes on their property as compensation for land use regulations imposed after they bought their property. It also prohibits subdivisions on high-value farmlands, forests and groundwater-restricted lands, and specifies that claimants may not use Measure 37 to override zoning laws prohibiting commercial and industrial developments on land reserved for homes, farms and forests.

According to a recent article in the Salem, Ore., Capital Press, Oregon residents filed more than 7,000 Measure 37 claims in the three years the measure was in effect. Richard Whitman of the State Department of Justice, who is in line to take over as director of the Department of Land Conservation and Development, said some claims previously rejected under Measure 37 could be approved under Measure 49.

If it seems confusing, it is. Under Measure 49, the state has 120 days from the implementation date to notify Measure 37 claimants of three options:
• Claimants can choose to enter an "express lane," a path that allows claimants to build up to three houses without obtaining an assessment.
• Claimants can enter the "conditional-use lane," a path that allows claimants to build up to 10 houses but requires two assessments and includes several restrictions.
• Claimants can enter the "vested lane," a path that allows claimants to continue developing their Measure 37 claim under the
premise they have vested in the development.

South Carolina
A court ruling may impact the land use policies in South Carolina as an Appeals Court found that a county had authority to adopt a Planned Development Ordinance. The appellants own 162 acres on Edisto Island, which is divided into six parcels and subject to the County’s zoning and land development regulations (ZLDR). Five of the parcels were zoned Agricultural Residential (with a maximum density of one dwelling unit per acre) and one was zoned Agricultural Preservation (with a maximum density of one dwelling unit per 10 acres). To achieve the highest allowed density of one dwelling unit per five acres in this district, an application must be processed through a planned development process. Following a request for a zoning change, the county council rezoned the land to a planned development district. Adjoining property owners commenced a lawsuit alleging that the rezoning by the county violated the ZLDR.

On appeal from a summary judgment motion, where the court below found that the county’s action were contrary to the ZLDR, the Appeals Court reversed, finding that the county’s action were not arbitrary, unreasonable or unjust, and that the county council was authorized to adopt the planned development ordinance.*

Texas
Proposition 7, an amendment to the Texas State Constitution, overwhelmingly passed in November with 80 percent approval and now allows a governmental entity to sell property acquired through eminent domain back to its last owner, at its original purchase price, if the public use of the property has been canceled, if no progress toward the public use is made by a prescribed deadline, or if the property is unnecessary to accomplish a public use.

In addition, Texas voters also passed, with a majority of over 60 percent, $5.25 billion worth of bonds that are directly tied to infrastructure.
Plus, in the wake of the home mortgage situation, voters passed Proposition 8, with almost 80 percent of the vote that clarifies certain provisions relating to the making of a home equity loan and use of home equity loan proceeds.

Washington
Feeding off their success in 2007 when Washington environmentalists helped pass four of their initiatives into law, including cleanup of Puget Sound cleanup, the doubling of state grants for purchase of parks and open space, they recently identified their four priorities for 2008; and they come with bipartisan support, relatively low startup costs and few obvious enemies. According to reports in The Olympian, the environmental community in the state of Washington will be lobbying the legislature for more urban trees as well as land-use and zoning changes that encourage cities to be better served by mass transit.

Local Level
Meanwhile, some cities are taking aggressive steps to change the building and development climate. These can be as wide-ranging as there are cities and counties. Professionals within the industry must realize that local governments are mimicking the demands of their residents and they vary widely.

San Francisco Mayor Gavin Newsom introduced a measure in mid-December that would drastically alter the city's building codes. If the Board of Supervisors approves the legislation, San Francisco would have the country's most stringent environmentally friendly building standards.

The ordinance would require that new residential buildings over 75 feet tall, new commercial buildings over 5,000 square feet and renovations on buildings over 25,000 square feet comply with stringent standards developed by the U.S. Green Building Council. By 2012, new projects and renovations would be required to comply with the strictest levels of those standards known as Leadership in Energy and Environmental Design, or LEED®.

According to Newsome, the required environmental guidelines would result in San Francisco being “the greenest large city in the United States of America.”

Last year, San Francisco began fast-tracking permits for developers who voluntarily met the LEED standards. SLDT