Following the success of his October 18, 2017 presentation to the Suffolk County Village Officials Association, entitled "Homestay Companies: A Guide To Short-Term Rental Regulations," Mark Cuthbertson prepared a journal article detailing the essential elements his presentation.  This article was published in the October 23, 2017 edition of the New York Law Journal.

A reprint of the published article can be downloaded here.

In March of 2000, Plaintiff applied to the Planning Board for subdivision approval to develop a nearly 400-acre parcel he buying. The project would include 385 housing units and “an equestrian facility, baseball field, tennis courts, clubhouse, on-site restaurant and a golf course that wove through the property.” In October 2003, the Planning Board “deemed complete” Plaintiff’s Draft Environmental Impact Statement (“DEIS”). However, in 2003 the Town Board approved amended zoning regulations. Plaintiff was assured by the Town Planner that he could meet the new requirements with only “a modest amount of additional work” and would soon receive preliminary approval. Plaintiff revised his plan, but the Town again amended its zoning regulations. Eleven months later, Town amended its zoning law for a third time without informing Plaintiff in advance. Plaintiff revised his application again, and in February 2006, the Town again changed its zoning law without warning.  Plaintiff submitted yet another plan in March 2007, and the Town changed its zoning for the fifth time, again without notice. Plaintiff then filed suit in federal court. The District Court held Plaintiff had failed to show that seeking a final decision from the Town would be futile, and Plaintiff appealed.

On appeal, Plaintiff conceded that the Town has not reached an official final decision, but argued that he did not need to meet this requirement of the ripeness doctrine because of the futility exception. The Court reasoned that requiring Plaintiff to persist with this protracted application process to meet the final decision requirement would implicate concerns about disjointed, repetitive, and unfair procedures.  Accordingly, the Court ruled Plaintiff’s claim was ripe for review.

With respect to the takings claim, the Court weighed the three Penn Central factors for whether the interference rose to the level of a taking: (1) the economic impact of the regulation on the claimant; (2) the extent to which the regulation has interfered with distinct investment-backed expectations; and (3) the character of the governmental action. On the first prong, the Court held the Town had effectively prevented Plaintiff from making any economic use of his property. The second was similarly satisfied, as when Plaintiff bought the property, it was already zoned for residential use, and his expectation was that he would begin recouping that investment after a reasonable period to get the Town's approval for some form of development. On the final prong, the Court found the Town's alleged conduct was unfair, unreasonable, and in bad faith. Thus, the court held that Plaintiff stated a non-categorical takings claim and remanded it to be heard on the merits in District Court.

The case was Sherman v Town of Chester, 752 F.3d 554 (2nd Cir. 2014).

In March of 2000, Plaintiff applied to the Planning Board for subdivision approval to develop a nearly 400-acre parcel he buying. The project would include 385 housing units and “an equestrian facility, baseball field, tennis courts, clubhouse, on-site restaurant and a golf course that wove through the property.” In October 2003, the Planning Board “deemed complete” Plaintiff’s Draft Environmental Impact Statement (“DEIS”). However, in 2003 the Town Board approved amended zoning regulations. Plaintiff was assured by the Town Planner that he could meet the new requirements with only “a modest amount of additional work” and would soon receive preliminary approval. Plaintiff revised his plan, but the Town again amended its zoning regulations. Eleven months later, Town amended its zoning law for a third time without informing Plaintiff in advance. Plaintiff revised his application again, and in February 2006, the Town again changed its zoning law without warning.  Plaintiff submitted yet another plan in March 2007, and the Town changed its zoning for the fifth time, again without notice. Plaintiff then filed suit in federal court. The District Court held Plaintiff had failed to show that seeking a final decision from the Town would be futile, and Plaintiff appealed.

On appeal, Plaintiff conceded that the Town has not reached an official final decision, but argued that he did not need to meet this requirement of the ripeness doctrine because of the futility exception. The Court reasoned that requiring Plaintiff to persist with this protracted application process to meet the final decision requirement would implicate concerns about disjointed, repetitive, and unfair procedures.  Accordingly, the Court ruled Plaintiff’s claim was ripe for review.

With respect to the takings claim, the Court weighed the three Penn Central factors for whether the interference rose to the level of a taking: (1) the economic impact of the regulation on the claimant; (2) the extent to which the regulation has interfered with distinct investment-backed expectations; and (3) the character of the governmental action. On the first prong, the Court held the Town had effectively prevented Plaintiff from making any economic use of his property. The second was similarly satisfied, as when Plaintiff bought the property, it was already zoned for residential use, and his expectation was that he would begin recouping that investment after a reasonable period to get the Town's approval for some form of development. On the final prong, the Court found the Town's alleged conduct was unfair, unreasonable, and in bad faith. Thus, the court held that Plaintiff stated a non-categorical takings claim and remanded it to be heard on the merits in District Court.

The case was Sherman v Town of Chester, 752 F.3d 554 (2d. Cir. 2014).

In 1987, the Town of Union Vale Planning Board issued a negative declaration pursuant to the State Environmental Quality Review Act (SEQRA) regarding a proposal to subdivide a 950-acre parcel of real property owned by plaintiffs/petitioners.  Plaintiffs/petitioners later sought and received approval to subdivide a portion of the property, which was developed.

In 2012, plaintiff/petitioner Dryfoos, to whom a portion of the property had been sold, applied for preliminary plat approval to subdivide the remainder of the parcel using the 1987 negative declaration. The Planning Board found that the 1987 negative declaration was inapplicable and ruled the application was incomplete. Plaintiffs/petitioners commenced this action to recover damages pursuant to 42 USC § 1983, claiming the Planning Board's determination violated their substantive due process rights. The trial court granted the branch of defendant/respondent's motion alleging a violation of constitutional rights pursuant to 42 USC § 1983, and denied plaintiffs/petitioners’ motion for leave to renew their opposition.  Plaintiffs/petitioners appeal.

The Appellate Division, Second Department stated that to establish a violation of substantive due process, plaintiffs must establish “a cognizable or vested property interest, not the mere hope of one.” Here, plaintiffs/petitioners were required to establish a “legitimate claim of entitlement” to have the 1987 negative declaration applied to their present application. As the Planning Board's discretion was not “so narrowly circumscribed” that approving the application of the 1987 negative declaration was “virtually assured,” plaintiffs/petitioners failed to allege a cognizable property interest.

The case was Leonard v Planning Bd. of Town of Union Vale, 136 A.D.3d 873 (2d Dep’t 2016).

On October 18, 2017, Mark Cuthbertson gave a presentation at the Suffolk County Village Officials Association's annual municipal training event.  Mr. Cuthbertson's presentation, entitled "Homestay Companies: A Guide To Short-Term Rental Regulations," examined different approaches to regulating short-term rentals in light of the unique regulatory challenges posed by companies such as AirBnB. 

A copy of the PowerPoint that accompanied  Mr. Cuthbertson's presentation can be downloaded here.

In 2003, Plaintiff Troy Sand & Gravel Company, Inc. (“Plaintiff”) applied for a mining permit from the Department of Environmental Conservation (“DEC”) to operate a quarry in the Town of Nassau, Rensselaer County. Plaintiff also applied for a special use permit and site plan approval from defendant Town of Nassau. DEC, as the lead agency for a coordinated review under the State Environmental Quality Review Act (“SEQRA”), issued a positive declaration, and Plaintiff prepared a draft environmental impact statement in 2006. After a public hearing and comments, Plaintiff prepared a final EIS in 2007. Thereafter, DEC issued its SEQRA findings, approved the project, and granted the mining permit.

Following DEC’s approval, the Town filed an action challenging DEC’s findings, and in the subsequent years the parties have litigated at least three related actions that have come before the Appellate Division, Third Department.  The instant case arose when Plaintiff filed a declaratory judgment action seeking a declaration that the Town was from conducting its own review of the environmental impact of the proposed quarry as part of its zoning determination.  The trial court granted a preliminary injunction to that effect, but the Third Department reversed and vacated the injunction on appeal. The Town Board then rescinded its determination that the permit was complete, and Plaintiff commenced a separate Article 78 proceeding to reverse the decision and for a declaratory judgment that the Town was limited to relying on the existing SEQRA record to justify its determination.  As the Supreme Court refused to allow consolidation of the Article 78 and pending appeal, the Third Department addressed the Article 78 in a separate, simultaneously issued decision that refers.

As a preliminary matter, the Court noted that while the Town is bound by DEC's SEQRA findings and may not repeat the SEQRA process, it still retains authority to make an independent review of Plaintiffs' application for a special use permit based on the standards laid out in the applicable zoning regulation. Here, the full SEQRA record, spanning thousands of pages, reflected the hard look taken by DEC at the proposed quarry's environmental impacts, made with the Town's extensive involvement. Allowing the Town to rely on information outside of the SEQRA record would undermine the efficiency and coordination goals of SEQRA. Accordingly, the Court held that the Town must base its determination of the environmental impact for zoning purposes on the record developed as part of the coordinated review conducted pursuant to SEQRA.

The case was Troy Sand & Gravel Co. Inc. v. Town of Nassau, 125 A.D.3d 1170 (3d Dep’t 2015).  The Article 78 was decided in a separate, but related decision, Troy Sand & Gravel Co. Inc. v. Town of Nassau, 125 A.D.3d 1188 (3d Dep’t 2015).

Petitioner sought to demolish the structure on its property and construct a 5,400 square-foot restaurant in its place. The Village of Rockville Centre’s (“Village”) Zoning Code required Petitioner to have 54 off-street parking spaces. As the property did not have any off-street parking, Petitioner proposed to merge the subject property with the adjoining lot that it also owned. This would allow Petitioner to utilize an exception to the off-street parking requirement for “interior restaurants that abut municipal parking fields,” as the adjoining property was adjacent to a municipal parking lot. When Petitioner’s restaurant was substantially completed, the Building Department discovered that the proposed merger had never taken place. As such, the Building Department directed Petitioner to apply for a parking variance. Petitioner applied, relying on a license agreement which allowed the petitioner access to the adjoining property’s 40 exclusive parking spaces between 4:00 p.m. and 12:30 a.m. on Monday-Friday. The Village’s Zoning Board of Appeals (Z”BA”) granted the parking variance but imposed the conditions that the restaurant’s operating hours be restricted to the times in the lease agreement, and mandated valet parking. Petitioner commenced a CPLR article 78 proceeding to annul these conditions. The Supreme Court granted Petitioner’s request, and the ZBA appealed.

On appeal, the Second Department found that the ZBA’s conditions were proper because they “related directly to the use of the land and were intended to protect the neighboring commercial properties from the potential adverse effects of the petitioner’s operation, such as the anticipated increase in traffic congestion and parking problems.” The ZBA’s rationale was supported by empirical and testimonial evidence, as Petitioner’s own expert stated that there was a high demand for parking in the area of the subject restaurant. Accordingly, the petition to annul the conditions restricting hours of operation and requiring valet parking was denied.

The case was Bonefish Grill, LLC v Zoning Board of Appeals of the Village of Rockville Centre, 2017 WL 4275872 (2d Dep’t September 27, 2017).

Respondent Morrow and her husband operated a home improvement business out of a building located on their residential property in the Village of Clifton Springs, and had done so for nearly 45 years. This business had been “grandfathered” as a non-conforming use following the enactment of the Village of Clifton Springs Zoning Ordinance. After the death of Morrow's husband, a former employee continued working out of the building until Morrow came to terms with another individual to permit him to operate an HVAC business out of the building. Morrow applied for a building permit to make nonstructural changes to the building to accommodate the HVAC business, and the Code Enforcement Officer denied the building permit on the ground that Morrow needed a special use permit. Morrow subsequently applied for a special use permit, which was granted by the Village of Clifton Springs Zoning Board of Appeals. Petitioner commenced a proceeding under CPLR Article 78 seeking to annul of the issuance of a special use permit, but the Supreme Court issued a judgment dismissing the petition.  Petitioner appealed.

On appeal, the Appellate Division, Fourth Department noted that § 120–55 of the Zoning Ordinance provides that the ZBA may permit “any nonconforming use of a structure” to “be changed to another nonconforming use, provided that the ZBA shall find that the proposed use is equally appropriate or more appropriate to the district than the existing nonconforming use.” The Court concluded that the ZBA's determination that Morrow did not discontinue or abandon the nonconforming business use of the property was a reasonable application of § 120–55. Finally, although it was appropriate for the ZBA to request such records, Morrow's failure to present records of ongoing business activity did not constitute a basis to set aside the ZBA's determination.

Based on the forgoing, the Court affirmed the Supreme Court’s decision to dismiss the petition.

The case was Bounds v Village of Clifton, 137 A.D.3d 1759 (4^th Dep’t 2016).

Petitioners brought a hybrid Article 78 / declaratory judgment action seeking review of two resolutions passed by the Town Board of the Town of Kent authorizing the construction and operation of a 150–foot monopole wireless communications tower by Defendant/Respondent Homeland Towers, LLC.  The lower court denied the petition, dismissed the proceeding, and declared that the resolutions are not null and void.  Petitioners appealed, and Respondent moved to dismiss the appeal as academic in light of the completion of the tower.

The Appellate Division, Second Department noted that “typically, the doctrine of mootness is invoked where a change in circumstances prevents a court from rendering a decision that would effectively determine an actual controversy.”  For cases involving a construction project, the court must consider how far the work has progressed, however a “race to completion cannot be determinative.” As such, other factors, such as whether the plaintiff sought a preliminary injunction to prevent construction from commencing or continuing during the pendency of the litigation, must also be weighed.  Here, Petitioners never requested a preliminary injunction, and the Court found their claim that they did not do so due to monetary constraints “unavailing under the circumstances of this case.”  As Respondent “established that the construction of the tower was not performed in bad faith or without authority, that the work could not be readily undone without substantial hardship,” the Court held that “this appeal does not present any recurring novel or substantial issues that are sufficiently evanescent to evade review otherwise.”   As such, the Court granted Respondent’s motion to dismiss the appeal.

The case was Bruenn v. Town Bd. of Town of Kent, 145 A.D.3d 878 (2d Dep’t 2016).

In 2014, the Department of Buildings of the City of New York (“DOB”) found that, pursuant to New York City Zoning Resolution (“NYCZR”) § 113–11, the maximum permitted floor-to-area ratio for the portion of the subject building located in a C4–2 zoning district was governed by ZR Article II, Chapter 3, and that it was proper to refer to ZR § 34–112 in order to determine how to apply ZR Article II, Chapter 3 within a C4–2 zoning district. Following an administrative appeal, the Board of Standards and Appeals of the City of New York (“BSA”) upheld the determination of the DOB.

On appeal, the court applied the “arbitrary and capricious” standard, and found that, according proper deference to the interpretation given to ZR § 113–11 by the DOB, the BSA’s determination in upholding the determination of the DOB had a rational basis. Accordingly, the court held that the Supreme Court of New York properly denied the petition and dismissed the proceeding.

The case was Quentin Road Development, LLC v. Collins, 150 A.D.3d 859 (2d Dep’t 2017).