Public Actors, Private Law: Local Governments’ Use of Covenants To Regulate Land Use
abstract. Though covenants are usually considered the private sector’s alternative to zoning, governments also use covenants to control land use. Governments choose between zoning and covenants, and this choice illuminates the legal differences between the two tools. Covenants and zoning are not distinguished by the substantive restrictions each tool can impose on land use. Rather, a critical distinction between the two is that governments use the customizability of covenants, as tools of private law, to limit citizen enforcement of the covenants’ land use provisions. Zoning, by contrast, allows for citizen enforcement. Zoning also requires greater public participation and involves different amendment procedures.
author. Yale Law School, J.D. expected 2015. I thank Claire Priest for supervising this project and for her guidance, as well as Robert Ellickson and Meredith Kane for their insightful comments and Jerold Kayden and Julie Lubin for their willingness to share their expertise. I also thank my terrific editor, Sam Adriance, and Meng Jia Yang and Rachel Bayefsky for their editorial contributions. Suzanne Kahn provided intellectual and editorial support at every stage of the process.
In the United States, two primary systems of land use control operate in parallel: zoning and restrictive covenants.1 Zoning is the public sector’s most important land use tool; it is a regulatory mechanism rooted in the state police power and entrusted to local governments by statute.2 For private parties, covenants are the dominant method of controlling land use.3 Covenants are creatures of the common law and available for use by all property owners.4 While zoning is conventionally associated with public regulation and covenants with private regulation, this distinction is too neat. Local governments routinely use both tools, mixing and matching the two forms of land use control to suit their needs. Given that governments can impose both covenants and zoning, the difference between the tools does not merely stem from the party using them.
Rather, deep-seated legal differences between zoning and covenants remain significant. In particular, while state law generally allows citizens to enforce zoning codes in court,5 local governments can customize covenants to limit—or eliminate—citizen enforcement. Many covenants between local governments and private parties include explicit provisions allowing only the local government, and not neighbors, to enforce the covenants’ land use controls.6 Covenants, in other words, are not simply tools of private parties. Covenants are tools of private law, and local governments harness their private law features, particularly their customizability, to better control land use regulation.
Because zoning and covenants are the dominant forms of land use control,7 legal scholars have long sought to understand the differences between them.8 In the early twentieth century, legal scholars emphasized that covenants provided a greater level of substantive control over development.9 Given the weaker regulatory state of the time, covenants could impose more precise and intrusive restrictions than zoning ordinances could.10 In recent years, though, those substantive differences have fallen away as zoning has developed into an extremely flexible tool of land use regulation. Both zoning and covenants are now commonly used to control every detail of what landowners may build on their property, from the size, shape, and use of a building to far more arcane restrictions.11
Accordingly, legal scholars have turned their attention to the institutional difference between covenants and zoning: they point out that private parties use covenants to regulate land use while governments rely on zoning, and that the differences between public and private regulators have significant practical effects.12 Without diminishing the importance of that institutional difference, this Note reasserts the importance of legal differences between covenants and zoning. While private parties may not enact zoning ordinances, governments can and frequently do use covenants to regulate land use under certain circumstances. In these situations, the Note points out, governments choose which form of land use regulation to employ. Notably, local governments often choose to use covenants for the largest, highest-stakes developments in their jurisdictions.13 By examining the government’s choice between zoning and covenants, this Note holds the institutional variable constant, opening a window into the formal legal differences that still remain between zoning and covenants.
In particular, the Note shows that local governments use covenants to limit the parties who can enforce land use controls, usually to the covenants’ signatories. In contrast, courts broadly allow citizen enforcement of zoning ordinances. Furthermore, there are likely several other important legal differences between zoning and covenants as used by local governments. For example, covenants allow governments to avoid the public participation built into the zoning process. Covenants and zoning also differ in their degree of permanence. Zoning can potentially last forever but is subject to unilateral amendment by the government—another legal factor that may drive a government’s choice of land use control.
Where covenants are used to eliminate citizen enforcement, as municipalities commonly do, covenants empower government officials and disempower neighbors—a group that often has the most at stake for any development proposal but just as often dominates local land use politics with its obstructionist, Not-In-My-Backyard (NIMBY) mentality. To counteract this tendency, I propose using the customizability of covenants not to eliminate but to recalibrate citizen enforcement of land use regulations. Municipalities should allow citizens to enforce particular provisions of covenants—or even allow only particular citizens to do so—and retain the sole power to enforce the remainder. This proposal would strike a balance between the anti-development system of complete citizen enforcement in zoning law14 and the anti-accountability status quo of no citizen enforcement in covenants.
Part I of this Note establishes that governments use covenants for land use planning purposes, thereby challenging the scholarly consensus that covenants and zoning are primarily distinguished on institutional grounds. Part II demonstrates that municipalities do not choose to use covenants in order to impose different substantive restrictions on the use of property, since zoning can achieve functionally identical outcomes. Having shown that zoning and covenants can be identical in both content and institutional origin, this Note then turns to its central argument. Based on a review of covenants and case law concerning municipally imposed covenants, Part III identifies an important reason why local governments use covenants rather than zoning: to limit citizen enforcement. Part III also argues that while cities are right to limit land use litigation through the use of covenants, current practice goes too far, and recommends an alternative approach. Finally, Part IV notes additional legal reasons why a municipality might choose covenants over zoning. Specifically, Part IV explains that using covenants can enable governments to circumvent public participation requirements built into zoning law. Additionally, covenants and zoning are governed by different amendment and expiration procedures, thereby providing governments and developers with different types of certainty and permanence in the long term.
For most legal scholars, the primary difference between zoning and restrictive covenants is institutional: governments use zoning, while private parties use covenants. Scholars tend to “posit zoning and restrictive covenants as alternative and more or less interchangeable means of producing generally similar results.”15 Put differently, zoning and covenants are thought to differ in origin, not in legal effect. The legal consequences of regulation by a covenant or by zoning are seen as largely the same. As one scholar wrote, “There is really little difference between restrictive covenants imposed by a developer and zoning regulations relating to setback lines, lot size, house size and the like, except that one is a property right while the other is a municipal regulation.”16
Even those scholars who focus on differences between covenants and zoning emphasize institutional origins as the most important distinction between the two systems. Robert Ellickson, for example, argues that the private-sector nature of covenants imposes market discipline on their content and allows covenants to optimize resource allocation among landowners.17 For Ellickson, it is the fact that private parties impose covenants, not the legal differences in how covenants and zoning operate, that makes covenants economically preferable to zoning. In the same law-and-economics tradition, William Fischel has argued that although “[s]ome observers regard zoning and private covenants as essentially the same thing,” they are distinct because those establishing covenants own the land being regulated and therefore must bear the opportunity cost of not using the land for activities barred by the regulation.18 Similarly, Richard Briffault distinguishes the two systems of land use control based on how much consensus is required to impose restrictions on landowners: zoning requires only a majority of politically engaged residents, while imposing covenants requires the unanimous consent of the affected property owners.19 Like Ellickson, Briffault emphasizes the different origins of covenants and zoning regulations—in the consensual private sphere and the majoritarian public sphere, respectively—rather than the ways in which covenants and zoning might function differently from a legal perspective. Drawing from work by Richard Brooks, Valerie Jaffee has argued that the use of covenants allows private parties to send signals about the character of a neighborhood.20 Even where zoning renders covenants legally superfluous, Jaffee showed, because they are privately drafted, covenants allow homeowners to express what kind of community they are; zoning, in contrast, can only send signals about the government’s values. Each of these analyses shows a sophisticated understanding of how zoning and covenants differ, but each identifies institutional origin as the source of that difference.
The scholarly emphasis on the institutional origins of zoning and covenants is generally appropriate: zoning is publicly generated and most covenants are privately generated. Of course, only governments can zone, and ninety-one percent of local governments in the United States’s fifty largest metropolitan areas have done so.21 Private land use regulation through covenants is similarly widespread. Homeowner associations established by covenants govern more than half of all new housing in the fifty largest metropolitan areas,22 and covenants presumably govern some additional share without the added layer of homeowner association governance.
However, covenants are not merely a private replacement for zoning. Outside the narrow context of conservation easements,23 legal scholars have largely overlooked the fact that the same local governments regulating land use through the zoning code also do so through covenants.24 Take, for example, the largest-ever downtown redevelopment project in New Haven, Connecticut: the $395 million redevelopment of the New Haven Coliseum site.25 To facilitate that project and others nearby, the City designed and enacted a brand new zone, the BD-3 business district, tailored to the development’s needs.26 At the same time, though, the City also signed a land disposition agreement—an agreement to convey the land to a private developer, subject to various restrictions and covenants—governing the development of the same parcel.27 The City thereby subjected the property to two independent sets of restrictions, each of which the owner is obligated to follow.28 Rather than rely solely on zoning or solely on its land disposition agreement, even though both were custom-designed for the project, the City chose to layer the two systems on top of each other. Clearly, the City of New Haven believed that some municipal goals for this high-profile project would be best served through zoning and others through covenant.
Of course, a local government may not impose a covenant on a private property owner unilaterally. To impose a covenant, it must have some power over the property that allows the consensual negotiation of a covenant with the property owner. For example, governments have this power when selling, transferring or otherwise conveying publicly owned land to private developers, as with the New Haven Coliseum, or when negotiating with landowners over discretionary land use approvals.29 The limited circumstances in which governments can legally impose covenants shape the practical conditions in which governments do so. First, covenants are more useful for regulating individual projects than for broad, neighborhood-scale planning. It is unlikely that an entire neighborhood would be publicly owned, or that all owners in the neighborhood would be seeking a land use approval and be willing to subject themselves to covenants in exchange for those approvals. Second, governments are likely to use covenants to regulate projects they support, on sites where they want to promote development. Disfavored projects are unlikely to receive public largesse in the form of discretionary land use approvals or title to public land. A city will rarely use covenants to stifle development generally or to block a particular development—it can simply deny the approvals or land transfers that are preconditions to imposing a covenant in the first place. Covenants, therefore, will generally be used when a local government wants to support particular developments while still regulating them, not where it wants to block or slow development or engage in broad-scale planning efforts.30
Though governments cannot always impose restrictive covenants on private developments, such covenants are still a regular part of the land use process. Conveyances of public land are less common today than in recent decades, when first urban renewal and then mass tax foreclosures in urban areas generated large portfolios of government-owned land.31 Still, eminent domain is often required for large and complex developments where many parcels of land must be assembled. By using eminent domain, a government takes ownership of development sites, at least temporarily. Covenants can therefore be used to govern some of a city’s most high-profile developments.32 Moreover, governments regularly require the imposition of a covenant when granting a discretionary land use approval.33 In New York City, for example, 146 zoning map amendments—major land use decisions—have covenants associated with them.34 For smaller-scale land use matters, the New York City Department of Buildings has created nine different standardized forms for landowners to use in imposing restrictive covenants on themselves as part of the land use process.35 “[C]ompliance with certain provisions of zoning may require the execution of restrictive declarations,” the Department explains.36 In both large and small land use matters, therefore, the City effectively conditions its grant of certain land use permissions on the imposition of a City-drafted or City-approved covenant rather than a special permit or other zoning-based mechanism. Nor is this process unique to New York City. An overview of the law of deed restrictions in Texas, for example, notes that sometimes covenants “are placed on real property as part of the governmental land use approval process or as a condition to zoning approval.”37
As this discussion shows, the institutional distinction between zoning and covenants is asymmetrical. While private developers or groups of neighbors must always use property law to control land use, local governments have the power to choose between property law and regulatory mechanisms.38 In these situations, moreover, governments are not indifferent between their options: they choose one over the other or mix and match. This suggests that zoning and covenants are not merely public and private equivalents. Their formal differences must manifest functionally as well, allowing for different substantive outcomes even when used by the same party. By looking at covenants imposed by governments, this Note reasserts the importance of the legal, rather than institutional, differences between public and private land use regulation.
In the early twentieth century, as the use of both zoning and restrictive covenants spread quickly across the United States,39 legal scholars began to explore the advantages of these two forms of land use regulation. At that time, the difference was understood to be clearly legal, not institutional. Covenants offered a much wider range of substantive land use restrictions than zoning did. “In planning the modern city, the public authorities can merely sketch the broad outlines in their zoning ordinances,” wrote a 1937 note in the Harvard Law Review.40 Covenants were required because “zoning legislation can not . . . provide for such things as regulating the cost of building, supervising the architecture, or defining the requirements for occupancy.”41 A decade earlier, in 1928, M. T. Van Hecke explained that covenants, unlike zoning, could be used to regulate everything from the shape of subdivided lots to the races of residents allowed to live on a property.42
Today, however, the choice to use covenants rather than zoning cannot be explained by differences in their range of possible restrictions.43 As this Part will demonstrate, changes in land use law have dramatically expanded the reach of zoning. Essentially anything that covenants can restrict, zoning can restrict as well. Moreover, discretionary zoning techniques have turned zoning from a set of generally applicable rules developed ex ante into development-specific requirements negotiated by developers and governments on a case-by-case basis. Therefore, zoning negotiations can now assume the same bargaining posture as covenant negotiations. Accordingly, zoning not only can, but often will, contain the same restrictions as covenants to the extent that negotiated zoning techniques are used. Local governments’ choice of one or the other must therefore reflect some difference other than the substantive land use restrictions imposed.
Since the 1930s, the substantive restrictions that covenants and zoning ordinances can legally require have converged. Most importantly, the Supreme Court declared the enforcement of racially restrictive covenants unconstitutional in Shelley v. Kraemer.44 Governments had long been barred from enacting racial zoning ordinances;45 Shelley put covenants and zoning on equal footing in this regard. Outside the context of racial discrimination, zoning has become dramatically more flexible and is now capable of imposing each of the restrictions that early twentieth century scholars believed could only be imposed by covenant. Architectural restrictions are common features of zoning codes, from bans on buildings that look too different from their neighbors to bans on cookie-cutter developments with “excessive similarity.”46 The Georgia Supreme Court has even upheld an ordinance specifying which styles of wood fence could and could not be built in a particular zone.47 Zoning ordinances can effectively require expensive homes by mandating minimum floor areas and other high-cost design elements.48 Subdivision regulations, governing lot size and shape, are widespread,49 and occupancy requirements, from single-family requirements to Berkeley, California’s “use quota” system requiring diverse mixes of retail use, can be found throughout the country.50
Indeed, there may not be any meaningful limit on how prescriptive a zoning code can be. As Hannah Wiseman has described, zoning rules can now be “equally as detailed as the private covenants seen in suburban subdivisions.”51 In the extreme case, Jerold Kayden has argued that there are effectively no legal limits on how prescriptive a zoning ordinance can be: hypothetically, zoning could provide “a precise delineation of virtually every aspect of development . . . specifying individually for each parcel precisely what public planners want.”52 Regardless of whether such a comprehensive use of zoning is actually legally permissible (politically, it is surely infeasible), zoning as a method of land use regulation has gained near-total flexibility. Accordingly, it is extremely unlikely that cities today choose to use covenants rather than zoning in order to include substantively different land use controls.
The substantive convergence of zoning and covenants is made all the more striking by the widespread use of zoning techniques that create negotiated, rather than mandated, regulatory requirements. Planned unit development ordinances, for example, allow developers to approach local governments with a proposed site plan for a parcel; if approved, the site plan replaces the underlying zoning as the governing regulation.53 This kind of discretionary, negotiated review of land use proposals is increasingly common. In Kansas City, for example, twenty-five square miles of the city were zoned as a “General Planned Development District,” in which all development must go through discretionary review.54 More commonly, municipalities simply impose extremely restrictive zoning rules governing what may be built as-of-right, without discretionary action by the government, and wait for developers to seek variances, rezonings or other forms of discretionary relief.55
These negotiated land use regulations eliminate another important set of differences between zoning and covenants. First, traditional zoning imposed generally applicable rules enacted independently of any particular development proposal, while covenants were negotiated project-by-project.56 Discretionary zoning techniques allow local governments to custom-tailor their regulations to a specific development proposed at a specific moment, just as governments can with covenants. Second, such discretionary processes put the full range of land use issues on the negotiating table. A local government might request that, in exchange for land use approvals formally related only to, say, building height, a developer provide additional parking, affordable units, mansard roofs, or land for a new elementary school.57 This sort of dealing over land use permissions remains common, the Supreme Court’s exactions jurisprudence notwithstanding.58 Given the amount of discretion being exercised, the few factors that are legally not subject to traditional zoning, like the identity of the developer, can quietly enter into the equation as well, and all of these factors can be weighed against each other during negotiations.59 Whether the result of the negotiations is a planned unit development or a covenant, it is a custom-negotiated set of plans and rules that governs development. To the extent that local governments force developers to go through a broad discretionary review process, governments can negotiate for the same deals as those they would seek in covenant negotiations.60 Municipalities therefore seem not to be choosing covenants over zoning—or at least not over discretionary zoning tools—in order to impose substantively different land use controls.
Two New York City programs provide a striking illustration of how covenants and zoning have converged in terms of the substantive regulations they can impose. First is the city’s (E) designation program, designed to ensure landowner compliance with promises about environmental remediation made during rezonings.61 When originally created, the (E) designation, which is part of the zoning code, was used only for properties not controlled by the rezoning applicant, such as properties affected by city-initiated rezonings.62 Where the rezoning applicant controlled the property, the City instead used a restrictive declaration, a form of covenant.63 In 2012, however, New York City merged the two programs on the grounds that they were entirely redundant.64 The City had come to realize that using zoning for some properties and covenants for others did not produce different outcomes for the city. “Having these two different mechanisms within the (E) Program that achieve the same result is unnecessary,” explained the New York City Department of City Planning.65 The original distinction stemmed from a City administrative rule in place at the time, not from any underlying legal difference between zoning and covenant-based methods.66 The merger was meant to make environmental remediation requirements easier for the city to monitor by bringing all (E) designations into the same legal framework.67 Substantively, the zoning and covenant-based mechanisms were “exact equivalent[s].”68 Notably, environmental remediation falls relatively far outside the normal bulk and use concerns of land use regulation, yet both zoning and covenants were equally capable of regulating it.
A second case study not only demonstrates the substantive equivalence between regulatory and property law-based systems of land use controls, but also points toward an important reason that municipalities choose covenants over zoning. Since 1961, the New York City Zoning Code has encouraged developers to build publicly accessible plazas and lobbies as part of their projects.69 In exchange for public space at ground level, the City allows developers to build taller structures.70 For fourteen years, this program was administered entirely through public law mechanisms.71 In 1975, the City added a new property law mechanism for administering the plaza program: “[T]he owner would now file an additional legal instrument, a restrictive declaration running with the parcel, restating the obligations already outlined in the Zoning Resolution . . . .”72
This reform was not intended to allow greater flexibility in the type of public space that developers could provide or other substantive differences in the kinds of plazas that could be created. Rather, the addition of covenants offered “redundancy” and, more specifically, a supplemental enforcement mechanism for the City.73 Enforcement is essential to the plaza program’s success: once a taller tower is complete, private owners often unlawfully restrict public access to plaza spaces, gating them off or renting them to restaurants.74 When zoning rules alone govern these plazas, the restrictions must be enforced through the standard tools of zoning, namely administrative or civil actions, or criminal sanctions.75 Moreover, courts allow citizens to enforce zoning provisions if they “can establish that they have suffered special damage.”76 In contrast, the use of covenants to govern plazas allows a measure of private law flexibility in determining who may challenge landowner behavior in court. In the plaza context, the use of restrictive declarations allows for “different consequences on enforcement depending on how [the declaration] is drafted,” particularly affecting “who can bring the action to enforce.”77 Adding covenants on top of the zoning code did not allow the City to change the substance of its plaza program; rather, it allowed the City to augment its enforcement powers on a case-by-case basis. As the next Part will show, these differences in enforcement are perhaps the most important reason why municipalities turn to covenants despite having the power to zone. Local governments choose to avoid zoning in order to control who may enforce land use restrictions.
III. the procedural difference: governments use covenants to limit citizen enforcement of land use controls
Municipalities use covenants to control the enforceability of land use restrictions in contexts far beyond New York City’s privately owned public spaces, as this Part will show. Litigated cases concerning municipally imposed covenants, as well as the terms of the covenants themselves, reveal this sensitivity to enforcement mechanisms. Those cases and covenants show that municipalities pay close attention to the issue of who may enforce their covenants and guard that prerogative for themselves. Usually, local governments declare their covenants enforceable only by the property owner and the municipality itself, thereby retaining total control over the actual implementation of the land use plan, as the municipality becomes the only party capable of enforcing land use regulations against the developer. In contrast, zoning is broadly enforceable by citizens, giving neighbors the power to compel compliance with land use restrictions. The starkly different enforcement regimes under zoning- and covenant-based land use controls—and municipalities’ explicit efforts to use covenants to limit citizen enforcement—demonstrate that enforcement is often a principal consideration when local governments choose to use one tool or the other.
Generally, affected neighbors may challenge development as non-compliant with zoning. Zoning enabling acts authorize citizen suits both to seek review of administrative action and to directly enforce zoning rules against neighbors.78 Under the doctrine of aggrievement, an analogue of standing, citizens must be specially damaged in some way to bring a challenge under the zoning laws.79 However, the standards for aggrievement tend to be fairly generous to litigants. For example, Maryland considers nearby property owners to be prima facie aggrieved by zoning violations and places the burden of proving the plaintiff not aggrieved on the developer.80 In most states, a person need not be a resident of a particular municipality to challenge its land use decisions, so long as she is adversely affected by them.81 In some cases, citizens can even challenge a zoning decision as taxpayers without showing special damage,82 an action rarely allowed in non-zoning contexts.83 Courts’ willingness to hear a wide range of litigants in zoning disputes reflects a belief that land use is a fundamentally public and participatory concern. As argued by the California Supreme Court, “[C]ommon sense and wise public policy . . . require an opportunity for property owners to be heard before ordinances which substantially affect their property rights are adopted . . . .”84
In contrast to this broadly public enforcement system for zoning, the enforcement regime for municipally imposed covenants is often tightly limited. Municipalities routinely write covenants that forbid citizen enforcement, and the courts routinely enforce those limits. In one New York case, for example, the owner of an affordable housing complex attempted to convert its property to market-rate apartments.85 The residents sued, alleging that the conversion violated a covenant between the owner and New York City requiring the building to remain affordable for forty years.86 Under New York law, the tenants would have had standing to enforce the covenant if it were intended for their benefit.87 Although it might seem that a covenant requiring the property to remain affordable would be intended for the benefit of the very tenants receiving affordable units, the court held that this covenant reflected no such intent. A clause of the covenant “explicitly negate[d] any intent to permit its enforcement by third parties such as plaintiffs.”88 Honoring that clause, the court held that the tenants were not beneficiaries of the covenant and therefore lacked standing to sue.89 By the covenant’s clear terms, only the City could enforce the covenant’s restrictions.
This scenario repeats itself in other cases. Residents of a planned community in Washington, D.C., for example, were deemed merely “incidental beneficiaries” of a series of covenanted promises by the developer, including a promise that the residents would be entitled to purchase stock in the development company.90 The District and the developer had limited enforcement to the District’s redevelopment authority and the federal government in not one but four different sections of their covenant.91 “[N]o person other than a party to the Agreement or a successor or assign, shall have any right to enforce the terms of the Agreement against a party, its successors or assigns,” stated the covenant.92 Here again, the explicit terms of the covenant made promises—whose seemingly sole purpose was to benefit a specific set of residents—unenforceable by those same residents.
Another example from New York City shows the variation that is possible in these covenant provisions limiting enforcement, as well as the high stakes of the litigation surrounding them. In 2014, Greenwich Village residents went to court to try to stop a massive, 1.9-million-square-foot expansion of New York University.93 The plaintiffs argued, among other things, that the City had unlawfully lifted deed restrictions imposed on the properties being redeveloped when they were first built as part of urban renewal.94 However, since those restrictions also included an explicit clause defining who could enforce the covenant, the plaintiffs were denied standing to bring that claim.95 Interestingly, that covenant allowed not only the parties, but also the federal housing commissioner, to enforce its terms.96 In that case, in addition to blocking citizen enforcement, the parties had drafted their covenant to create a novel joint local-federal enforcement system, which matched the local-federal political structure driving urban renewal.97 Covenants can be customized to provide whatever enforcement scheme the parties deem appropriate.
Nor are these examples unique to the context of large-scale urban development. Rather, it is normal professional practice to include clauses limiting citizen enforcement in government-imposed covenants. West Publishing, which provides standardized forms of legal documents intended to serve as the foundation for lawyers drafting their own agreements, includes such a limitation in its standard form for a land disposition agreement between a city and a developer.98 Limiting citizen enforcement is, at least from West’s perspective, a best practice for governments drafting covenants.
The customizability of covenants’ enforcement schemes can be used not only to limit citizen enforcement but also to expand it. Writing in 1954, the then chairman of the Cook County Board of Zoning Appeals described a practice of using covenants to grant residents (of the entire county or some part of it) the power to enforce land use restrictions.99 The Board, in considering an application for a zoning-based land use approval, would require that the applicant impose a covenant on its property.100 Those covenants would “conventionally recite that their terms inure to the benefit of and may be enforced by inhabitants of the county—in some cases, property owners within a specified radius—in which the premises are located.”101 Here, the zoning authority used covenants to allow citizen enforcement beyond what a court might allow under the aggrievement doctrine, as well as to choose whether all residents or only property owners would be given that power. Although today, sixty years later, the government is more likely to use covenants to limit citizen enforcement than to expand it—perhaps due to the refinement of zoning practices over those decades—Cook County’s experience shows that covenants can be employed for either purpose.102
The use of covenants to control citizen enforcement is possible only because the courts do not try to import zoning’s broad standing doctrine into covenant-based systems of land use control. Courts maintain the formalist distinction between covenants and zoning—even though functionally, covenants might contain identical substantive restrictions imposed by identical parties. That distinction reflects courts’ fundamentally different understandings of private and public law. Just as the California Supreme Court saw the broad enforceability of zoning as rooted in the nature of zoning as a fundamentally public concern,103 courts see the enforcement of municipal covenants as fundamentally private, even when zoning and covenants deal with the same issues of land use regulation. Maryland’s Court of Appeals, for example, relied on the private law/public law distinction in denying neighboring landowners standing to challenge an agreement between the City of Baltimore and a private party establishing land use controls for a Baltimore redevelopment project.104 According to the court, the agreement was “not a . . . land use decision with attendant principles extending standing to nearby aggrieved landowners. Generally defined, a land use decision is a decision (typically an ordinance or regulation) enacted or promulgated by a legislative or administrative body.”105 Here, the court formalistically differentiated public and private forms of land use regulation, even though the regulations themselves might have been substantively the same. Without this formalism, local governments could not use covenants to get around zoning’s citizen enforcement mechanisms.
As express contractual clauses, these limitations on citizen enforcement reflect the clear intent of the parties writing them. New York City could have, rather than expressly denying the residents of affordable housing units beneficiary status, expressly declared that they were the beneficiaries of the covenant-based affordability requirement. The City elected to take the opposite approach. Where these clauses exist, municipalities affirmatively prefer controlling enforcement to permitting citizen enforcement or, more precisely, municipalities prefer negotiating for covenants that limit citizen enforcement to negotiating for covenants that allow it.106 Given that municipalities can secure roughly identical substantive land use restrictions through zoning or covenants, this enforcement preference stands out as a distinctively legal, rather than institutional, reason for why municipalities choose covenants over zoning.
Both the substantive overlap between covenants and zoning and the conscious use of covenants to tailor and limit enforcement are captured perfectly by the saga of the Riverside South development along Manhattan’s West Side. The former site of the New York Central Railroad’s rail yards, Riverside South stretches from 59th Street to 72nd Street along the Hudson River, making it one of New York City’s largest recent developments.107 Plans to redevelop the area date back to 1962, when the railroad teamed up with the Amalgamated Lithographer’s Union to propose 12,000 residential units on the site, as well as commercial uses.108 That proposal failed, as did six subsequent plans.109 Community opposition killed many of the development efforts, particularly Donald Trump’s plans to build the world’s tallest building on the site.110 In the early 1990s, though, there was finally a breakthrough. Trump partnered with neighborhood, local and, national civic groups to develop a scaled-down site plan that included neighborhood amenities like parkland.111 Though many neighbors remained livid about the prospect of waterfront development—particularly those whose views would be impeded—the project was ushered through the land use process with relative ease.112
The deal struck to govern the development of Riverside South was extremely complex and required a lengthy series of city approvals.113 Even so, the most important document regulating land use at Riverside South was not the New York City zoning resolution but rather the restrictive covenant signed by Trump.114 That covenant regulates even those aspects of land use most traditionally regulated through zoning: floor area, the building envelope, and the location of retail uses, for example.115 The City could easily have controlled these features of the development through the zoning code; it instead chose to do so through a covenant.
The Riverside South covenant also includes detailed language specifying who may enforce its terms, and how. First, the covenant states that no person other than the landowner, the condo association for Riverside South residents, or the City may enforce the terms of the covenant.116 By including the residents of the project, this covenant allows slightly broader enforcement than some city -imposed covenants—such as the previously mentioned covenant that barred tenants from enforcing its affordability requirements—but still shuts neighbors out of the enforcement process. Second, the covenant expressly allows the City to punish violations of the covenant as if they were zoning violations, by revoking building permits, certificates of occupancy, or special permits.117 In other words, it seems that the City recreated the land use enforcement regime of the zoning code in a covenant and then explicitly modified that regime to eliminate citizen enforcement. This covenant was carefully custom-drafted to cut the West Side’s famously assertive neighborhood activists out of the enforcement process.
The City was right to worry that neighbors would attempt to block even this carefully negotiated deal. A slew of lawsuits attempted to halt development.118 That litigation underscores how important enforcement mechanisms were in the creation of the Riverside South covenant: one of the plaintiffs’ central claims was that the covenant “was illegal because it denied petitioners’ members [sic] enforcement rights.”119 The plaintiffs were thus well aware that the covenant had cut them out of the enforcement process—they identified this feature of the covenant and highlighted it in their lawsuit—and felt that it was worth fighting in court. The project’s opponents lost on that claim at trial, on appeal, and at the state’s high court, which deemed the claim “without merit” without even elaborating.120 Though plaintiffs attempted to bring the Riverside South covenant under zoning’s liberal regime of citizen enforcement,121 the courts were utterly unsympathetic. Indeed, understanding the stakes clearly, the appellate court stated that the intent of the covenant was to place enforcement “in the hands of responsible authorities whose actions will undoubtedly be taken for the benefit of the City and not for the benefit of a favored few.”122 As this litigation shows, the covenant’s drafters, its opponents, and the courts all saw the covenant’s enforcement provisions as factors differentiating the covenant from traditional zoning and as municipal choices of central importance in shaping the future of Riverside South.
As the Riverside South story illustrates, the stakes can be high in the choice between public and private law mechanisms of land use regulation. The City and developer seem to have carefully crafted enforcement mechanisms that disempowered neighborhood opponents in order to protect the project; those same opponents went to court and tried to reinsert themselves in the enforcement process in order to reshape or derail the development. These parties appear to have understood that in the land use context, as in administrative law more generally, citizen suits are powerful tools, offering the promise of greater compliance with important legal protections and the peril of over-enforcement dictated by an unrepresentative few. This Part argues that in the land use context specifically, some citizen enforcement is valuable but that local governments go too far when using covenants to eliminate citizen enforcement entirely. The following discussion calls for greater balance, suggesting that governments use covenants to limit but not foreclose citizen enforcement of land use regulations.
Administrative law scholars have debated the merits of citizen suits at length. On the one hand, citizen suits are seen as effective mechanisms for increasing the enforcement of regulations by deputizing concerned individuals to augment the capacity of often understaffed, and sometimes politically captured, agencies.123 In addition to this primary function, citizen suits can also improve public enforcement of the law by providing competition; preserve public resources by placing the cost of enforcement on private parties; and serve participatory goals by bringing citizens into the enforcement and judicial processes.124 On the other hand, critics worry that citizen suits strip agencies of their control over the enforcement agenda and ability to exercise prosecutorial discretion.125 Unlike an agency, critics argue, single-issue advocates lack the political legitimacy to set enforcement priorities, the ability to balance competing concerns, and the incentive to cooperate with regulated parties.126 Citizen enforcers can also disrupt an agency’s ability to negotiate with regulated parties over compliance: even if the agency promises not to bring an enforcement action, private parties can still do so.127
Both the costs and benefits of citizen enforcement generally can be felt sharply in the land use context. Citizen suits are likely to dramatically increase enforcement of zoning rules. Local governments generally have limited resources, which limits their ability to monitor violations and enforce zoning rules directly.128 In contrast, the immediate neighbors of a property are both well-placed to monitor violations and invested in doing so.129 Accordingly, those protective of property owners’ ability to halt unwanted neighborhood changes have celebrated the liberal aggrievement doctrine in zoning.130 At the same time, citizen enforcement of zoning is likely to validate the concerns of critics. Citizen suits are most likely to come from anti-development homeowners, who are famously litigious in attempting to halt unwanted changes to their neighborhood.131 For controversial projects, using zoning does not merely allow citizen enforcement of land use controls; it all but guarantees such enforcement. Moreover, litigants often proceed from a parochial rather than city-wide perspective and are typically more concerned with stopping development than regulating it.132 In the land use context, therefore, citizen suits are both important mechanisms for augmenting the capacity for public enforcement and potential weapons of NIMBY obstructionism.
Substantively, either over-enforcement or under-enforcement of land use regulations is undesirable. Over-enforcement of land use regulations, along with other forms of local opposition to new development, drives up housing costs, making cities and suburbs alike increasingly unaffordable for moderate-income households, and exacerbates environmentally destructive urban sprawl.133 But while excessive restrictions on development are socially undesirable, some amount of land use planning is widely considered salutary.134 Such planning allows for efficient use of infrastructure, aesthetically cohesive design, community self-determination, and the reduction of local externalities.135 Under-enforcement also opens the door to a bait-and-switch with the public, where governments trade promises that never materialize for popular support.
Limiting citizen enforcement is an understandable response to the threat of over-enforcement in the land use context. Using zoning means that citizen suits will be brought to try to block construction. A municipality hoping to shepherd a desired development through the gauntlet of neighborhood opposition—as is often the case where covenants are used136—behaves sensibly in using private law to deny neighbors the power to enforce land use regulations. But at the same time, denying citizens this power can lead to under-enforcement. In the examples described above, citizens in New York lost their affordable apartments when the City declined to enforce its covenant,137 and citizens in Washington, D.C., lost the right to buy into their community.138 Those municipalities chose not to enforce even the most fundamental restrictions included in the covenants. As a result, the terms of the covenants may have prevented obstructionist litigation, but they also left people without the protections they were owed by developers.
As a policy matter, therefore, municipalities should relax, but not relinquish, their use of covenants to bar citizen enforcement of land use controls. To the extent that local governments are limiting citizen enforcement in order to ward off opportunistic litigation over minor design details or procedural irregularities, covenants offer a welcome tool for governments to fight back against NIMBY-ism. But insofar as land use controls promote important public purposes, strong citizen enforcement is an effective and important tool ensuring those purposes are actually served. Committed community activists with valuable local knowledge should be empowered through citizen suits, even as anti-development NIMBYs are defanged—the challenge is that these may be the same people. Local governments, therefore, ought not use covenants to eliminate citizen enforcement entirely. Rather, citizen enforcement of land use controls should, to the extent possible, be restricted only as far as is necessary to prevent obstructionism.
Luckily, covenants’ private law nature offers the flexibility to perform the necessary tailoring. Covenants’ limits on citizen enforcement are just negotiated terms, and local governments can therefore simply stop including blanket prohibitions on citizen enforcement in their covenants. There are many ways to strike a better balance. Municipally imposed covenants ought to identify certain provisions that can be enforced by directly affected citizens. This kind of tailoring would place enforcement powers in the hands of those intended to derive benefit, ensuring that they receive the land use protections to which they are entitled, while continuing to limit the enforcement powers of self-appointed, obstructionist, anti-development neighbors. These enforcement clauses could be carefully calibrated. A covenant to build a new elementary school on site, for example, could be declared enforceable only by the local PTA, or a covenant to provide affordable housing could be declared enforceable only by tenants of the affordable units. In addition to identifying which citizens are so directly affected that they ought to be given enforcement powers, covenants could identify which of their provisions are appropriate for citizen enforcement. For example, the enforcement of procedural provisions, where violations may or may not meaningfully harm the public, might be reserved for the government, which is better placed to use discretion in deciding whether to bring an action, while substantive restrictions on development might be made enforceable by citizens. Alternatively, local governments can (and sometimes do)139 layer zoning and covenant-based land use restrictions on top of each other. Citizen enforcement is thereby permitted for those terms placed in the zoning code but not for those requirements placed in the covenant. This approach would not allow a city to designate certain directly affected groups as the sole citizen enforcers but has the added benefit that citizens can easily identify the provisions they may enforce by looking at the zoning code. Under either approach, covenants could still be used to limit NIMBY litigation while ensuring that some land use controls will be enforced.
How broadly to allow citizen suits will depend on the particular context of a project: how controversial it is, how litigious the opponents are, how robust the government’s enforcement program is, and the substance of the land use restrictions. And who is directly affected will depend on the restriction in question: while tenants are very directly benefitted by affordability requirements, the beneficiaries of architectural design requirements, for example, are a harder to define group. Nonetheless, for most projects, some balance ought to be struck between complete citizen enforcement and none at all. A middle path between the all-or-nothing citizen enforcement regimes of public and private land use law offers protection for development without sacrificing public accountability.
Of course, local governments choose covenants over zoning for more than a single reason. This Note has emphasized enforcement because local governments consider enforcement to be a matter of central importance, as shown by the close attention paid to it in the covenants put forward by municipalities. Still, other legal differences between covenants and zoning may also drive governments to choose one over the other. A local government’s choice to use covenants might be driven by something as contingent as which bureaucracy is pushing a project. Further, where a local government is trying to block development, covenants might be used to evade constitutional limitations on land use regulation. More importantly, local governments might use covenants to limit the amount of public participation in the planning process, just as they try to limit public enforcement once a project is complete, or to provide land use controls with a different form of permanence. Although this Note presents less empirical evidence that local governments in fact choose covenants for these reasons, these additional differences between zoning and covenants further demonstrate that the two tools of land use regulation are legally distinct, not just institutionally distinct.
At the most basic level, different agencies within a single administration might control the zoning and covenanting processes. For example, it is common for a planning department to control zoning, while an economic development agency controls public land disposition.140 For bureaucratic reasons, each agency might first turn to the land use planning mechanism it controls. Moreover, some local governments have independently elected zoning commissions,141 which may have different policy preferences in addition to different bureaucratic turf. On a case-by-case basis, these organizational divisions may be important in determining whether zoning or covenants are used. However, they do not provide a sufficient answer to the broader question. Where a local government has made a certain project a top priority—as with the New Haven Coliseum site discussed earlier142—mayoral coordination is likely, rendering bureaucratic turf wars less relevant.143 Individual agencies also strategically choose between zoning and covenants to achieve their goals. In New York City, for example, it was a single agency that added covenants to its previously zoning-based system for creating privately operated public spaces.144 Differences that are legal, and not just bureaucratic or institutional, drive these choices to use covenants or zoning.
Similarly, local governments likely sometimes use covenants to evade constitutional limits on regulation, in particular federal and state takings clauses. In the specific case of conservation easements, for example, where a covenant might prohibit all significant development in perpetuity, a government could not constitutionally achieve the same result by regulation without paying just compensation.145 When local governments are attempting to limit development significantly, therefore, they have a strong incentive to use covenants, if possible, to avoid takings issues.146 Relatedly, most zoning codes avoid imposing regulatory takings by allowing landowners to receive variances—exemptions or permitted deviations from the applicable zoning requirements—when zoning proves to be a hardship.147 The variance process thereby limits, to some extent, local governments’ ability to impose unusually harsh land use restrictions. In contrast, hardships only lead to loosened restrictions in covenants in limited circumstances.148 When imposing onerous land use restrictions, therefore, governments have reason to disfavor zoning: the covenant is more likely to stick. But as with bureaucratic explanations, these constitutional issues are insufficient to explain most choices to use covenants. Regulatory takings and variances are concerns where the government is trying to stifle growth, but municipalities generally use covenants to govern projects that they hope to help move forward.149 To the extent that a local government is promoting a development and giving the developer what it needs to succeed and profit, land use regulations are extremely unlikely to fail the Penn Central balancing test for regulatory takings.150 For these favored projects where covenants are commonly used, governments’ choices to do so are much better explained by a desire to limit citizen enforcement, which can be a costly impediment to development.
Two additional factors, however, may drive municipalities to use covenants to regulate land use rather than zoning. First, using covenants may allow a local government to limit public participation in the planning process. The degree of public participation is not inherent to the legal forms: regulatory decisions can be made in backroom deals,151 and municipalities may seek out broad public input in designing covenants.152 Nevertheless, the Standard Zoning Enabling Act, which was broadly adopted across the country and governs the exercise of most local zoning powers,153 requires a public hearing before zoning regulations may be enacted.154 In contrast, statutes authorizing local governments to convey real property—one important source of local governments’ power to impose covenants—generally do not include such hearing requirements.155 Accordingly, the zoning process is more likely to include broad public participation than would a covenant negotiation. Indeed, participatory democratic values often trump legalistic ones in the zoning process.156
For local governments, public participation in the land use process is a double-edged sword. On the one hand, public participation allows governments to harness local information at the neighborhood level—information that may be impossible for a centralized bureaucracy to gather or process on its own.157 On the other hand, homeowners resistant to any change in their neighborhood—even changes unlikely to have any negative effect158—routinely dominate public hearings and are often successful in demonstrating enough opposition to defeat unwanted projects.159 From this perspective, public participation provides both an opportunity for better development and for unrepresentative obstructionism.
Where a government wants a project to succeed, therefore, the participatory nature of the zoning process may push a local government to use covenants to regulate land use. The century-long debate over whether more or less public participation is a good thing for land use planning is beyond the scope of this Note.160 Suffice it to say that the turn to covenant-based regulation reflects municipal attempts to limit the power of citizens in development politics in two different ways. As public law, zoning brings citizens into the land use process at both the planning stage, through hearings and other participatory mechanisms, and at the enforcement stage, through citizen suits for aggrieved neighbors. As private law, covenants can be used to push citizens out of the land use process at each of those stages. Covenants give governments the capacity to calibrate the balance of power between citizens and public officials over the entire lifetime of a development project.
A second difference between zoning and covenants is their permanence. Although less present than enforcement concerns in the text of government imposed covenants or the case law concerning them, permanence is a deep doctrinal distinction. On the one hand, statutes can last forever. Unless repealed, a zoning ordinance will remain binding in perpetuity, since courts generally cannot sunset outdated laws.161 In contrast, most covenants will prove less long-lasting. First, courts are less likely to treat a covenant that does not sunset as running with the land, meaning that as property changes hands over time, covenants made in perpetuity may become unenforceable.162 Second, courts will not enforce a covenant if changed conditions have rendered it obsolete.163 Zoning, therefore, is potentially a much longer-lasting restriction on development.
Then again, a zoning ordinance is far easier to amend than a covenant, giving covenants a different kind of permanence.164 The local government may unilaterally rezone land, while the renegotiation of a covenant requires the consent of all parties.165 A subsequent rezoning will not affect a developer that has vested its rights, for example by obtaining building permits or starting construction,166 but zoning still creates more regulatory risk for the landowner than does a covenant-based system of land use controls. Given the value of certainty and predictability in real estate development, developers may demand covenants, rather than zoning regulations, and local governments may want to give them that certainty.
These issues of permanence implicate deep institutional questions: when should political change be allowed to affect deals struck by a previous administration? What is the relative competence of legislatures and judges in determining when a land use restriction is obsolete? Given the stakes of these issues, permanence and amendment likely affect the municipal choice of land use control. These questions of who controls land use policy, present or future officials, also intersect with the existing scholarship on zoning and covenants. As discussed earlier, this scholarship focuses on who enacts each form of regulation but only examines the issue at a particular moment in time.167 Further inquiry into the differences between covenants and zoning, and particularly governmental use of covenants, should examine how questions of permanence affect municipal decision making and how they interact with the enforcement concerns identified in this Note.
Although covenants are most commonly used as land use controls by private parties, municipal governments routinely supplement their zoning power with covenants. Covenants are not merely the private equivalent of zoning, therefore, but also a meaningfully different legal tool. The difference between the two forms of regulation does not lie in the substantive restrictions each can contain. Zoning is now sufficiently flexible and discretionary that it can impose the same substantive limits on development that covenants can. Rather, a primary distinction between zoning and covenants is the nature of the party empowered to enforce them. Zoning ordinances are broadly enforceable by aggrieved citizens. In contrast, local governments use covenants to limit citizen enforcement and reserve enforcement power for themselves, with the goal of protecting development from litigious neighbors. By using covenants, local governments can avoid public law norms of participation and accountability, and they can opt into a private law system where everything, including enforcement regimes, can be customized. While the ability to limit enforcement of covenants is not the only distinction between the two forms of land use control—in particular, zoning tends to allow for greater public participation and different forms of amendment—it is one that local governments actively embrace. In this way, covenants are not merely the equivalent of zoning for private parties. Their private law origins remain doctrinally and practically significant.