United States: Pennsylvania Supreme Court Decides On The Standard For Granting A Use Variance

Very few zoning cases go before the Pennsylvania Supreme Court (the Supreme Court) since it only accepts a limited number of appeals that it believes are important to review.  However, the Supreme Court previously granted a Petition for Allowance of Appeal filed by the Archdiocese of Philadelphia (the Archdiocese) in connection with its request for a use variance. On July 21, 2014, the Supreme Court issued a decision in Marshall v. City of Philadelphia, 2014 WL 3579694 (PA) reversing the Commonwealth Court's decision regarding the standard for granting use variances.   

In Marshall, the Archdiocese owned property located at 3255 Belgrade Street in the City and County of Philadelphia (the Property). The Property is zoned R-10A and contains a three-story building that was used as an elementary school from 1917 until 2008. In 2009, the Archdiocese proposed to convert the existing building into a 63-unit apartment building for low-income senior citizens and received funding for the project from the U.S. Department of Housing and Urban Development (HUD). 

In 2010, the Archdiocese filed a Zoning/Use Registration Application with the City of Philadelphia Department of Licenses & Inspections (L&I) requesting a permit to construct a four-story addition to the existing building and use it for multi-family housing. L&I refused the application for the following reasons: (1) multi-family housing is not permitted in the R-10A zoning district; (2) the proposed parking did not meet the required number, size or landscaping requirements; (3) the rear yard depth and area, and the side yard depth, did not meet the minimum requirement; and (4) the height and number of stories of the proposed addition exceeded the maximum permitted. The Archdiocese filed an appeal to the Zoning Board of Adjustment (the ZBA).  

At the hearing before the ZBA, Gloria Marshall (Marshall) opposed the proposed project and the relief being sought. The ZBA granted the variances requested. Marshall appealed the ZBA's decision to the Court of Common Pleas of Philadelphia (the Trial Court) arguing that the Archdiocese failed to demonstrate the requisite hardship to establish the need for either the use or the dimensional variances. The Trial Court affirmed the ZBA's decision, which Marshall appealed to the Commonwealth Court of Pennsylvania (the Commonwealth Court). The Commonwealth Court reversed the Trial Court's decision. 

The Archdiocese filed a Petition for Allowance of Appeal to the Supreme Court appealing the Commonwealth Court's decision. The Supreme Court granted the Petition, however, it limited its review to the issue of whether the Commonwealth Court plainly misapplied the applicable standard of review, given the substantial public importance of, and pressing public need for, the project for which zoning relief was properly awarded, where the Court's reversal of the well-supported zoning relief threatens completion of the project due to potential loss of substantial and necessary federal funding. 

In reversing the ZBA's decision, the Commonwealth Court relied on case law that "in order to meet the burden necessary to obtain a use variance, a property owner must demonstrate that the entire building is functionally obsolete for any purpose other than one not permitted under the relevant zoning ordinance." The Supreme Court rejected this finding and concluded that the Commonwealth Court erred by relying on an improper standard for unnecessary hardship and by substituting its judgment for that of the ZBA, thereby applying an incorrect standard of review. 

The Supreme Court stated that the Commonwealth Court's "functionally obsolete" standard is merely a reiteration of the "practically valueless" standard, which is a standard for unnecessary hardship that the Supreme Court has repeatedly and explicitly rejected. In reversing the Commonwealth Court's decision, the Supreme Court relied on its prior holding in O'Neill that a "zoning board's discretion is not so circumscribed as to require a property owner to reconstruct a building to a conforming use regardless of the financial burden that would be incident thereto, especially ... where the change sought is from one nonconforming use that will not adversely affect but better the neighborhood." 

In this case, the Supreme Court recognized that the Archdiocese was awarded a grant of nearly $10 million from HUD's Supportive Housing for the Elderly program to fund the renovation of a building from one nonconforming use to another more desirable nonconforming use that would benefit the community. It also relied on the ZBA's finding that the Property can better serve the needs of the community as low income housing for seniors, that the proposed use of the property would be less burdensome on the community than the prior use, and that the proposed development of the Property will transform a vacant building and provide a new use to serving community members. Based on these findings, the Supreme Court held that the ZBA acted well within its discretion in concluding that the Archdiocese established unnecessary hardship and in granting the variance for conversion of the property to low-income senior housing. The Supreme Court's decision appears to focus on the fact that the proposed nonconforming use will benefit the community more than the prior nonconforming use and relies on some public interest in the need for the proposed use in upholding the grant of the use variance.

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