Changes to Wisconsin’s Conditional Use Permits May Warrant Revisions To Zoning Ordinances

Without much fanfare or public attention, the Wisconsin legislature recently enacted 2017 Wisconsin Act 67.  One component of this legislation was to create and amend statutes pertaining to conditional use permits (CUPs) at the county, town and city levels.  Given the changes to Wisconsin law in this regard, which became effective November 28, 2017, it may necessitate local governments updating, or wholesale revising, their zoning ordinances.  Such revisions may be appropriate to: (1) ensure the ordinances comply with Wisconsin law; (2) try and retain, to the extent still possible, some discretion over the granting of CUPs; and (3) ensure that the conditional uses listed in the ordinance are still acceptable in light of the possibility of some loss of control and discretion as to where and when these may occur.

CUPs (or sometimes referred to as special use exceptions) are permits which local governments, typically through a Board of Adjustment (BOA) or other similar boards or committees, issue to landowners who desire to use their property in a fashion that is listed as a conditional use under the zoning ordinance.  Typically, a zoning district will have several conditional uses, in addition to permitted uses and prohibited uses, with the notion that, in certain circumstances and with certain conditions imposed, a conditional use may sometimes be in the best interest of the zoning district.

The Wisconsin legislature passed 2017 Wisconsin Act 67 as a means of lessening the discretion and control local governments have over CUPs.  The new legislation was a reaction to the Wisconsin Supreme Court’s 2017 decision in AllEnergy v. Trempealeau County, 2017 WI 52, 375 Wis. 2d 329, 895 N.W.2d 368, in which the Supreme Court arrived at a conclusion that effectively was much the opposite of the new legislation.  Under this new legislation, there are several very important provisions which could significantly impact a local government’s conditional uses.

First, the statute provides that “if an applicant for a conditional use permit meets or agrees to meet all of the requirements and conditions specified in the county ordinance or those imposed by the county zoning board, the county shall grant the conditional use permit.”  Wis. Stat. §59.69(5e)(b)(1) (emphasis added).  Similar provisions were added to Wisconsin Statutes Chapters 60 and 62 as to towns and cities.  This is in direct response to the holding by the Wisconsin Supreme Court in AllEnergy that rejected a proposed rule that “where a [CUP] applicant has shown that all conditions and standards, both by ordinance and as devised by the zoning committee, have been or will be met, the applicant is entitled to the issuance of a permit.”  AllEnergy, 2017 WI 52 at ¶119.  Depending on how a local government’s zoning ordinance is drafted, it may be very easy for an applicant to guarantee the granting of their own CUP.

An applicant likely could not preempt the entire CUP process by simply promising compliance at the point of application.  After all, the statute also specifies that the local government “shall hold a public hearing on the application” and the local government zoning board can impose additional requirements or conditions which are based on substantial evidence after the public hearing and before granting a permit.  However, so long as the applicant agrees to abide by all the requirements and conditions, it does not appear that there is any discretion left for the BOA to exercise in whether to grant the CUP.

Second, what qualifies as substantial evidence – the information an administrative body is allowed to rely on in reaching its decision – is now defined by statute instead of case law.  “Substantial evidence means facts and information, other than merely personal preferences or speculation, directly pertaining to the requirements and conditions an applicant must meet to obtain a conditional use permit and that reasonable persons would accept in support of a conclusion.”  Wis. Stat. §59.69(5e)(a)(2).

While not entirely dissimilar to what most believed was the substantial evidence test before, see AllEnergy, 2017 WI 52 at ¶ 76, it is clear that the change was enacted to try and limit the type of information a BOA can rely on in deciding whether to grant a CUP.  It must not only be facts and information instead of personal preferences or speculation, but those facts and information must “directly pertain” to the requirements and conditions in the zoning ordinance.  Thus, a local government would be well served to specifically list out any and all requirements in the ordinance so that the BOA is empowered to rely on substantial evidence which directly pertains to them.  An incomplete, vague or nebulous ordinance may severely hamper a BOA and the substantial evidence it can rely on.

An interesting dilemma arises as to the bar on “speculation” as substantial evidence.  By their very nature, CUPs deal with uses that are not yet occurring.  Thus, the impacts and effects of that use are obviously not known when the CUP is applied for.  Inherently, both the applicant and those who may oppose a certain conditional use are speculating about what will occur once the use is established.  Therefore, would a local government be barred from considering testimony from residents that the proposed use is likely to result in a decrease of their property value?  That smacks of “personal preference and speculation,” not “facts and information.”  Or could those opposing a CUP speculate about the likely effects of a sand mine based on what has occurred at other mine sites?  It would seem like an argument could be made that such does not constitute substantial evidence despite this being information routinely relied on by BOAs in the past.  One way around this would be to remove it from the realm of speculation and into the realm of facts and information by using expert testimony on such issues.  However, it is questionable whether groups opposing a CUP, which usually consists of a few surrounding landowners, would have the necessary resources to hire experts to testify before the BOA on such issues.

Third, the new legislation states that the requirements and conditions in the ordinance “must be reasonable and, to the extent practicable, measurable and may include conditions such as the permit’s duration, transfer or renewal.”  Wis. Stat. §59.69(5e)(b)(2).  Further, that any “conditions imposed must be related to the purpose of the ordinance and be based on substantial evidence.”  Wis. Stat. §59.69(5e)(b)(1).  Taking these last two portions together, any conditions or requirements must be reasonable, must be measurable (if practical), must be related to the purpose of the ordinance and, conditions imposed must be based on substantial evidence.

This change was enacted to tie the hands and limit the discretion of local governments in regards to conditional use permits.  The language of the new legislation is vague enough that some current, well-drafted zoning ordinances may not violate this statute outright.  However, one can easily envision in the near future an applicant challenging a CUP denial where the BOA relied on some rather nebulous standards that the local government did not even attempt to make measurable.  The statute would give such an argument additional credence that it did not have previously.

This also calls into question the validity of zoning ordinances which list pre-determined conditions to be imposed on conditional uses that are granted.  Some ordinances require conditions (such as hours of operation, light control, noise reduction, etc.) to be imposed on any CUP which is issued in a certain zoning district.  However, if any conditions imposed must be based on substantial evidence – and that would be substantial evidence received at public hearing – then pre-determined conditions may not be permissible unless it just so happens that substantial evidence is offered at the hearing to support each of the conditions.

If a local government is concerned about conditional uses and their discretion being curtailed by the state legislature, it would seem that revisions to the zoning ordinance are advisable.  For example, if there are conditional uses that a local government does not want to risk an applicant could effectively guarantee themselves, then they should remove such conditional uses from the zoning ordinance entirely and simply stick primarily with permitted or prohibited uses.  In other words, unless a local government is actually willing to have a use in a certain district – and without perhaps much control over when and where it happens – then it best be removed as a conditional use from that zoning district.  Many local governments, when drafting their zoning ordinances, tend to list various conditional uses with the belief that they will be able to tightly control whether that use is actually approved or not.  These legislative changes make that control much less of a certainty and justify severely limiting what uses are listed as conditional in each zoning district.

In addition, local governments will want to closely examine their zoning ordinance and the standards and requirements listed in the ordinance.  As stated above, they need to be reasonable, related to the purpose of the ordinance and, if practical, measurable.  Thus, general statements and nebulous notions will likely be subject to legal challenge to determine whether the local government has made any effort to make the standards measurable where practical.  For example, can a zoning ordinance still provide that the proposed use cannot “be contrary to the public interest” when the local government has made no attempt at all to try and quantify or make such standards measurable?

The new legislation is likely to lead to significant amounts of litigation over the coming years in which courts will attempt to provide further guidance and clarity to the new law.  However, until that time the new legislation has definitely created more questions than answers.  Local governments would be well served to examine their zoning ordinances to determine whether they can provide any more certainty and protection to the CUP process in response to this new legislation.

If you have any questions regarding this article, please contact an attorney at Mallery & Zimmerman.