Opinion
Argued May 5, 1981
Decided June 16, 1981
Appeal from the Appellate Division of the Supreme Court in the Fourth Judicial Department, EDWARD F. McLAUGHLIN, J.
John C. Setright for appellants.
James F. Dwyer for Village Board of Village of Fayetteville, respondent.
Dispositive on this appeal is the well-established rule that a landowner who seeks a use variance must demonstrate factually, by dollars and cents proof, an inability to realize a reasonable return under existing permissible uses. Without such evidence, a grant of a use variance by a zoning board is not justified.
Respondent, Ronald Cosser, applied to the Zoning Board of Appeals of the Village of Fayetteville for permission to conduct commercial activity on his residentially zoned land. In support of the application respondent produced the testimony of an architect who indicated that residential construction on the parcel would entail certain special costs and was therefore not competitively feasible. The architect did not specify the amount of added expenses, the total cost of construction, or for that matter render an opinion as to market value in the area. A real estate broker testified that the additional construction costs would make a house on the subject parcel competitively unsaleable. Again, the witness offered no concrete estimate of construction costs and no evidence of competitive value of other residences. Finally, another witness for respondent voiced his opinion that it would be inadvisable to use the land for residential development. No evidence was introduced as to the purchase price of the land or its current value. Based on this record, the zoning board found that it would be "economically unfeasible to build and attempt to sell a residential dwelling on the lot in question" and granted a use variance.
Petitioner commenced this proceeding to invalidate the board's action. Special Term upheld the determination, but a unanimous Appellate Division reversed. The order of the Appellate Division should be affirmed.
It should be noted, at the outset, that respondent sought a variance for a prohibited use and not merely exemption from an area restriction. An applicant for a use variance bears a heavier burden of proof than one who desires relaxation of an area limitation (e.g., Matter of Consolidated Edison Co. of N.Y. v Hoffman, 43 N.Y.2d 598, 606-607) and our discussion here relates only to that more stringent standard.
Boards of zoning appeals have traditionally been empowered to grant variances from strict application of zoning ordinances. Although the board possesses discretion to grant or withhold a variance, this court, in early zoning cases, established the minimum showing necessary before that discretion could be exercised. In Matter of Otto v Steinhilber ( 282 N.Y. 71, 76), the court articulated the classic "unnecessary hardship" test governing grant of use variances: "Before the Board may exercise its discretion and grant a variance upon the ground of unnecssary hardship, the record must show that (1) the land in question cannot yield a reasonable return if used only for a purpose allowed in that zone; (2) that the plight of the owner is due to unique circumstances and not to the general conditions in the neighborhood which may reflect the unreasonableness of the zoning ordinance itself; and (3) that the use to be authorized by the variannce will not alter the essential character of the locality." Because the landowner in Otto failed to demonstrate his inability to realize a reasonable return on the property as zoned, the board's grant of a use variance was annulled.
It is obvious that, "before a claim that a property is yielding less than a reasonable return may properly be interposed, the reasonable return for the property must first be known or at least be ascertainable" (Matter of Crossroads Recreation v Broz, 4 N.Y.2d 39, 45). Thus, we have required proof, in dollars and cents form, of all matters bearing upon the return available under existing zoning (e.g., id., at pp 44-46; see Matter of Young Women's Hebrew Assn. v Board of Stds. Appeals of City of N Y, 266 N.Y. 270, 275; 2 Anderson, New York Zoning Law and Practice, § 18.12; 3 Rathkopf, Zoning and Planning, § 38.03). And, the dollars and cents evidence must show that no permissible use will yield a reasonable return (e.g., Matter of Forrest v Evershed, 7 N.Y.2d 256, 263; Matter of Young Women's Hebrew Assn. v Board of Stds. Appeals of City of N.Y., 266 N.Y. 270, 275, supra; 3 Rathkopf, Zoning and Planning, § 38.03).
Where permissible uses include public ones, the applicant is generally not required to show the property unsuitable for such uses (Matter of Grimpel Assoc. v. Cohalan, 41 N.Y.2d 431, 433-434).
The dollars and cents rule is a familiar one, regularly applied in cases where a zoning ordinance is alleged to be unconstitutionally confiscatory (e.g., Spears v Berle, 48 N.Y.2d 254; Matter of National Merritt v Weist, 41 N.Y.2d 438, 445-446). Indeed, it has been said that the hardship needed to show entitlement to a use variance and the proof needed to demonstrate an ordinance is confiscatory are much the same (e.g., Williams v Town of Oyster Bay, 32 N.Y.2d 78, 81; 3 Rathkopf, Zoning and Planning, § 38.03, at p 38-26). What is little known, however, is that the rule evolved, not out of the confiscation cases, but rather from the decisions involving variances. Thus, in Williams v Town of Oyster Bay ( 32 N.Y.2d 78, 81, supra) the court expressly applied by analogy the variance rule to claims of alleged confiscation.
The similarity of the two rules has created confusion, leading some to contend that dollars and cents proof of hardship is required only where a zoning board denies a variance. Under this view, the two standards would be commingled and denial of a variance would be annulled where the landowner showed that he could not receive a reasonable return under any permissible use — i.e. that because of the unique nature of the particular parcel, the current zoning is confiscatory. By contrast, the zoning board would be permitted to grant a variance on some lesser showing.
Our decisions, however, evince a fundamental desire to limit "the power of the board of zoning appeals to grant variances" (2 Anderson, New York Zoning Law and Practice, § 18.06, p 12). As early as 1927, CARDOZO warned, in the course of an opinion annulling the grant of a variance, that "[t]here has been confided to the Board a delicate jurisdiction and one easily abused * * * judicial review would be reduced to an empty form if the requirement were relaxed that in the return of the proceedings the hardship and its occasion must be exhibited fully and at large" (People ex rel. Fordham Manor Reformed Church v Walsh, 244 N.Y. 280, 290).
From the earliest days this court has annulled grants of use variances where the record failed to disclose concrete proof that the landowner could not realize a reasonable return without the exemption (e.g., Matter of Clark v Board of Zoning Appeals of Town of Hempstead, 301 N.Y. 86, 90; Matter of Otto v Steinhilber, 282 N.Y. 71, supra; Matter of Levy v Board of Stds. Appeals of City of N.Y., 267 N.Y. 347; Matter of Young Women's Hebrew Assn. v Board of Stds. Appeals of City of N.Y., 266 N.Y. 270, supra; People ex rel. Fordham Manor Reformed Church v Walsh, 244 N.Y. 280, supra). And, this court has consistently rejected as insufficient to justify a grant of a use variance the bare conclusory testimony of witnesses that the property could not yield a reasonable return (e.g., Matter of Forrest v Evershed, 7 N.Y.2d 256, 261-262, supra [testimony of real estate broker that property was unsaleable]; Matter of Clark v Board of Zoning Appeals of Town of Hempstead, 301 N.Y. 86, 90, supra [testimony of real estate broker that property could not produce a reasonable return as zoned]; cf. Spears v Berle, 48 N.Y.2d 254, 263-264, supra [bare conclusory testimony does not establish lack of reasonable return to support allegation of confiscation]). In short, the court has established general rules governing the granting of variances to ensure that actions of zoning officials do not impair or subvert the public interest. Compliance with these rules is necessary for the granting of a variance to withstand judicial review.
Absent a uniform and rigorous standard, it is apparent that even a well-intentioned zoning board "by piecemeal exemption which ultimately changes the character of the neighborhood * * * [may create] far greater hardships than that which a variance may alleviate" (Matter of Otto v Steinhilber, 282 N.Y. 71, 77-78, supra). Unjustified variances likewise may destroy or diminish the value of nearby property and adversely affect those who obtained "residences in reliance upon the design of the zoning ordinance" (id., at p 78). These evils, not unlike those associated with the universally condemned practice of spot zoning, have been zealously guarded against by this court.
One commentator has noted that, even where zoning legislation confers broad power to permit variances, the courts have "moved quickly to find strict limitations" (2 Anderson, New York Zoning Law and Practice, § 18.07, p 13). That same authority examined 200 decisions involving judicial review in variance cases and found that "65 percent of the variances granted by boards were reversed by the courts [while] [o]nly 25 percent of the board denials were reversed" (id., § 18.06, p 12).
On the present record, therefore, it must be concluded that the facts adduced at the hearing did not justify the grant of a use variance. The conclusory testimony of the witnesses, unsupported and unsupplemented by underlying concrete facts in dollars and cents form, provides no basis for the board or the courts to evaluate whether the property at issue is being subjected to unnecessary hardship. Indeed, even the dissenting opinion points to no fact on the record that demonstrates the inability of the landowner to realize a reasonable return. While the dissenting opinion notes that the parcel is sloped and will require special preparation for residential development, it does not and cannot specify the extra cost of the preparation, the potential value of a house on the site, the cost of the property and other such information. Without this proof, it is simply impossible to say, other than by pure speculation, whether residential development will or will not yield a reasonable return. Thus, the dissent's inability to adduce facts on the record in support of its ultimate conclusion illustrates the wisdom and logical necessity of the dollars and cents rule in these circumstances.
Accordingly, the order of the Appellate Division should be affirmed, with costs.
The majority, by insisting on a particular kind of evidence without regard to the substantiality of the evidence presented or what it tends to prove, departs from the settled rule that once it appears that a zoning board decision is supported by substantial evidence, the court's function is at an end. Zoning board members are not expected to be theoreticians or doctrinaire specialists, but rather are representative citizens acting in the community interest through commonsense accommodations of conflicting community pressures (see Matter of Lemir Realty Corp. v Larkin, 11 N.Y.2d 20; Matter of Von Kohorn v Morrell, 9 N.Y.2d 27). For this reason, where a landowner seeking a variance attempts to show to the municipal body that without it he cannot obtain a reasonable return on his property, there is no need to impose rigid and technical constraints on the type of acceptable proof. To do so denigrates the local municipal body's expertness and familiarity with local conditions.
It has never been the law that there must invariably be a submission of "dollars and cents proof" to support the grant of a variance, and the facts of this case clearly demonstrate that without it evidence of a different character can meet the traditional standard of reasonableness sufficient to require affirmance of the board's determination. In essence it is for the municipal body, within bounds of rationality, to determine the form and type of evidence on which it may properly base its determination. Although it was not obliged to do so, in this instance the Board of Zoning Appeals found the proof submitted sufficiently reliable and creditworthy to provide a premise for its determination.
The respondent sought to obtain a use variance permitting the operation of a small furniture refinishing and upholstering business in a residentially zoned area. The application was made before the Zoning Board of Appeals for the Village of Fayetteville which, after a hearing, concluded that a variance was appropriate under the circumstances.
Respondent proposed to render the parcel in question suitable for this limited "cottage industry" use by renovating a deteriorating century-old barn existing on the land. The board, after considering extensive testimony on the matter, expressly found that: "The barn is of historical significance as it pertains to the agricultural and trade [route] origins of the Village. Preservation of the barn is consistent with the public interest. The barn is presently in poor repair and in need of extensive rehabilitation."
Respondent proposed to repair the barn in accordance with an architect's model submitted to the board, with a view towards maintaining the exterior character of the structure and without altering its exterior dimensions.
The board additionally found that: "Strict application of the zoning requirements of the Fayetteville Code would result in unnecessary hardship. Under the applicable zoning restrictions and other requirements of law, no reasonable use may be made of this parcel. It is economically unfeasible to renovate and remodel the barn to put it in compliance with the law for a permitted residential use. Demolition of the barn should not be required and is undesirable; even if that were done, it would be economically unfeasible to develop the parcel for a permitted residential use and would not produce a saleable property".
The conclusions of the board were based on expert testimony, which the board credited, indicating that the slope of the parcel is "exceptionally steep" and that much of the parcel is burdened with a high water table. A stream ran along the rear property line which, due to the topography, created a danger of overflow several times yearly. Additionally, respondent produced uncontradicted testimony that to alleviate this problem tremendous amounts of fill, which would be prohibitively expensive, would be required and that the necessary additional construction costs would make the property competitively unsaleable. Despite this evidence, and the clearly permissible inferences to be drawn from it, the village board of trustees, respondent before us, would nullify the action of the Board of Zoning Appeals by exalting the "dollars and cents" language of Matter of Crossroads Recreation v Broz ( 4 N.Y.2d 39), torturing it out of context and applying it in a manner which was never intended.
It is to be noted that the "dollar and cents" formulation (on which text writers have subsequently fastened) was used by our court in a case in which the board had determined that the proof submitted was not sufficient to justify granting the variance and in which we wrote to sustain the board's determination; we were not there addressing a situation in which, as here, the board had found the evidence submitted acceptable for its purposes. We similarly upheld a zoning board's denial of an application for a variance in Matter of National Merritt v Weist ( 41 N.Y.2d 438, 446).
The classic articulation of the unnecessary hardship test governing the grant of use variances was set forth in Matter of Otto v Steinhilber ( 282 N.Y. 71) where the court required that the record show that (1) the land in question cannot yield a reasonable return as zoned; (2) that the plight of the owner is due to the unique circumstances of the land; and (3) that the use under a variance would not alter the essential character of the locality.
On all three of these points, the proof was more than sufficient. However, it is the proof of the ability of the landowner to obtain a reasonable return which the majority would find legally deficient through a rigid insistence on submission of numerical financial data. In doing so it unwisely limits the character of permissible evidence and fails to focus on what is required to be proved and that which the evidence which was introduced in fact served to prove.
It is apparent from the record before the board that this vacant barn on otherwise vacant land was not yielding a reasonable return as residential property. It is equally apparent that the board could reasonably conclude that the cost of huge amounts of fill required to transform this lot into suitable residential property would be prohibitively high. Of course, for purposes of our review, the proof need only supply substantial evidence and a rational basis for the decision to grant the variance.
In Matter of Crossroads Recreation v Broz ( 4 N.Y.2d 39, supra) both the procedural posture and the facts were entirely different; we held that in the absence of explicit countervailing financial proof there was no warrant for judicial disturbance of the board's determination. The owner of a service station who sought a variance to permit an increase in his nonconforming use attempted to support his position by conclusory allegations that the still operating station could not longer "face the competition". But no economic data was offered to show the required return on the property or to demonstrate that without the variance the ongoing business was a losing proposition. The denial of a variance by the board was there sustained because in that specific economic context — certainly not in all foreseeable contexts — the failure to provide dollars and cents proof rendered the record "entirely devoid" of any basis for measuring a reasonable return (Matter of Crossroads Recreation v Broz, supra, at p 45). There is no indication or justification to be derived from that opinion that the dollars and cents requirement was, as the majority now supposes, intended to be enshrined as "a uniform and rigorous standard".
In this area of diverse fact situations and local expertness it must be recognized that workable rigorous standards are rare. Indeed, even those standards imposed by statute (see Village Law, § 7-712, subd 2, par [c]) are intended to permit the board a maximum of discretion (2 Anderson, New York Zoning Law and Practice, § 18.06). That discretion should be no less applicable or constrained where a board determines that a considerable quantity of nonconclusive proof may fairly prove a point (cf. Matter of Forrest v Evershed, 7 N.Y.2d 256; Matter of Clark v Board of Zoning Appeals of Town of Hempstead, 301 N.Y. 86). The inability of an owner to obtain a reasonable return on his property can logically be shown in more than one way, and if the manner of proof is reliable and acceptable to the local body, the courts should not automatically intrude to insist on an even higher standard of evidence.
Finally, it should be noted that the majority has equated the failure to abide by its novel technical requirement with an attempted piecemeal destruction of the rural character of the community. In fact, as the record clearly demonstrates, the board was seeking to do the opposite by providing a dispensation permitting a use tailored to a valuable existing structure. This is precisely within the function of a variance; this court should not interfere.
Accordingly, the order of the Appellate Division should be reversed, with costs, and the determination of the Zoning Board of Appeals reinstated.
Judges JASEN, GABRIELLI and FUCHSBERG concur with Chief Judge COOKE; Judge WACHTLER dissents and votes to reverse in a separate opinion in which Judges JONES and MEYER concur.
Order affirmed.