New Hampshire Municipal Association
New Hampshire Municipal Association

Court Update

Zoning Prohibition of Halfway Houses May Be Invalid; Court Revises ‘Intermediate Scrutiny’ Test

Community Resources for Justice, Inc. v. City of Manchester
No. 2006-609, 1/24/2007

This case involved the City of Manchester’s zoning ordinance, which does not permit “correctional facilities” in any zoning district. Community Resources for Justice, Inc. (CRJ) sought approval to use property it owned in the city to operate a halfway house under a contract with the Federal Bureau of Prisons. CRJ’s application for a variance was denied by the zoning board of adjustment because CRJ had not met the requirements to prove that denial would constitute an “unnecessary hardship.” After a complex appeal process, the Supreme Court sent the matter back to the trial court for further proceedings. Although the ultimate result in this case will not be known until that process is complete, the Court’s opinion on this appeal contains two important holdings with implications for all municipal zoning ordinances.

One holding addressed CRJ’s claim that the city’s prohibition of halfway houses violated CRJ’s right to equal protection under the state constitution. In an equal protection challenge, the plaintiff argues that the government has impermissibly established classifications of citizens and therefore has treated similarly situated individuals differently. In this case, the city’s zoning ordinance identified halfway houses and other private correctional facilities as a special class of business and treated them differently than all other kinds of businesses.

The Court noted that this case involved the right to use and enjoy property, which it considers an “important substantive right.” When that kind of individual right is involved, the Court uses the “intermediate scrutiny test” to see whether or not the government has violated the individual’s rights. Since 1980, this test required that challenged legislation be “reasonable, not arbitrary, and rest upon some ground of difference having a fair and substantial relation to the object of the legislation.” See Carson v. Maurer, 120 N.H. 925 (1980). Under this original test, the legislation was presumed to be valid and the burden was on the party who challenged the legislation to overcome that presumption. See Buskey v. Town of Hanover, 133 N.H. 318 (1990).

However, the Court then explained that the intermediate scrutiny test as used in New Hampshire was no longer correct. The Court always intended to use the same test that is used under the U.S. Constitution, but that test had evolved over time and the New Hampshire test had not. Therefore, the Court overruled the previous cases and articulated a new standard to be used instead. Under this new standard, intermediate scrutiny under the state constitution requires the challenged legislation to be substantially related to an important governmental objective. The burden to demonstrate that the challenged legislation meets this test rests with the government (in this case, the city). To meet this burden, the government may not rely upon justifications that are hypothesized or “invented post hoc in response to litigation,” nor upon “overbroad generalizations.”

The Court has remanded the case to the trial court to review using this new standard. Although we do not yet know the outcome of that case, it is clear from this opinion that equal protection challenges to local zoning ordinances will now be reviewed more rigorously. The test used to require only that an ordinance be reasonable, not arbitrary, and that it be substantially related to the objective to be achieved. It was not clear before whether this government interest had to be “important” or merely “legitimate.” Now, however, it is clear that the ordinance must be substantially related to an “important” government interest, and that this interest must clearly exist at the time the ordinance is enacted. In addition, under the previous standard, the challenger had to prove that the ordinance failed the test; under the new standard, the government must prove that the ordinance passes the test.

The other major issue in this case involved municipal power to prohibit halfway houses in all zoning districts. Municipalities may only enact zoning ordinances for the purposes listed in RSA 676:16, including “promoting the health, safety or general welfare of the community.” If zoning is exercised for different considerations or purposes, it will be held invalid as “ultra vires” or beyond the scope of the municipality’s authority. As the Court explained, “when an ordinance will have an impact beyond the boundaries of the municipality, the welfare of the entire affected region must be considered in determining the ordinance’s validity.”

This reasoning was originally part of a case in 1991 involving barriers to affordable housing, and the Court agreed in the present case to extend that reasoning to prohibitions against halfway houses because it found that “working to ease an offender’s transition back into society” implicated the general welfare and had an impact beyond the city’s borders. “Were this Court to endorse the [o]rdinance and its application to the proposed use, the communities surrounding Manchester will be free to follow Manchester’s lead and ban halfway houses…the effects of such a result would not end at the New Hampshire border. If the New Hampshire communities were to act as Manchester has, it could effectively push all new halfway houses out of New Hampshire.” Again, the Court remanded to the trial court for additional proceedings and did not issue an ultimate ruling on the specific facts of this case, but the implications for all municipalities are clear. Without a substantial and compelling reason to support a ban on halfway houses, a court may find that a municipality has an obligation to provide a meaningful opportunity for such facilities within its region.

The Court also addressed two other issues in this case. First, it found that the evidence did not reasonably support the trial court’s determination that CRJ proved the denial of the use variance constituted an unnecessary hardship. In particular, the Court found that the evidence CRJ presented did not demonstrate that its proposed site was unique and, therefore, failed to meet the Simplex standard of proving that the property was burdened by the restriction in a manner that was distinct from similarly situated property and resulted from special conditions of the land. And finally, the Court applied the recently clarified standard for a police power ordinance to withstand a substantive due process challenge under the state constitution. As set forth in Boulders at Strafford v. Town of Strafford (153 N.H. 633 (2006)), the rational basis test requires that legislation be rationally related to a legitimate governmental interest. The Court in this case found that there were several legitimate governmental interests that the city’s zoning ordinance could serve, including concern that the prisoners at a facility would either pose some threat to the surrounding community, engage in recidivism, exacerbate the city’s perceived burden in accommodating a disproportionate share of social services, or affect surrounding property values.

Please be advised that the foregoing case summary is based upon a Supreme Court slip opinion. Slip opinions are subject to change following motions for rehearing and/or motions for reconsideration. The Court may also modify the opinion without motion. The final version of the Court’s opinion is that which appears in the New Hampshire Reports.

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