New Law Defines ‘Unnecessary Hardship’

By Cordell A. Johnston

In 2009, after several years of effort, the New Hampshire Legislature passed a bill to codify the standards for granting a zoning variance and, most significantly, to overrule the New Hampshire Supreme Court’s decision in Boccia v. Portsmouth, 151 N.H. 85 (2004). The Court in that case had recognized, for the first time, a legal distinction between a “use variance," which allows the applicant to establish a use that is not permitted under the zoning ordinance, and an “area variance," which gives the applicant relief from a dimensional requirement for an otherwise permitted use.

The Boccia Decision and Its Fallout

The Court in Boccia had created a new standard for establishing “unnecessary hardship" in area variance cases, which was significantly different from the standard previously established for all variances in Simplex Technologies v. Newington, 145 N.H. 727 (2001). Although the Court stated at the time that it believed this distinction “will greatly assist zoning authorities and courts in determining whether the unnecessary hardship standard is met," the exact opposite proved to be true. The newly created distinction immediately gave rise to a whole new basis for confusion and dispute—whether the application called for a use variance or an area variance.

Over the ensuing five years, zoning boards, applicants and courts frequently struggled with this question. Many zoning boards developed two different application forms—one for use variances and one for area variances—but they often encouraged applicants to file both forms because it was unclear which standard would apply. Further, many applications could require both a use variance and an area variance, requiring the board to apply two different standards to the same case.

Beyond that, there was significant frustration with the Boccia standard itself. Many attorneys and zoning board members commented that it seemed to make the granting of an area variance—or at least a finding of unnecessary hardship—almost automatic because it was so easy to satisfy.

The New Law

The law enacted this year began its life as House Bill 446, but it ended up in Senate Bill 147, due to some parliamentary maneuvers that need not be explained here. The legislation completely rewrote the statute governing variances, RSA 674:33, I(b), to read as follows:

I. The zoning board of adjustment shall have the power to:
. . .
(b) Authorize, upon appeal in specific cases, a variance from the terms of the zoning ordinance if:
(1) The variance will not be contrary to the public interest;
(2) The spirit of the ordinance is observed;
(3) Substantial justice is done;
(4) The values of surrounding properties are not diminished; and
(5) Literal enforcement of the provisions of the ordinance would result in an unnecessary hardship.
(A) For purposes of this subparagraph, “unnecessary hardship" means that, owing to special conditions of the property that distinguish it from other properties in the area:
(i) No fair and substantial relationship exists between the general public purposes of the ordinance provision and the specific application of that provision to the property; and
(ii) The proposed use is a reasonable one.

(B) If the criteria in subparagraph (A) are not established, an unnecessary hardship will be deemed to exist if, and only if, owing to special conditions of the property that distinguish it from other properties in the area, the property cannot be reasonably used in strict conformance with the ordinance, and a variance is therefore necessary to enable a reasonable use of it.

The definition of “unnecessary hardship" set forth in subparagraph (5) shall apply whether the provision of the ordinance from which a variance is sought is a restriction on use, a dimensional or other limitation on a permitted use, or any other requirement of the ordinance.

It is the last sentence that specifically overrules Boccia, providing that the definition of “unnecessary hardship" will apply whether the application is for a use variance or an area variance.

The new law also does several other things. First, it lists all of the criteria for a variance a little more neatly than the old statute. Second, it finally codifies the no-diminution-in-surrounding-property-value requirement that the Supreme Court has observed for more than 50 years, but that has never been part of the statute. Third, it codifies in subparagraph (5)(A), with some clarifying language changes, the Simplex standard for unnecessary hardship.

Finally, it also codifies in subparagraph (5)(B) the much stricter pre-Simplex standard for unnecessary hardship, often referred to as the Governor’s Island standard because it was derived from Governor’s Island Club v. Gilford, 124 N.H. 126 (1983). That standard—which was effectively overruled by the Simplex decision—required an applicant to demonstrate that the zoning ordinance precluded any reasonable use of the property. Under the new law enacted in SB 147, the Simplex standard—or, in some rare cases, the Governor’s Island standard—will be used to determine whether unnecessary hardship exists in all cases, both use variances and area variances.

Codification of the Simplex Standard

Because the Simplex standard was based on the Supreme Court’s interpretation of constitutional requirements, the drafters of the new law believed that if the Legislature was going to overrule Boccia and establish a single standard for use and area variances, that standard had to be based on Simplex—even though some would have preferred to turn the clock back to Governor’s Island. Thus, the heart of the new statute is the Simplex definition of “unnecessary hardship," in subparagraph (5)(A).

The statute does not, however, use the exact language from the Simplex opinion, because that language was ambiguous at best. The Court in Simplex had ruled that unnecessary hardship exists when:

(1) a zoning restriction as applied to [the] property interferes with [the] reasonable use of the property, considering the unique setting of the property in its environment; (2) no fair and substantial relationship exists between the general purpose of the zoning ordinance and the specific restriction on the property; and (3) the variance would not injure the public or private rights of others.

The meaning of the first prong, in particular, is far from clear. For that reason, the new law incorporates language from subsequent cases that interpreted and applied the Simplex standard.

For example, in Rancourt v. Manchester, 149 N.H. 51 (2003), the Court clearly stated that under Simplex, the applicant must demonstrate that “special conditions of the land render the use for which the variance is sought ‘reasonable.’" In Garrison v. Henniker, the Court emphasized that the term “unique setting" refers to “a special condition of the land which distinguishes it from other land in the same area with respect to the suitability for the use for which it is zoned." Thus, the first prong of the Simplex standard was rewritten in SB 147 to state that “owing to special conditions of the property that distinguish it from other properties in the area, … the proposed use is a reasonable one."

The second prong of the Simplex standard—“no fair and substantial relationship exists between the general purposes of the zoning ordinance and the specific restrictions on the property"—was reasonably clear, and thus was left largely intact in SB 147. The third prong—“the variance would not injure the public or private rights of others"—was eliminated. This was not intended as a substantive change to the hardship standard; instead, it was eliminated because it was felt to be redundant of the other statutory criteria. Case law after Simplex had made it clear that the “public or private rights of others" inquiry is “coextensive" with the “public interest" and “spirit of the ordinance" elements under the statute. This being the case, there seemed to be no reason to duplicate those questions under the hardship standard, since the applicant must satisfy all five elements under the statute to obtain a variance.

Codification of the Governor’s Island Standard

Why, one might ask, does the new law codify the old Governor’s Island standard in addition to the Simplex standard, if Governor’s Island was overruled by Simplex?

The answer is that Simplex did not entirely overrule Governor’s Island. The Court in Simplex said the definition of unnecessary hardship, as established in Governor’s Island and subsequent cases, had become “too restrictive in light of the constitutional protections by which it must be tempered." The Court therefore adopted a less restrictive test. However, there is not a one-dimensional spectrum of variance cases, so that an application that satisfies Simplex will automatically satisfy Governor’s Island. There may be a rare case in which the applicant could satisfy the Governor’s Island test—by demonstrating that the zoning ordinance precludes any reasonable use of the land—but does not pass the Simplex test.

This most likely would happen where there is clearly a “fair and substantial relationship … between the general purposes of the zoning ordinance and the specific restriction on the property"—and the variance therefore fails on the second prong of Simplex— but because of special conditions, the effect of the zoning restriction on the property is to preclude any reasonable use. If such an application is judged solely on the Simplex standard, it fails, but the result would be to deprive the owner of any reasonable use of the land—an unconstitutional taking. Thus, there has to be a secondary “safety valve," since the alternative would be for a court to invalidate the zoning restriction altogether. Subparagraph (5)(B) provides relief for the applicant in that rare case.

The Legislature’s Statement of Intent

During the legislative process, some questions were raised about the language of the bill, specifically whether it could be read as somehow modifying the Simplex test for unnecessary hardship, given the slightly different language it uses. In response, the Legislature included the following “statement of intent" in the bill. This will go in the 2009 session laws, but will not become part of the statute:

The intent of … this act is to eliminate the separate “unnecessary hardship" standard for “area" variances, as established by the New Hampshire supreme court in the case of Boccia v. City of Portsmouth, 155 N.H. 84 (2004), and to provide that the unnecessary hardship standard shall be deemed satisfied, in both use and area variance cases, if the applicant meets the standards established in Simplex Technologies v. Town of Newington, 145 N.H. 727 (2001), as those standards have been interpreted by subsequent decisions of the supreme court. If the applicant fails to meet those standards, an unnecessary hardship shall be deemed to exist only if the applicant meets the standards prevailing prior to the Simplex decision, as exemplified by cases such as Governor’s Island Club, Inc. v. Town of Gilford, 124 N.H. 126 (1983).

This ought to answer any questions about the new law’s meaning.

Applying the New Law

The new law takes effect on January 1, 2010, and applies to any application for a variance that is filed on or after that date. It should make the job of zoning boards significantly easier, as they will no longer have to try to understand the Boccia standard, and will not have to decide whether each application calls for a use variance or an area variance.

To establish unnecessary hardship, the applicant in every case will first have to demonstrate that there are “special conditions of the property that distinguish it from other properties in the area." The property must be different, in a meaningful way, from other properties in the area, and must be burdened more severely by the zoning restriction.

Second, the applicant must establish that, because of the special conditions of the property, “no fair and substantial relationship exists between the general public purposes of the ordinance provision and the specific application of that provision to the property." Finally, the applicant will have to demonstrate that because of the special conditions of the property, the proposed use is reasonable. The reasonableness of the use will depend, to a large extent, on how the proposed use would affect the surrounding area.

All of this is consistent with existing case law, so zoning boards should not have to change their approach to variances, except that they will no longer analyze area variances under a separate standard.

As stated above, there may be a rare case in which the applicant fails the Simplex test but can demonstrate that, because of the special conditions of the land, the zoning restriction precludes any reasonable use of the land. In such a case, the alternative standard under paragraph (5)(B)—the Governor’s Island standard—is satisfied and the board may find that an unnecessary hardship exists.

A Reminder

Discussions about variances tend to focus on the “unnecessary hardship" requirement and sometimes obscure the fact that an applicant must satisfy four other requirements. This article addresses only unnecessary hardship, because that is the only criterion that is changed by the new law. However, always remember that an applicant must satisfy all five criteria—all of which are now listed clearly in the statute—to obtain a variance.

Cordell Johnston assumes the role of acting government affairs counsel with the New Hampshire Local Government Center’s Legal Services and Government Affairs Department on September 4, 2009. Lecture 2 of LGC’s 2009 Municipal Law Lecture Series provides an in-depth discussion of this new law.