Small Lot Development Loophole Closed

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On Monday, September 10, the Council unanimously approved Council Bill 117572, an emergency ordinance to close a loophole in the City’s Land Use Code that allowed developers to build large houses on very small lots by manipulating lot lines intended for tax purposes.  These lots are not platted or identified in property records, and do not show up on land use or real estate maps.  In one case a developer built a three-story house on a lot of only 1050 square feet.

Contrary to some of the misinformation that is circulating about this legislation, it does not prevent development on all small lots, and will not affect the ability of property owners who have platted small lots that have at least 50% of the square footage of the underlying zoning standard to proceed with constructing houses.  The ordinance will make some changes in development standards, and will close a loophole in the City code to prevent new substandard lots from being created in a random manner.

The emergency ordinance is a rarely-used procedure in which the Council can act quickly to provide a short term fix (stopping problem activities) while it considers legislation for a long-term solution; in this case, land use standards that make sense on very small single family lots.  Emergency ordinances are defined under State law, and expire after one year.  The Council took this unusual step to ensure that developers did not try to apply for permits under the existing regulations, thereby allowing problematic developments to continue using lot lines that were not intended for development purposes.

This issue came to our attention earlier this summer, when we learned from community groups that some developers were using an obscure provision of City code that allows lots that are well below minimum lot size requirements to be used for infill development. These substandard lots, often times well below 3,000 square feet, were generally created before 1957 for tax purposes.  In some cases these lots were actually created by mistake when lot descriptions on more than one line were transcribed from hand-written records as two separate lots.  Others had been intended to be erased by new plats or subdivisions that established legally developable lots.  When the Council adopted minimum lot size standards in 1957 and again in 1982, they allowed these lots to be “grandfathered” as legal nonconforming lots while the City developed new regulations; this allowed people that owned these lots time to develop them and recoup their investment within a reasonable time period.

Unfortunately, there was no expiration date on the grandfathering clause, and recently some developers have rediscovered it and are using it to create housing that is not compatible with neighboring single family houses.   Community members from a number of neighborhoods called this to our attention, and created a website at  They pointed out to us that, despite a small number of these occurring on a yearly basis, there is a software package planned for release in October that will allow these substandard lots to be identified quickly and easily.  That means that we could see many more in the near future if we do not take immediate action.

The emergency ordinance brings these lots into conformance with other lots under the City’s land use regulations by preventing development on lots that are less than 50% of the square footage defined as a minimum size in the underlying zoning.  It also ends the use of historic property tax records as a basis for qualifying for minimum lot area exceptions, and allows development of lots with an area up to 75 percent of the general minimum lot area of the zone (i.e. lots up to 3,750 square feet in an SF 5000 zone), but only up to a limit of 22 feet in height (2 stories).  Owners of existing houses on small lots retain the right to renovate, replace, or expand their houses.

Developers of these structures have argued that they should not be limited because they are building new housing, and that this loophole allows them to make it more affordable because the cost of land is lower for small lots.  Actually, small existing houses are affordable – new construction will almost always be more expensive.  One of the projects built on a 2400 square foot lot was listed for $665,000 – a pretty long distance from affordability.  Under this legislation, smaller houses could continue to be built that would be more affordable and appropriate for the size of lots that are being used.  Contemporary trends are for people to downsize into smaller housing units, reversing the trend that led to large homes that are neither affordable nor sustainable.

Last year, the Council adopted legislation that limited the amount of development that can occur on lots that are less than 2,500 square feet, including height limits and structure width and depth standards. These interim regulations would modify those regulations to limit all single family zoned lots that are less than 3,750 square feet to a principal structure limited to 22 feet in height.

Under the State code governing emergency legislation, the Council will hold a public hearing on Thursday, September 13, at 9:30 AM in the Planning, Land Use, and Sustainability (PLUS) committee to hear comments on this legislation and on the plans for next steps.  The Council legislation also creates a work plan for developing permanent legislation to address this issue.  Under the work plan, new legislation will be developed by the end of this year, go through environmental review, and come to the City Council in the spring of 2013.

This legislation is not about density – the modest number of homes that can be built under this loophole are not a significant addition to the housing stock.  It is certainly not about affordable housing.  It is about replacing a random pattern with no rhyme or reason, dependent on a developer happening to find archaic lot lines that were not intended to define a buildable lot, with planning in a systematic and thoughtful way. 

The neighbors who brought this to the Council had already been impacted:  houses have been built or permits granted that affect their houses.  They should be applauded for their willingness to engage in community and civic action unselfishly, out of altruistic concern to prevent their fellow residents from having the same negative experience.  This is a great example of democratic engagement:  people mobilizing not out of a desire for profit, but in order to maintain healthy communities.