Builders Sue Over Subdivision Regulations

By Beacon Staff

A state building group sued Flathead County over subdivision regulations last week, just as commissioners were nearing the final steps of a year-and-a-half long process to revise the rules.

The Montana Building and Industry Association filed the lawsuit Monday in Flathead County District Court, describing the county’s subdivision regulations as “illegal” and “the most burdensome and costly in the state.” In addition, the group says the county’s regulations conflict with state laws, and will make building affordable workforce housing extremely difficult.

MBIA is a statewide association of homebuilders and light commercial construction contractors, including 330 member businesses in Flathead County.

“There are provisions within the regulations that are patently illegal,” Bill VanCanagan, MBIA’s attorney, said in a prepared release. “The purpose of this lawsuit is to ensure a fair, predictable and constitutional regulatory process going forward.”

Last April, VanCanagan, representing several state and local building and real estate groups, wrote a letter asking the county to re-write its regulations. MBIA maintains that the county has “held their ground and seven months have passed without any compromise or consideration,” forcing the lawsuit.

County officials, however, say they replied to MBIA’s letter, took the association’s comments into consideration and made some changes as a result. “To say we didn’t consider their concerns or get back to them is a total falsehood,” Commissioner Gary Hall said.

From road standards to flood-plain protection, the county subdivision regulations lay out what steps developers must take to get a new project approved. They apply only to those choosing to subdivide land.

Early last year, the county began revising its subdivision regulations because state law required them to be in compliance with the county’s new growth policy. Most of the regulations were approved last summer, but the county withheld about 15 of the most contentious regulations, including streamside setbacks, for further review and discussion.

As it stands now, the MBIA lawsuit addresses only the regulations as approved last summer, since the latest changes haven’t received a final nod from the commission. The commissioners are scheduled to hold a final vote on those changes Dec. 8 at 11 a.m.

This was the second lawsuit filed against the county over the subdivision regulations. In October 2008, American Dream Montana, a local pro-property rights group, sued, but is waiting to serve the complaint pending the county’s decisions on several of the provisions, namely streamside setbacks.

While MBIA is the lawsuit’s sole plaintiff, the association received support from several state and local groups in reviewing Flathead’s regulations, including the Flathead Building Association, the Northwest Montana Association of Realtors, the Montana Association of Realtors and the Montana Chamber of Commerce.

“In the midst of a massive building slowdown the county has decided to make the process harder, longer and more costly,” Bob Helder, president of the Flathead Building Association, said in a prepared statement. “We are already seeing our fellow builders struggle. There is a need to challenge the county with these illegal regulations in order to protect and promote our building industry and the people we serve.”

According to the MBIA, new housing starts in the Flathead have declined by 35 percent compared to last year and further reductions are likely in the coming months.

NMAR President John Osweiler voiced similar concerns, saying that the regulations would further slow the real estate industry, which “has been the driving force behind economic prosperity in the Flathead Valley.”

“Not only do the new regulations violate state law, they will unnecessarily increase the regulatory costs of building workforce housing in our growing community,” Osweiler said. “By adding thousands of dollars to the price of an entry-level home, (the regulations) will push even more hard-working families out of the home buying market.”

In its lawsuit, MBIA argues that the subdivision process gives the county planning office too much discretionary authority and illegally requires subdividers to pay for improvements through unclear latecomer agreements and off-site road improvements.

The lawsuit also alleges the regulations illegally exceed state requirements, including provisions that deal with site disturbance near riparian areas, building on slopes, property density for seasonally high groundwater and water-supply systems and sewage treatment.

MBIA is asking the court to prevent county officials from enforcing the subdivision regulations until they’re revised and to declare the regulations in question unconstitutional. The association has asked for a jury trial.