Builders sue over subdivision rules

By LYNNETTE HINTZE / The Daily Inter Lake

A state building group is suing Flathead County over subdivision regulations it argues are illegal and costly.

The Montana Building Industry Association filed the lawsuit Monday in Flathead District Court, challenging several provisions of the Flathead County subdivision regulations and alleging some rules conflict with state law.

The state association, which includes homebuilders and light commercial contractors, worked with a coalition of groups, including the Flathead Building Association, Montana and Northwest Montana Association of Realtors and the Montana Chamber of Commerce, in reviewing Flathead regulations.

In March this year, Missoula attorney William VanCanagan of the Datsopoulos, MacDonald & Lind law firm sent a letter to the Flathead County commissioners, outlining the alleged deficiencies and asking them to revisit the regulations.

County Deputy Attorney Peter Steele responded to the association in a May 9 letter, stressing that the county's subdivision regulations were adopted after extensive public participation. Most of the regulations took effect Aug. 1, 2007, though amendments dealing with water setbacks are still pending.

While Steele said it would have been helpful to have the association's input during that public process, he said county officials were willing to discuss potential changes.

But in a press release issued Monday, the state building association maintained the county has held its ground and seven months have passed without any compromise or consideration.

"We are standing up for property owners and small businesses," Dustin Stewart, executive director of the association, said in a prepared statement. "This is about government accountability to homebuyers and small business."

The association's concerns are threefold: the cost of new development; a subdivision process it says is slow, unpredictable and costly and gives the planning office unreasonable authority; and development standards and restrictions that it claims are more stringent than state regulations.

"There are provisions within the regulations that are patently illegal," VanCanagan said. "The purpose of this lawsuit is to ensure a fair, predictable and constitutional regulatory process going forward."

The association has asked for a jury trial.

THE BUILDING association alleges that Flathead subdivision regulations dealing with latecomer agreements and off-site road improvements require subdividers to pay for improvements without ensuring that such improvements meet the legal requirements of "essential nexus."

The group further claims that regulations treat applicants unfairly by vesting too much discretionary authority with the Planning and Zoning Office and by failing to impose penalties if the county takes too long to review an application.

"The Flathead County Development Code does not provide recourse for the applicant when the county fails to timely process applications," VanCanagan said in his initial letter to the county. "However, [it] penalizes applicants for failing to meet certain deadlines."

He said numerous Flathead regulations exceed state regulations, 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.

Citing alleged violations of the due process clause of the 14th Amendment and Fifth Amendment to the U.S. Constitution, the state building association asks the court for a temporary restraining order and temporary and permanent injunctions against the county to prevent officials from enforcing the subdivision regulations until they're revised.

The lawsuit further asks the court to declare the regulations in question unconstitutional.

MEMBERS OF the coalition that reviewed the Flathead regulations say they agree with the state association's premise that Flathead County's subdivision regulations are among the most burdensome and costly in the state.

"In the midst of a massive building slowdown the county has decided to make the process harder, longer and more costly," said Bob Helder, president of the Flathead Building Association. "We are already seeing our fellow builders struggle."

George Culpepper, government affairs director of the Northwest Montana Association of Realtors, said the regulations have created an "affordability crisis" in the local housing market.

"On the Realtors side of things, housing is suffering because of what the Flathead County regulations have done," Culpepper said.

Because developers pass exorbitant fees on to the homeowner, "it puts affordable houses out of reach for a lot of the Flathead County work force," he said.

In the Flathead, new housing starts have declined by 35 percent from last year and further reductions are likely in the coming months, the Flathead Building Association estimated.

Features editor Lynnette Hintze may be reached at 758-4421 or by e-mail at lhintze@dailyinterlake.com