footnotes and supporting documents were also submitted but are not included on this webpage.

Dear Chair Mielke and Commissioners Richard and Mager:

Subject: Answers to Questions Raised at the August 18 Public Hearing on the
Planning Commission recommendations on Rural Cluster Developments

This letter responds to questions raised at the Board of County Commissioners August18, 2009, public hearing related to the use of restrictive covenants, such as conservation easements, to ensure that the open space parcel in the planned unit development continues to be used for this purpose. Restrictive covenants are frequently used to maintain open space parcels, are enforceable, and to not raise regulatory “takings” concerns. There use for this purpose has also been approved by the Washington State Supreme Court.
Restrictive covenants, such as conservation easements, have many advantages Restrictive covenants, such as conservation easements, are frequently used to ensure that open space parcels are maintained for open space uses in cluster subdivisions.

Restrictive covenants, such as conservation easements, have many advantages:

Restrictive covenants, such as conservation easements, are frequently used to ensure that open space parcels are maintained for open space uses in cluster subdivisions.1 A restrictive covenant is a type of contract that limits the future use of land.

Restrictive covenants have many advantages:

Restrictive covenants protect the buyers of lots within a rural cluster subdivision. One of the reasons that property owners buy in cluster subdivisions is because they want the benefit of larger open space parcels. The buyers often pay more for lots in subdivisions with open space parcels. Restrictive covenants protect the open space and give the lot buyers what they paid for and expect, the open space parcels in their subdivision.

They also protect anyone who would consider buying the open space parcel by giving them notice of the allowed use of the open space parcel. This is because
restrictive covenants are recorded in the county’s real property records. They are
available to property owners within the cluster subdivision and anyone who may
be considering purchasing any land in the subdivision. Title insurance companies also disclose restrictive covenants in the preliminary title insurance policy binders provided to prospective purchasers, giving them notice of the covenants and their contents.

Restrictive covenants, if properly drafted, are enforceable by the county. In City of Olympia v. Palzer, the City of Olympia sued the buyers of several open space parcels permanently protected with restrictive covenants. The city was able to maintain the lawsuit. The restrictive covenants were held to be enforceable by the city, even after the open space parcels were sold at a tax foreclosure sale.

When properly drafted, restrictive covenants are enforceable by the owners of the property within the cluster development. Since the property owners can sue to enforce the restrictive covenant, it reduces the enforcement burdens on the county. As the Washington State Supreme Court wrote in City of Olympia v. Palzer:
The objectives of a PUD include a more efficient and desirable use of open land, and flexibility and variety in the physical
development pattern, in order to provide a more desirable living environment than would be possible through a strict application of zoning ordinance requirements. Wiggers v. Skagit Cy., 23 Wn. App. 207, 213-14, 596 P.2d 1345 (1979); Frankland v. Lake Oswego, 267 Ore. 452, 517 P.2d 1042 (1973). Restrictive covenants are imposed as part of a common plan of development
to benefit all of the grantees of the developer. See generally Chimney Hill Owners' Ass'n v. Antignani, 136 Vt. 446, 392 A.2d 423 (1978). The ability of homeowners in a PUD to enforce restrictive covenants against original ans usbsequent property owners helps ensure that the community will be able to maintain its planned character and provide the lifestyle sought by its
residents in making their homes there. See generally 6 P. Rohan, Homeowner Ass'ns and Planned Unit Devs., § 8.01 (1986).

Planned unit developments (PUDs) are like a cluster subdivisions in that they
typically allow the housing units permitted on the land in the development to be concentrated on part of the site, in a cluster, and requires that part of the site be maintained in a permanent open space tract or parcel. Cluster developments and PUDs are similar in many respects.

Restrictive covenants provide for the long-term management of open space tracts. Indeed, the Washington Supreme Court has held that they even are enforceable if the open space parcel is foreclosed.

As we saw in the quote from the Washington Supreme Court’s City of Olympia v. Palzer opinion, restrictive covenants have been recognized by the courts, are enforceable, and have a long history of being used to maintain open space parcels in Washington State.

Counties frequently require the use of restrictive covenants, such as
conservation easements, to effectively manage open space parcels
Counties frequently require the use of restrictive covenants, such as conservation easements, to ensure that open space parcels are kept in that use. For example, the
following central and eastern Washington counties use restrictive covenants or deed
restrictions to manage open space parcels:

Chelan County requires deed restrictions, which work like restrictive covenants, to ensure that “[a]ll privately owned common open space shall continue to conform to its intended use and remain as expressed in the site development plan by the inclusion in all deeds of appropriate restrictions to ensure that the common open space is permanently preserved according to the site development plan. Said deed restrictions shall run with the land and be for the benefit of present as well as future property owners in the planned unit development.”

Douglas County requires restrictive covenants to prevent the subdivision of open space parcel and restrict the use of the open space parcel to specific open space uses.

Franklin County requires restrictive covenants to “govern the use, maintenance, and perpetual care” of the open space in a planned unit development.

Counties do not require the payment of a stewardship fee when using restrictive covenants or conservation easements to effectively manage open space parcels
When counties require the use of a restrictive covenant to protect the open space parcel, they do not require the payment of a stewardship fee. Stewardship fees are typically required when donating an easement to a land trust. Since the open space restrictive
covenants are generally granted to the subsequent buyers of the lots in the development and the county, a stewardship fee would not be charged unless the developer chose to
grant the restrictive covenant to a land trust rather than the county. In addition, because the property owners in the subdivision can enforce the restrictive covenant, it reduces the enforcement costs for counties.

It is not an effective use of public funds to use conservation futures funding to
buy development rights on open space parcels
Spokane County allows all of the land within a rural cluster subdivision to be counted towards the number of homes permitted in the development, including the land in the open space parcel. So the developer gets the full use of the land and the “development rights” of the open space parcel have already been used.

When they are done well, cluster subdivisions can be more profitable for the developer because the development has lower public and private improvement costs, the lots command a premium price, and they sell more quickly than the lots in conventional subdivisions.

For these reasons, the county should not use its scarce conservation futures funding to buy the development rights of the open space parcel. Conservation future funds should be used to protect land from development, not to subsidize land in developments.

Restrictive covenants, such as conservation easements, do not result in a regulatory “takings”
The developer of a cluster subdivision gets the full use of the land, all of the land in the cluster subdivision, including the open space parcel, can be used to calculate the allowed number of housing units. So requiring a restrictive convent to permanently protect the open space parcel does not create a risk of a regulatory taking for the county. In Estate of Friedman v. Pierce County, the Washington Supreme Court dismissed a takings claim on land that had been designated as “open space” in a PUD on the grounds that the takings claim was not ripe because the record did not show that the property owners had not requested permission to develop the property. The Supreme Court wrote that in examining a takings claim the courts would consider all of the land within a PUD and the development of land within a PUD had to be consistent with the PUD requirements. Since this discussion was not necessary to decide the case, it is not binding law, but indicates how the courts would likely rule and that permanently protecting open space
parcels in cluster subdivisions will not result in a regulatory “takings.” Indeed, there has never been a published appellate case in Washington State that found that the requirement to permanently protect an open space parcel in the planned unit development
or cluster subdivision is a takings.

When done well, the developers of cluster subdivisions can charge premium prices for the lots in the subdivision by virtue of the dedicated open space. Because of clustering, cluster subdivisions have lower public and private improvement costs. The lots also sell more quickly than conventional subdivisions. These three factors make cluster subdivisions more profitable to developers than conventional subdivisions. Given that the open space parcel contributes to the increased profits for the developer, it is only fair that it be maintained for the life of the subdivision so the buyers can be assured of receiving the benefit of the premium price they paid. This higher profit also means that the regulatory “takings” risk is low.

We recommend adoption of the following language to protect the buyers of land in
cluster subdivisions
We recommend that the county adopt the following language modified from the language proposed by staff under the “Option 1 Code Revision” on page 13 of the Spokane County Planning Commission Findings of Fact and Recommendation Appendix A: Rural Cluster Development Proposed Amendment Options. Our additions are double underlined and our deletions are double struck through. These amendments clarify that the subsequent
buyers are one of the beneficiaries of the restrictive covenant, helping to reduce the county’s enforcement costs, and that the subdivision applicant is given the choice of granting the restrictive covenant to the county or the land trust. If the applicant chooses the county, then no conservation fee would be required. An applicant may chose to grant
the restrictive covenant to a land trust for tax benefits or other reasons.

14.820.160 Open Space Management

x. In the Rural Conservation (RCV), Small Tract Agricultural (STA), Rural
Traditional (RT), or Rural-5 (R-5) zones a restrictive covenant permanently protecting the open space from future development shall be granted to the subsequent buyers of the lots in the subdivision or a homeowners association made up of those buyers and Spokane County or, if the applicant chooses, to an established non-profit land trust, as approved and designated by Spokane County. The restrictive covenant shall include provisions that implement the approved open space management
plan and specifically define land use restrictions consistent with this Chapter.

x. If the remainder parcel is within the Rural Conservation (RCV), Small Tract
Agricultural (STA), Rural Traditional (RT), or Rural-5 (R-5) zones, the following
title notice shall be filed on the property within the plat and the wording shall
additionally be placed on the face of the plat dedication:

Lot __, Block__, of ________ is an open space parcel and uses on the parcel are
restricted by a restrictive covenant under Auditors document no. _________. The number of housing units that would otherwise be
allowed on this parcel have been permanently transferred to other parcels in this
subdivision. The open space parcel is permanently preserved as open space and future subdivision of the parcel to allow increased residential density is
prohibited. Only those uses identified in the conservation easement shall be
allowed.

Thank you for considering our comments. If you require additional information please contact Rick Eichstaedt at phone (509) 835-5211 and e-mail ricke@cforjustice.org or Robert Beattey at phone (206) 343-0681 Ext. 110 and e-mail rob@futurewise.org.