This is a zone change request from Residential 9,600 (R-96) to Residential 7,000 (R-70) on Lot 8, Block 1 of Meadowood Subdivision located at 2302 Meadowood Street. The property is owned by Mark Dawson and BlueLine Engineering, represented by Marshall Phil, is the agent. The owner and agent conducted a pre-application neighborhood meeting on May 31, 2011, at 6:00 pm at the Century 21 office at 1605 Shiloh Road.  The Zoning Commission conducted a public hearing on December 6, 2011, and is forwarding a recommendation of approval on a 5-0 vote.

State law at MCA 76-2-304 requires that all zone changes be reviewed in accordance with 12 criteria. Using the 12 criteria to determine the appropriateness of the zone change request, the City Council may:
1. Approve the zone change request
2. Deny the zone change request
3. Allow withdrawal of the application
4. Delay action for up to thirty (30) days

The property will increase in property value if the zone change is granted. This may increase the tax revenue to the city.

The applicant is requesting to rezone this property on the northwest corner of the intersection of Meadowood Street and Lyman Avenue. Lyman Avenue dead ends at the west property line in an alley that runs north and south between Poly Drive and Colton Boulevard. The applicant conducted a pre-application neighborhood meeting on May 31, 2011, and no surrounding property owners attended. Several surrounding property owners submitted letters of support subsequent to the meeting. These letters are in Attachment D. The Planning Division notified the surrounding property owners on November 18, 2011 and no public comment has been received.

The applicant attempted an identical zone change for this property in March 2010, and this application was denied by the City Council. The previous application raised several concerns related to illegal spot zoning. Although this is an identical application, it appears the neighborhood has been sufficiently informed of the intent and has no concerns with the proposed zoning. Additional research conducted by Planning staff since the 2010 application has revealed similar zone changes in the R-96 zoning districts and a more recent court case clarifying illegal spot zoning related to residential zones.  

Planning staff has found and reviewed similar zoning changes in R-96 neighborhoods that indicate the compatibility of the proposed R-70 zoning. In 1981, 1983 and 1990, the City Council approved zone changes in single family (R-96) zoning districts to allow 2-family dwellings and multi-family dwellings. These zone changes have not had a detrimental effect on surrounding properties and are compatible with the R-96 zoning. A review of property within 600 feet of the property indicates at least 3 similarly developed parcels. Two of those 3 properties appear to be up-down duplex or triplex dwellings and the third property is built as a side-by-side duplex as the subject property was constructed. All three similar parcels were developed in the early 1950s prior to the current zoning. The side-by-side duplex dwelling at 2302 Meadowood was constructed in 1956. It has been continuously used as a two-family dwelling since that time. Most lots in this subdivision and surrounding subdivisions were developed with single-family homes. Two-family dwellings are not an allowed use in the R-96 zone, however it is considered a legal nonconforming use and may continue so long as the use is not abandoned for more than 1 year, or damaged or destroyed by more than 50% of its replacement value at the time of the damage. Improvements to the structure can be done as long as those improvements do not exceed 50% of its replacement value. For example, the owner can replace the roof, add on to the garage, or build a deck so long as those improvements do not exceed 50% of the structure replacement cost.

The owner and agent have proposed the zone change so the 2-family dwelling can be replaced in the future if it damaged or destroyed. In addition, the owner is contemplating creating two unit ownerships (a condominium or townhome) so each dwelling unit could be separately owned. Under the current zoning of R-96, only a single family dwelling could replace the 2-family dwelling. To create a unit ownership, the Planning Division must certify the property complies with zoning and the property does not comply with the current zoning. The proposed zoning of R-70 allows single family dwellings on lots of at least 7,000 square feet and 2-family dwellings on lots of at least 9,600 square feet. The lot is 9,836 square feet. The proposed zoning of R-70 would make the 2-family dwelling compliant with zoning.

The proposed R-70 zone is dissimilar in so far that it allows 2-family dwelling units and the R-96 zone does not allow attached dwellings. From 17th Street West to Rehberg Lane and between Colton Boulevard and Rimrock Road, is a solid section of R-96 zoning which only allows single family dwellings. Of 105 properties within 600 feet of this location, 3 lots have a legal nonconforming duplex or triplex dwelling. Although this is not significant percentage of the total number of properties within 600 feet, it does indicate these properties may diminish in value through lack of investment in maintenance and upgrades due to the risk of loss – through accidental fire, natural disasters and other unpredictable calamities. This property has the lowest building value as compared to others this street and the land value exceeds the building value by 57 percent. The other side-by-side duplex on Meadowood at 2435 Meadowood also has an “upside down” land to building value of approximately 42 percent. This indicates current and past owners have not invested in required maintenance or improvements for these two-family dwellings. This dis-investment may affect surrounding property and building values in the future.

Due to the size and location of the parcel, the proposed zoning must be evaluated to determine if it meets the criteria for the creation of an illegal spot zoning. Spot zoning - as defined by the Montana Supreme Court - is a three-prong test and each prong should be evaluated separately but weighed as a whole. A "yes" answer to each of the three tests is usually required before determining that a spot zoning has occurred. The precedent case is Little v Board of County Commissioners of Flathead County in 1981. The first test or criteria used by the courts to determine a spot zoning is whether the requested use is significantly different than the prevailing use in the area. The requested use is different than the prevailing single family use in the area, however the Planning staff does not believe it is significantly different than the prevailing use. More recent court cases on illegal spot zoning have not made a fine distinction between the allowable development densities of residential zoning districts (Boland et al v City of Great Falls, 1995). In the Boland case, the City of Great Falls rezoned property from a single family zone to a multi-family zone and the neighbor’s appealed this as an illegal spot zoning. The Supreme Court held that the proposed zoning was not significantly different based on the differences in development density and found the proposed zone was therefore not significantly different from the surrounding single-family zoning.

The second criterion from the Little v Board of County Commissioners of Flathead County is whether the area for the requested use is small. This factor is more concerned with the number of benefited landowners rather than physical size of the property. The requested use only applies to the owner’s property of less than 1/4 acre and the physical area affected is rather small. However, given the decrease in building value, and the “upside down” land to building ratio, a re-zoning may benefit more than the individual owner of this property. The re-zoning would remove the risk to investment in the building and would likely improve regular maintenance and improvements to the property.

The third criterion is whether the zoning is designed to benefit only one landowner at the expense of the surrounding property owners or the general public. The re-zoning does benefit one land owner however, as noted above, the land to building ratio should be improved once the investment risk is reduced. The surrounding market values may be beneficially affected by the new zoning.

The Zoning Commission conducted a public hearing on December 6, 2011, and received the Planning staff recommendation and testimony from the applicant, Mark Dawson, and the agent, Marshall Phil of Blueline Engineering. No other testimony was received. The Planning staff did not receive any written testimony, with the exception of the letters of support received and included in Attachment D, or phone calls from surrounding property owners.

Mr. Phil stated the applicant reached out to the surrounding owners this year to explain the need for the zone change and several of those owners sent in letters of support. Mr. Phil stated the applicant will not change the existing use but if the zoning is changed, he will invest in the property and eventually llive in one side of the duplex and may sell or rent the other unit. Mr. Dawson testified he anticipates bringing the property up to townhome standards so each unit could have separate ownership. He stated the only way for his purchase to be financed now is with his own capital through a contract for deed. He stated if the zoning is approved he could get conventional financing and make improvements to the property. He stated the existing zoning prevents him from making more improvements to the property - it is too risky at this time. He stated if the zoning is approved he would put his current home on the market and move in to one of the units when his home sells.

Commission member Edward Workman moved to forward a recommendation of approval to the City Council. The motion was seconded by Commission member Dan Wagner and the Commission voted 5-0 in favor of the motion.

The Planning Division reviewed the application and recommended approval to the Zoning Commission based on the attached twelve (12) criteria for zone changes. The Zoning Commission concurred with this recommendation. Illegal spot zoning is not one of the twelve review criteria for zone changes required by Montana law and local zoning regulations. A court may determine whether an illegal spot zoning has occurred and reverse a zoning decision based on this determination. The subject property is surrounded by R-96 and the proposed zoning is compatible with the surrounding zoning and neighborhood character. Several letters of support have been submitted by the surrounding property owners. The existing 2-family dwelling pre-dates the May 1972 zoning and if continued in its current legal nonconforming status may erode surrounding property values due to dis-investment in maintaining or improving the dwelling.  The surrounding properties are primarily single family dwelling although there are 3 two-family dwellings within the immediate area. The 2008 Growth Policy encourages predictable land use decisions that are consistent with neighborhood character and land use patterns. The existing use and proposed zoning are consistent with this neighborhood and land use pattern.
Prior to any action to approve or disapprove, the City Council will consider the recommendation of the Zoning Commission and shall consider the following:

1. Is the new zoning designed in accordance with the Growth Policy?
The proposed zone change is consistent with the following goals of the Growth Policy:
• Predictable land use decisions that are consistent with neighborhood character and land use patterns. (Land Use Element Goal, page 6) 
The proposed zoning would permit an existing nonconforming use to continue in a single family residential neighborhood. The proposed zoning is not significantly different from the proposed zoning. The neighborhood was fully developed prior to the 1972 zoning. Removing the risk of the legal nonconforming use will allow the property to improve.
The proposed zoning is consistent with the surrounding character of the neighborhood. Three other properties in the immediate area have been developed with attached dwelling units.
• The proposed zone does not meet the three tests for creation of an illegal spot zone.
1. The requested use is not significantly different than the prevailing use in the area.
2. The area requested for the use is small in area.
3. The requested zoning benefits this owner but also provides benefit to the surrounding owners by allowing regular maintenance of the building and improvements.

2. Is the new zoning designed to lessen congestion in the streets?
There should be no effect of traffic congestion. The 2-family dwelling is an existing structure and no increase in dwelling unit density is proposed.

3. Will the new zoning secure safety from fire, panic and other dangers?
The subject property is currently serviced by City Fire and Police. No change to the existing use is proposed that would affect public safety.

4. Will the new zoning promote health and general welfare?
The proposed zoning would permit a 2-family dwelling to continue in perpetuity in a single family neighborhood. The surrounding property values may be positively affected by zone change. The Unified Zoning Regulations do specify minimum setbacks and lot coverage requirements for the proposed zoning district in order to promote health and safety.

5. Will the new zoning provide adequate light and air?
The proposed zoning provides for sufficient setbacks to allow for adequate separation between structures and adequate light and air.

6. Will the new zoning prevent overcrowding of land?
The proposed zoning, like all zoning districts, contain limitations on the maximum percentage of the lot area that can be covered with structures.  The R-96 and the proposed R-70 zone allow 30% lot coverage. The proposed site plan does not increase the foot print of the existing building. 

7. Will the new zoning avoid undue concentration of population?
The new zoning does avoid undue concentration of population. The R-96 zoning only allows single family homes on a minimum lot size of 9,600 square feet. The proposed zoning would allow 2-family dwellings on a lot of at least 9,600 square feet. The 2-family dwelling exists and there is no proposed increase in dwelling unit density. 

8. Will the new zoning facilitate the adequate provisions of transportation, water, sewerage, schools, parks, fire, police, and other public requirements?
Transportation: The proposed zoning will not impact the surrounding streets. 
Water and Sewer: The City will provide water and sewer to the property through existing lines.
Schools and Parks: School District #2 will provide education to students that may live on this parcel. There should be no impact to school census from the proposed zone change.  
Fire and Police: The subject property is currently served by the City of Billings fire and police departments. 

9. Does the new zoning give reasonable consideration to the character of the district?
The proposed zoning will permit a legal nonconforming use – a 2-family dwelling, to continue within an existing single family residential neighborhood. Three of 105 surrounding properties within 600 feet have also developed as a 2-family or triplex dwellings. All of the surrounding zoning is R-96 with the exception of the Poly Drive Elementary school (zoned Public). The character of the neighborhood is single family and two-family dwellings. The proposed zoning does give reasonable consideration to the character of the district.  

10. Does the new zoning give consideration to peculiar suitability of the property for particular uses?
The subject property is suitable for the requested zoning district. While most surrounding property is developed for single detached dwelling the property has supported the two-family dwelling for 55 years and the lot is over 9,800 square feet in area. 

11. Was the new zoning adopted with a view to conserving the value of buildings?
Surrounding residential property to the north, south and east have much higher taxable value for buildings than this property. The taxable value of the land at 2302 Meadowood Street is 58 percent greater than the building value (2009 reappraisal) It appears from the exterior photographs of the dwelling that regular maintenance has been deferred on the structure. This is likely due to the inherent risk associated with a legal nonconforming use. At any time, the investment may be damaged or destroyed without the possibility of rebuilding under the current zoning. The proposed zoning of R-70 would preserve the right of the owner to re-build a 2-family dwelling so the investment on the part of this owner could be preserved. The value of surrounding property may be positively affected by the proposed zoning.

12. Will the new zoning encourage the most appropriate use of land throughout such county or municipal area?
The proposed zoning will permit the current two-family dwelling to continue and allow improvements to the building.