The New Levelers
A state judge reinterprets an old law to force a developer to demolish his building.
A state judge has revoked, retroactively, a building permit at 200 Amsterdam on Manhattan’s Upper West Side. If the decision holds, the developer might have to lop off almost half of the 668-foot tower. The Municipal Art Society and other opponents of “super-tall” buildings are elated. But Judge W. Franc Perry’s ruling is likely not only wrongheaded but also a threat to basic fairness and legal predictability.
The problem: the developer received his building permit under an official guidance on the definition of zoning lots dating to 1978. That guidance may have been in error—the Department of Buildings (DOB) has since drafted, but not yet adopted, a new policy—but developers built 28 other buildings since 1978 in reliance on it. The 200 Amsterdam developer followed the rules, applying for and receiving a building permit in 2017 based on the city’s official view of the law. After dozens of prominent politicians protested, the DOB recanted, saying that its 1978 view was mistaken.
Is it fair or sensible to enforce the DOB’s new view of the law against a developer who has invested hundreds of millions of dollars in reliance on the DOB’s old view? The Board of Standards and Appeals (BSA), the city agency in charge of interpreting the 1978 Zoning Resolution, argued that such a retroactive enforcement of a new interpretation against someone who took the DOB at its word was unjust. Judge Perry disagreed. He ruled that the BSA had no power to avoid such retroactivity. If the old view of the law was wrong, then the correct view must be enforced—against everyone.
This ruling, however, ignores the BSA’s discretion to decide that a new view of the law should be enforced only prospectively, “grandfathering” in those who had made commitments based on the old understanding. Perry cited precedents stating that the government is not bound to follow its past mistakes. True enough—but the government is also not required to ignore the interests of people who relied on those mistakes. The decision about retroactive enforcement of a new interpretation is a matter for an agency to determine as a matter of policy, not for a judge to dictate as a matter of law.
One could take the stern view that neither the DOB nor the builder nor the BSA is entitled to ignore the plain text of the Zoning Resolution—except that the Zoning Resolution’s definition of “zoning lot” is about as clear as a chocolate milkshake. The resolution defines a “zoning lot” as “a tract of land, either unsubdivided or consisting of two or more lots of record . . . located within a single block.” According to Judge Perry, this text “plainly” defines “lots of record” to mean undivided “tax lots,” a distinct term in the Zoning Resolution, because the word “unsubdivided” would otherwise become redundant. Though I taught statutory interpretation at NYU Law School for 15 years, I found it challenging to parse this language. How, exactly, does “unsubdivided,” which modifies “tract of land,” shed any light on “lots of record”? The idea that the meaning of these statutory tea leaves is “plain” enough to require a developer to reject the DOB’s contrary official opinion defies common sense.
What can explain Judge Perry’s rigidity in forcing the BSA to enforce what amounts to a new rule retroactively against the developers here? Beyond the specifics of this case, state judges have lately been showing a troubling willingness to undermine the concept of “as-of-right” development. The essence of developing “as-of-right” is that builders can build whatever they like, in accord with zoning regulations. If the neighbors don’t like what those regulations allow, they can try to change them, but they can’t enforce the new rule against permits issued under the old one.
Technically, Judge Perry retroactively enforced only a “new interpretation,” not a “new law.” But where the law is so unclear and the interpretation so well established, this technicality seems paper-thin. By declaring, in effect, that the BSA must chop a building in half to comply with the newest reading of the Zoning Code, Perry is inviting neighbors to contest every “as-of-right” determination, enlisting politicians to “work the refs” and devise newer, more restrictive interpretations of zoning rules under which the initial building permits were granted.
It is even more concerning that Justice Perry’s decision is not an outlier. Last July, for instance, Justice Arthur Engoron forced the Two Towers’ proposed development into the approval process required for discretionary land use, though that proposal complied with the underlying zoning. Complaining that the proposed buildings are “huge towers,” Justice Engoron declared: “I’ve lived in the city my whole life. You can’t just do this because the zoning allows it.”
Actually, you can. Doing what the law allows is exactly what rule of law means. Perry did not disclose an anti-development bias as blatantly as Engoron, but his decision, too, is a blow to the rule of law, to the extent that it sideswipes developers with retroactive interpretations. For the sake of predictability, then, we can only hope that the appellate division overturns him.
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