Subdivision in the Intermountain West (Working Paper)

A Review and Analysis of State Enabling Authority, Case Law, and Potential Tools for Dealing with Zombie Subdivisions and Obsolete Development Entitlements in Arizona, Colorado, Idaho, Montana, New Mexico, Nevada, Utah, and Wyoming

Author(s): Trentadue, Anna and Chris Lundberg
Publication Date: April 2012

107 pages; Inventory ID WP11AT1; English

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Abstract

Over the past decade, the Intermountain West has experienced an unprecedented boom in speculative real estate development followed by a precipitous bust in housing and land values. "Zombie Subdivisions" now dot the landscape and continue to hamstring the fiscal health of cities and towns, ecosystem stability, property values, and quality of life throughout the West. As struggling developers lose title to their properties or seek to quickly unload their incomplete projects, many people now find themselves owning a parcel or lot in what was supposed to be a high-amenity development that does not exist. Cities and counties, struggling to service these far-flung subdivisions, are looking for ways to create more affordable growth scenarios.

In light of these challenges, is it possible to “undo” what has already been developed but is no longer supported in today’s markets? What are the rights and remedies for lot owners in defunct developments? Can local governments vacate development entitlements in these zombie subdivisions?

This paper assesses the potential tools available to tackle this problem by reviewing the state-by-state legal framework for development entitlements, subdivision platting, and the potential to vacate or amend these land entitlement instruments at various stages in the process. The scope of research includes the eight Intermountain West states of Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, and Wyoming. The enabling legislation varies greatly in each one of these states, creating unique laws, practices, and case law in these representative areas. The overall objective of this paper is to provide the legal context in each of these states while also highlighting a few illustrations of transferable best practices as well as unique opportunities and constraints that exist in a few states or local governments.