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Using a Development Moratorium Correctly

​South Carolina is growing fast. In some parts of the state, residents may feel that growth is happening far too quickly. That perception has led some municipalities to impose moratoria on at least some types of new construction. Although imposing a moratorium is a useful tool to pause the pressures of new development, there are guidelines that councils should follow in imposing them.

The most important rule is that a municipal council may impose a development moratorium only by ordinance. This rule arose from Simpkins v. City of Gaffney, a case in which the city council passed a motion placing a city-wide moratorium on the issuance of building permits or construction of duplexes and multifamily dwellings. The court reasoned that because the development rights arose under the city's zoning ordinance, the moratorium was effectively a suspension or an amendment of that ordinance. Under the so-called equal dignity rule, an ordinance may be suspended or amended only by a new ordinance.

Implicit in the Simpkins rule is the idea that a moratorium is supposed to allow council time to consider amendments or updates to the underlying zoning ordinance, not simply to stop development. Although the South Carolina courts have never explicitly established criteria for a valid moratorium, a leading case from Minnesota provides that a moratorium is valid if:

  • it is for the purpose of researching and implementing changes to the zoning ordinance or comprehensive plan,
  • it is of limited duration, and
  • the government acts promptly to research and implement such changes.

The best practices that have evolved in South Carolina are consistent with these guidelines. First, in announcing a moratorium, the council should specify that the purpose of the moratorium is to research and implement amendments to its zoning ordinance or comprehensive plan. The council should not simply declare a moratorium without also detailing what it intends to do during the pause.

Second, the moratorium should be of limited duration. There appears to be no strict limitation on what is a reasonable time period, but the consensus among practitioners is that six months is a presumptively reasonable length for a moratorium. Some ordinances also have included the ability for council to extend the moratorium a single time, by resolution, for no more than an additional three months. A longer period might be upheld, but clearly an indefinite or excessively prolonged moratorium would be invalid.

Third, once the council imposes a moratorium, it should promptly begin to research and implement the desired amendments to the zoning ordinance. If a frustrated developer were to challenge a moratorium, it seems likely that a court would not look kindly on a municipality that simply sat on its hands during the pause in development activity.

One question that frequently arises is whether, under the equal dignity rule, the council must follow the notice and public hearing requirements that apply to the actual amendments to the zoning ordinance. Neither the South Carolina courts nor the South Carolina Attorney General have addressed this question. The better interpretation, however, seems to be that the municipality is not required under state law to provide notice or public hearings before imposing a development moratorium. On the other hand, if the municipality determines during the moratorium to go forward with amendments to its zoning ordinance or comprehensive plan, then those amendments would be subject to the ordinary notice and public hearing requirements.