Articles Posted in Real Estate

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With the U.S. economy appearing increasingly likely to enter a recession in the coming months, many real estate developers may face obstacles in completing projects. If demand in the real estate market drops and economic activity contracts, many development projects that may have been profitable in the past will no longer be economically feasible. Some developers will hold off on their projects until the economy improves. A Rhode Island Superior Court recently ruled on a case filed by a developer attempting to resume development on a parcel of land that had stalled after the 2008 recession.

According to the facts discussed in the appellate opinion, the plaintiff is a developer who sought approval in 2007 to construct a mixed-use residential/commercial complex in the town of Tiverton. In 2008, the plaintiff gained the town’s approval for construction. After the 2008 real estate crash the project was no longer feasible, and the developer sat on the property for 14 years. In 2020, the plaintiff sought to resume the project and sought additional approvals from the town.

The town zoning board rejected the plaintiff’s 2020 application, pointing to the fact that new regulations concerning stormwater would require significant changes to the plaintiff’s plan, which must then go through more strenuous steps for approval. The plaintiff appealed the ruling to the administrative board of appeals for the town, which upheld the decision. The plaintiff then appealed the rulings to state court, arguing that the town was acting arbitrarily and capriciously by denying their request without justification. Specifically, the plaintiff argued that the town’s regulations were not in accordance with Rhode Island state law, which required towns to publish and apply consistent factors in making a zoning determination.

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Rhode Island has enjoyed a growing economy over the last several years. As cities and towns grow and development fill in the spaces of our small state, municipalities sometimes must compete with one another to encourage companies to choose their town for construction and development. Rhode Island law allows municipalities to offer tax exemptions to certain approved development projects in order to make their location more desirable. The procedures for issuing such tax exemptions can be the subject of conflict between developers and municipalities, as evidenced by a recent case decided by the Rhode Island Supreme Court.

According to the facts discussed in a recently published appellate opinion, the plaintiff owns a large parcel of property within the boundaries of the town of Lincoln, which is the defendant named in the case. The plaintiff obtained preliminary approval for a development plan on the property to build over 200 homes, some of which would be classified as “affordable housing.” To make the plaintiff’s plan financially feasible, the plaintiff would need a tax stabilization agreement from the town of Lincoln.

Based on a 2003 law that gave the town council the right to approve such a tax stabilization agreement for affordable housing projects, the plaintiff submitted a proposal from the council for a tax agreement. The town council refused to consider the plaintiff’s request, claiming that such a request would require approval from the Financial Town Meeting, which is a group of citizens that meets once per year to make economic decisions for the town. The plaintiff disputed the defendant’s claim that the tax agreement needed to be approved by an FTM, pointing to the 2003 law that expressly gave the town council the right to enter into such agreements.

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Rhode Island’s economy has strengthened over the last few decades, and the economic growth that accompanies such an economy requires various land uses to support economic development. Municipal zoning boards are tasked with determining if and how a certain construction or development project should be approved. Municipal zoning boards need to consider various interests when deciding whether to approve a request for construction or development, however, the boards’ discretion is limited by the ordinances that they are obliged to enforce. The Rhode Island Supreme Court recently affirmed a lower court’s decision that had rejected a town’s bid to stop the construction of a solar energy system within the municipal boundaries.

According to the facts discussed in the appellate opinion, the plaintiff, a solar power company, had leased a parcel of land in the town of Richmond for the purposes of constructing a solar energy system. In order to construct the system, the plaintiff needed to obtain a special use permit from Richmond’s zoning board. The town had passed an ordinance that explained the requirements for such a special use permit, which included the requirement that a “utility substation” was within 2 miles of the proposed project. The plaintiff presented evidence that a utility substation that met the requirements and was operated by Amtrak was within the two-mile requirement.

After several recesses and discussions, the town zoning board denied the plaintiff’s request for a special use permit, finding that the Amtrak substation was not a “utility substation” within the meaning of the ordinance. A controlling number of members of the zoning board ruled that the ordinance required a utility substation to be operated by the power company in order to qualify as a utility substation for purposes of the plaintiff’s requested construction project.

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Municipal housing authorities in Rhode Island have been established to support the greater public good by protecting residents’ ability to live in affordable and safe housing. Because these administrative authorities are acting in furtherance of the public interest, state laws are designed in ways to allow public housing authorities to take possession of private land using the powers of eminent domain. Private property owners who have land taken from them by a public housing authority are entitled to compensation for the fair market value of the property. The exact amount of compensation that a landowner should receive from the government as part of an eminent domain proceeding is often a source of conflict. The Rhode Island Supreme Court recently ruled in favor of a landowner’s challenge to the compensation he was awarded when his property was seized by eminent domain.

The plaintiff in the recently decided case was the owner of a subdivision-sized tract of land near Providence. After constructing a home for his family on part of the land, the plaintiff sought to divide the remaining land into eight lots. Before the plaintiff started development, he was notified by the Providence Public Buildings Authority (the defendant in the case) that the municipality was seeking development rights over the undeveloped portion of the plaintiff’s land in order to build affordable public housing.

The Rhode Island General Laws outline the procedures for a public housing authority to seek development rights for private land, and in accordance with those procedures, the parties retained appraisers to determine the value of the land. After the defendant’s appraisers submitted a valuation for the development rights of the land, the plaintiff sought to compel the defendant to purchase the land outright. Although the statute allowed a property owner to demand an outright purchase, the trial judge denied the plaintiff’s request, finding that it was made too close to the date of trial, and would be unfair to the defendant. At a trial on the valuation, the judge accepted the defendant’s appraisal numbers and ordered the plaintiff to be paid approximately $500,000 for the development rights of the undeveloped property.

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The Rhode Island state government, as well as municipal governing bodies in the state, delegate many functions to administrative agencies to streamline the administration of government. Unlike legislative bodies or courts, which enact and interpret the law, administrative agencies are tasked with enforcing the law as written. Administrative agencies are heavily used in Rhode Island to determine permissible land use by residents and businesses. Zoning boards, natural resource councils, and permitting agencies are all used to determine who can develop Rhode Island properties and how.

If an administrative agency makes a determination that is not in accordance with the law, the aggrieved party has the right to appeal the decision to the state court to examine whether the decision is supported by the law. The Providence division of the Rhode Island Superior Court recently rejected an administrative agency’s denial of a plaintiff’s proposed development of a shellfish farm on coastal Rhode Island.

The plaintiff from the recently decided case is a private citizen who submitted a proposal to the defendant, which controls the permits for coastal Rhode Island. According to the facts discussed in the ruling, the plaintiff proposed a small non-commercial shellfish farm, which would be used partially as an educational resource to teach children about shellfish and shellfish cultivation in Rhode Island. The defendant, which consisted of a board of eight members, held a public hearing on the plaintiff’s proposal, where the plaintiff, as well as supporters and opponents of the proposal, presented their case to the board.

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The recent rise in the popularity of sustainable and local agriculture has resulted in an increase in the number of chickens and other poultry that are being raised on residential properties in the last decade. Rhode Island state law allows for residents to raise poultry on their property, so long as the municipality and property owner permits it. Not all Rhode Island residents support broad permissions for others to raise livestock on their residential property. A locally published news report discusses an elderly Rhode Island couple’s attempts to enact an ordinance in their town to address the nuisance caused by their neighbor’s chickens and turkeys.

According to the local news article discussing this story, the couple has lived in their South Kingstown home for over 45 years, and the neighbors with the birds moved in about 3 years ago. The two neighbors share a driveway, and shortly after the new neighbors arrived, they began to raise chickens and turkeys. The elderly couple noticed that their neighbors’ chickens and turkeys were entering their property, digging around the ground, and leaving feces and other messes. Additionally, the birds were loud and at times threatening, even causing the couple’s dog to injure itself when attempting to scare the birds off.

The couple has sought help from the local police department to address the nuisance, but the police are unable to help. The couple instead went to the city council and the media to drum up support for regulations or a ban on residential poultry husbandry. According to the news report, some council members are resistant to the ban, because of the economic benefit of allowing people to raise poultry on their land.

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Property insurance policies are contracts entered into between an insurance company and an insured party. These contracts are usually drafted by the insurance company, and often contain provisions that appear innocuous but are included to benefit the insurance company at the expense of their client. The tremendous economic damage caused by the Covid-19 pandemic has resulted in a nationwide deluge of insurance claims, filed by property owners attempting to recoup some of the pandemic-related losses. When an insurance company denies a Covid-19 related claim, the client may pursue a civil claim against the company to enforce the insurance policy. A Superior court in Providence, Rhode Island recently heard a real estate company’s claim against their insurance company.

According to the facts discussed in the recent ruling, the plaintiff in the recently decided case is one of the largest privately-held real estate investment companies in the world. The plaintiff’s business includes the leasing of residential, commercial, and industrial properties in Rhode Island. The plaintiff entered into an insurance contract with the defendant to cover several properties they owned in Rhode Island. After the arrival of the Covid-19 pandemic, the plaintiff was unable to keep many of their properties occupied and lost a substantial amount of income as a result.

Based on their losses, the plaintiff made a claim with the defendant, demanding that the defendant honor the insurance contract because the “physical damage” done by the SARS-COV-19 virus was what resulted in their loss. The defendant denied the plaintiff’s claim, noting exclusions in the plaintiff’s policy that limited the covered losses resulting from communicable diseases or contamination. After the defendant rejected their claim, the plaintiff filed a suit in Rhode Island state court.

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Rhode Island zoning laws and regulations are designed to allow property owners and residents the most freedom in developing their properties while protecting neighbors, the public, the municipality, and the environment from the possible effects of development. As the culture and economy of coastal Rhode Island develop, some zoning laws and requirements are functioning to prevent property owners from making the best use of their land.

New homes along the Rhode Island coast have been getting larger and larger, as the housing market solidifies. Many coastal areas are shifting from seasonal “vacation home” occupancy styles to year-round habitation. Because of these changes, many of the zoning requirements for construction do not allow for the construction that property owners may desire. The Rhode Island Supreme Court recently published a ruling on an appeal filed by a coastal property owner whose construction plans were denied by the municipal zoning board.

The plaintiff in the recently decided case has been the owner of two adjacent small lots in the town of Narragansett for several decades. According to the facts discussed in the appellate opinion, the plaintiff sought permission from the town to build a home that spanned the two small lots. The plaintiff’s proposed construction would not be permitted by the zoning laws in effect at the time, so the plaintiff requested that the town approve special use permits in order for the construction to proceed. The town rejected the plaintiff’s request, finding that the plaintiff’s requested exemptions from zoning requirements would negatively affect the neighborhood and that the requested house was simply too large for the lot.

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The arrival of the Covid-19 pandemic sparked a shift in real estate markets nationwide, with smaller, satellite cities and regions attracting workers from larger cities. Workers with remote work opportunities sought to move to areas with less expensive real estate and a lower cost of living, as the remote work revolution that accompanies pandemic life made living in large cities less desirable.

The real estate market in Rhode Island has been significantly affected by this phenomenon, as our proximity to New York, Boston, and other New England economic centers makes Rhode Island a desirable destination for remote work. In addition to the remote-work immigrants who are moving into our state, Rhode Island is also seeing an influx in wealthy people who are purchasing luxury properties at historic prices. A recently published news report discusses this phenomenon and the effects it will have on the Rhode Island real estate market as a whole.

The recently published report focuses on the effects on the luxury residential real estate market in Rhode Island. According to the report, over 700 homes in the state sold for over $1 million in 2021, with over half of those sales to out-of-state or international buyers. The article notes that although Rhode Island is situated near financial centers such as the NYC metropolitan area and Boston, real estate has been undervalued in the state for decades, and prices are catching up. According to sources cited in the article, the median price of a single-family home in Rhode Island rose by over 14% in 2021.

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Municipal zoning regulations are often developed as a means to protect present property owners and residents from changes that could negatively affect the value of their property or the character of the neighborhood. Often zoning regulations can be used to ensure that a neighborhood only includes residential property or only single-family units. While zoning regulations can be effective at preventing low-density neighborhoods from becoming too dense and crowded, the regulations often serve to prevent developers from constructing affordable housing units. A recently published local news report discusses how zoning regulations in Pawtucket are making it difficult to address the state’s affordable housing crisis.

The recently published news report discusses the efforts of a nonprofit organization that was founded to help foster children find affordable housing after they age out of foster care. Because foster children who age out of foster care are often looking for a small studio or one-bedroom units at an affordable price, single-family housing is not always a feasible option. The organization featured in the article sought to purchase single-family homes and divide them into multiple apartments for their clients. According to the news report, the organization purchased a building that was converted into four separate units, which could house between 8-10 people. Unfortunately, the municipal zoning board rejected the organization’s proposal to occupy the fourth unit, as there was not sufficient parking available to meet zoning requirements.

The zoning requirements at issue demand that each residential unit has two parking spots of off-street parking available. Although it is important to make sure that there is parking available for residents before allowing them to move in, the article notes that the application of this particular requirement is counterproductive. Of the 10 people that would live in the proposed new building, 6 spots are available, and only two spots appeared to be needed. By requiring two parking spots for each unit, the law is preventing people who don’t even own a vehicle from finding housing. To address this problem, municipal zoning boards are being encouraged to update the over 30-year-old zoning codes that require so much parking. People seeking new construction or renovations can also petition the zoning board for a variance or exception to approve a proposal that doesn’t meet the zoning requirements outright.

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