Conditional Use Permits: a valuable tool, but not for the unprepared

can be a valuable tool in offering the flexibility to approve a project that may otherwise be barred by zoning restrictions

In nearly every sector across the State of New Hampshire, there is frequent discussion about the shortage of labor, driven in large part by a critical shortage of housing. According to the 2023 New
Hampshire Statewide Housing Needs Assessment, our state will need 60,000 more housing units by 2030, and nearly 90,000 housing units by 2040. Along with the significant need for housing units comes the need for services to support those households – think grocery stores, schools, gas stations, medical offices, and childcare facilities. While this situation creates ripe demand for developers, it also creates significant conflicts with stale zoning ordinances.

Enter the Conditional Use Permit, commonly called a CUP, which is enabled by RSA 674:21, II and can be a valuable tool in offering the flexibility to approve a project that may otherwise be barred by zoning restrictions. The CUP allows for a give and take between uses of right and those prohibited by ordinance. The CUP has grown in popularity when an innovative project is
beneficial, essential, or desirable to a community, but when the nature of the use or improvements necessitates more special considerations or mitigation to manage community concerns. The CUP is able to strike a balance between these competing concerns. When a CUP is granted, the project is approved, but the municipality can, and typically does, make that approval contingent upon satisfaction of certain conditions. In this way, the CUP authorizes the use, which allows a proposed project to move forward, while placing guardrails around the project, which can give greater
municipal control or safeguards to community concerns.

RSA 674:16 and 674:21 work in conjunction to authorize and enable a municipality to adopt a zoning ordinance that incorporates innovative land use controls, including the granting of a CUP. Once adopted, CUP provisions and processes operate like other forms of discretionary relief. Typically, the zoning ordinance will contain a table of uses that specifically designates which uses are allowed by right, authorized through CUP, or prohibited. The ordinance will also include a list of criteria that must be satisfied in order to secure the CUP. To obtain a CUP, an application
is submitted to the appropriate municipal board, demonstrating why the CUP criteria are satisfied, followed by a public hearing, deliberation, and decision.

The notable distinction between a zoning variance and a CUP is the variability of criteria and which municipal body may decide on the application. By statute, a CUP may be administered by a planning board, board of selectmen, zoning board of adjustment, or any other person or board the ordinance designates. As with all land use permits, an attorney is wise to consult with the specific zoning ordinance to determine the process, criteria, and municipal body that will govern a CUP in a given municipality.

So, what are the benefits of the CUP? The obvious advantage is that a developer facing an obstructive ordinance has the opportunity to demonstrate mitigation approaches and compatibility with the surrounding neighborhood. In turn, developers have more leeway to select properties that are well-suited for a project, without an absolute distinction between permitted and prohibited uses.
Although an ordinance may designate any municipal person or body to administer the CUP, anecdotally, this task is most often assigned to the planning board. Many municipalities utilize a streamlined process, where an applicant can jointly seek approval of subdivision, site plan, and a CUP through simultaneous applications and one hearing process before the planning board. This can create a significantly shorter timeline than the traditional approach, where an applicant was required to appear before the ZBA for zoning relief, then the planning board for subdivision or
site plan approval. This one-stop approach also manages exposure to NIMBY input on potentially controversial projects and consolidates considerations before one board.

However, no land use tool is a golden ticket, and there are some drawbacks to the discretion incorporated into a CUP. The statutes are clear that a municipality may adopt standards to grant a CUP, but the statutes are silent as to what those standards should be. The result is a wide range of criteria from one municipality to the next. Some municipalities have very cursory criteria to obtain a CUP, such as requiring a project to be in the public interest and to not pose health or safety concerns.

Conversely, other municipalities have very robust criteria to obtain a CUP, ranging from impacts on municipal resources, landscaping of sufficient opacity, consistency with neighborhood architecture, the degree of lighting compared to other permitted uses, and preservation of natural, cultural, historic, and scenic resources (just to name a few). This means that the likelihood of success in obtaining a CUP can vary widely based on the municipality you are in, the criteria being assessed, and the relative sophistication of the municipal process.

Perhaps the greatest drawback of the CUP comes from its discretionary nature. While the flexibility of a CUP can be instrumental to obtaining approval for a project that may otherwise be blocked,
that same flexibility puts significant power in the hands of the municipal authority. Again, the statutes are clear that a municipal authority may qualify its approval on the satisfaction of certain conditions, but the statutes are again silent about what those conditions may be. This affords the municipal authority with broad latitude to scrutinize applications or impose conditions on its approval, which have the potential to be burdensome if not impossible for some developers and projects.

The takeaway in all of this is that the CUP is a worthwhile tool to add flexibility in the early stages of project development. For many projects in many municipalities, the availability of the CUP can
open the door to next steps. However, an attorney should be diligent in assessing a municipality’s CUP criteria, and the nature of community conversations surrounding a project, to ensure that a project is not facing an eventual denial and insurmountable conditions.

This article originally appeared in the May 2024 issue of New Hampshire Bar News.

Ari Pollack represents business, construction, land use development, and environmental clients on a variety of land use permitting, development, environmental, and litigation matters. Ari continues to be selected by his peers for inclusion in The Best Lawyers in America for Concord, New Hampshire for Real Estate and Land Use and Zoning Law and Litigation. He has also been listed in Concord by Super Lawyers for Land Use/Zoning since 2016.

Emily Goering represents business, construction, land use development, and individual clients in both transactional and litigation matters. Emily has a particular focus in property disputes, land use permitting, development, and eminent domain.