Zoning variances are exceptions from zoning regulations, allowing property owners to use property in a desired manner even if the use is technically prohibited by local zoning ordinances. For over twenty years, municipalities were given considerable flexibility to grant zoning variances.  A year ago this June, that latitude was substantially restricted by the Minnesota Supreme Court’s interpretation of Minn. Stat. § 462.357 in Krummenacher v. City of Minnetonka.  This May, the Governor signed a bill amending Minn. Stat. § 462.357 to restore municipal authority to grant variances.

Prior to the Krummenacher decision, Minn. Stat. § 462.357 allowed municipalities to grant variances if the property owner demonstrated an “undue hardship.”  In order to establish an undue hardship, a property owner had to demonstrate three things:

  1. the property could not be put to a reasonable use;
  2. the circumstances were unique to the property, not created by the landowner; and
  3. the variance would not alter the essential character of the locality.

Since 1989, the Minnesota Court of Appeals has interpreted the reasonableness component of the undue hardship standard as whether the proposed use would be reasonable, even if the use was not allowed by the ordinance. This provided municipalities the flexibility to consider variances according to a property owner’s individual circumstances.

In June 2010, the Minnesota Supreme Court overturned 21 years of precedent by requiring a literal interpretation of the reasonableness component of the undue hardship standard - whether the property could be put to a reasonable use without the variance. Since it is a rare case where property cannot be put to some reasonable use without a variance, the Court’s decision instituted an essentially insurmountable threshold for municipalities to grant variances.

The new amendment to Minn. Stat. § 462.357 addressed the Minnesota Supreme Court’s decision by changing the standard from undue hardship to “practical difficulties.” The practical difficulties standard is defined as:

  1. the property owner proposes to use the property in a reasonable manner;
  2. the circumstances are unique to the property, not created by the landowner; and
  3. the variance will not alter the essential character of the locality.

In short, the amendment reinstated variance law to how it had been interpreted for the last 21 years. The practical outcome to property owners is that it has allowed real estate projects being delayed by the inability to receive variances to move forward. The law went into effect on May 6, 2011 and applies to all pending and future variance applications.