You may have heard that our community is dealing with a bit of a crisis surrounding the regulations around what are termed ‘non-conforming lots’. Just what is a non-conforming lot? And what’s the big deal?
A non-conforming lot, in any municipality, is a lot that does not meet the minimum size standards set forth in that municipalities’ ordinances. In Knoxville, specifically, a lot must be 60 feet wide and at least 7200 square feet to be considered a conforming lot. There has been a bit of discussion about whether or not that 60 feet of width must be at the street, and according to City Manager, Harold Stewart, it does not. So, for example, in the case of a pie-shaped cul-de-sac lot that is not 60 feet wide at the street, but does meet that width farther back in the lot, the lot is considered to be conforming.
This standard was set by the City Council in 1983, and at that time those lots throughout the city which were non-conforming (over 400 of them based on a recent count) were ‘grandfathered’ in; and any structures on those lots were allowed to stand, with the stipulation that any future structures on the lot are prohibited. Additionally any building lots platted after 1983, must conform to the minimum size standard.
The problem with non-conforming lots in general is that if the home which stands on one should be more than 50% destroyed by fire or other disaster, the owner will not be allowed to rebuild their structure. In the past, the city has been known to issue a re-build letter, granting a exception to the code, when a home built on a non-conforming lot is destroyed. This has been an infrequent occurrence, simply because the need for it has been rare.
So why is it suddenly an issue in Knoxville? The answer is a bit complex: On the one hand, there is a newer city administration that was given a clear directive by the City Council to enforce those laws and ordinances that are already on the books. They are taking this directive seriously, and have stated that they will adhere to the letter of the law, and do not foresee issuing any re-build letters on non-conforming lots.
But the biggest change has taken place in the banking industry. As banks and mortgage companies are faced with tightening regulations in the wake of the recent economic crisis, among many other changes, they have been paying more careful attention to local ordinances related to conforming lots. Some mortgage companies or government loan institutions will not finance a home on a non-conforming lot at all, or may require a bigger down payment for this type of property. Further, owners of non-conforming lots must often have an additional insurance rider on the property to cover rebuilding in a new location, should their home be destroyed and not allowed to be rebuilt in the same location.
What does this mean, practically? It means that if you own a home on a non-conforming lot, it may be more difficult for you to sell it. The issues that come with such a lot are a deterrent, in the first place; plus the pool of potential buyers is smaller when options like FHA or VA loans, or low down payment loans are ruled out. Further, loans on non-conforming lots are more difficult for banks to sell on the secondary mortgage market, which naturally makes the banks hesitant to loan on these types of properties.
If you have a non-conforming lot, it also means that you should make sure that you have insurance coverage for your home that will protect you even though your lot is non-conforming.
What can be done? The Realtors, bankers, insurance companies and the County Assessor recently brought this issue to the attention of the Planning and Zoning Board, the City Manager and Assistant Manager, and also alerted the local media. Our intent was to let people know that many of them had one of these lots, and that they need to take steps to be sure they are protected. We also felt that there are steps that can be taken by the city to amend the ordinance, to offer relief to owners of these lots, who are in many cases lower income or elderly residents living in small homes in older neighborhoods.
The City Manager and the Planning and Zoning Commission are now addressing the issue, and hope to be able to come to a quick resolution. As of earlier this week, Stewart told me that he has taken the research presented by the concerned Realtors and the County Assessor, including identification of non-conforming lots and the ordinances of several similar communities which address this issue, and has done his own research on the topic and has come up with a suggested plan that will be taken to a professional City Planner in Des Moines early next week.
Possible solutions include some combination of decreasing the minimum size of a conforming lot, allowing for rebuilds on those lots platted before 1983, within certain parameters, and adjustments to the ordinance.
We look forward to the City Planner’s recommendations, and to the city’s implementation of changes to the ordinance. In the meantime, you can check your lot’s dimensions on the Marion County Assessor’s Beacon website, and if your lot is smaller than 60 feet wide with a total of 7200 square feet, you may want to have a conversation with your insurance company!