The Pennsylvania Supreme Court recently handed down an opinion of great interest to anyone who owns a vacant property or is considering purchasing one that may be characterized as blighted by the city of Philadelphia. On Sept. 13, the court issued Rufo and TR Gertz (owners) v. Board of License and Inspection Review and Philadelphia (No. 22 EAP 2017). The Philadelphia Court of Common Pleas and the Commonwealth Court held that an ordinance referred to by the parties as “the Windows and Doors Ordinance” was an unconstitutional exercise of the city’s police power to combat urban blight. Both courts found that the Ordinance concerned a matter beyond its power—regulating the aesthetic appearance of vacant buildings—as opposed to addressing safety risks posed by blight. Our Supreme Court reversed.
The owners found themselves in a precarious position due to noncompliant windows and doors. After the city cited them for violating the ordinance, they filed an appeal with the Board of License and Inspection (board), alleging the subject ordinance violates their substantive due process rights.The owners claimed the purpose of the ordinance was to compel a property owner to make a property aesthetically pleasing, rather than safe, a purpose that is beyond the valid exercise of a municipality’s police power. The ordinance, in relevant part, requires the owner of any building, deemed a blighting influence, “shall secure all spaces designed as windows with windows that have frames and glazing and all entryways with doors. Sealing such property with boards or masonry or other materials … shall not constitute good repair or being locked fastened or otherwise secured pursuant to this subsection,” Section PM-901.2 (formerly PM-306-2).
A blighting influence (currently designated as a “blighting problem”) is defined as follows: A vacant building that lacks windows with frames and glazing and lacks one or more doors in entryways of the building if: the department has provided 20 days notice to the owner of the property that the commissioner of licenses and inspections has determined, in consultation with other city officials as appropriate, that the lack of windows or entry doors has a significant adverse influence on the community based on the following factors: deterioration and safety of the property; safety of the surrounding community; the value of intact, occupied properties in the surrounding vicinity of the property; marketability of the property; and community morale.
According to the court’s opinion, the subject property, former home to the Gertz Brewing Co., was purchased by the owners in August 2003 as a vacant property; it still remains vacant today. For reasons not discussed in the opinion, the owners were unable to clear the violations by either demolishing the structure or by obtaining a zoning permit to develop the property. At the 2014 Board of License and Inspection Review Hearing, owner Rufo’s son conceded that the property was and continues to be in violation of the former 306.2 Section of the code because 31 of its 40 windows failed to comply with the aforementioned mandates of PM-306.2 (now PM-901.2). The testimony of Rufo’s son illustrates the difficulties of compliance. Significantly, he noted that within two weeks of placing three new windows on the property, the windows were either broken or missing. He explained that masonry and steel were utilized to secure various doors and windows. He was asked whether he could place structural materials behind a window if he was concerned with people entering the building. He answered in the affirmative but also insisted that by putting windows and doors on the building in a matter consistent with the code, would merely invite squatters and vandalism. Finally, he noted that from 2003 through May 2014, he and his father had invested between $500,000 and $600,000 for maintenance purposes, although the opinion does not specify how much was actually dedicated to windows and doors maintenance.
The department’s policy and communications director for development testified that the city did not begin to enforce the ordinance until 2011, approximately seven years after its enactment. The testimony most germane to the defense of the city’s valid exercise of police power was its reliance on two studies: Vacant Land Management Philadelphia and Blight Free Philadelphia and the city council hearings attendant to the ordinance’s enactment. The director also referred to “numerous studies,” stating “it’s been determined, through numerous studies, that properties with boarded windows and doors without the actual operable window and door contribute to blight with the neighborhood.”
The board found no constitutional infirmity, accepting the director’s testimony as credible. It also stated in reference to Rufo’s son’s testimony, that the owners could install the code-compliant windows and doors with masonry behind them to address trespassing concerns. According to the opinion, the Court of Common Pleas, without taking new evidence, determined that aesthetics was the only rationale for the windows and doors ordinance, which is alone insufficient to sustain the ordinance as held by well-established precedent. The trial court found no evidence that demonstrated a causal relationship between safety and the ordinance, holding that the ordinance was impermissibly concerned with only aesthetic appearances. It cited the son’s testimony in reference to using boarding and masonry on windows and doors as sufficient to satisfy any violation. The city appealed this adverse ruling to the Commonwealth Court.
The Commonwealth Court, applying the rational basis standard, affirmed. It noted the ordinance “… must bear a real and substantial relation to the object sought to be obtained” and that …“it is axiomatic that any exercise of the police power… may not be grounded solely on considerations of aesthetics,” see Rufo v. Board of License and Inspection Review, 152 A. 3d 400, 403 (Pa. Cmwlth. 2016), quoting Redevelopment Authority of Oil City v. Woodring, 430 A.2d 1243, 1246 (Pa Cmwlth. 1981 (en banc), aff’d 445 A.2d 724 (Pa. 1982). The Commonwealth Court characterized the director’s testimony as conclusory and found the only study in the record, Blight Free Philadelphia, did not support the director’s testimony. It also noted that testimony from a 2002 city council hearing on the adoption of the ordinance, used to demonstrate that the purpose of the Ordinance was to remedy safety risks posed by blighted buildings, could not be considered as it was not included in the original record.
A comparison of the difference between the Commonwealth Court’s opinion and that of our Supreme Court is fairly striking. The city argued the Commonwealth Court erred by placing the burden of proof on the city and, somewhat boldly, that its holding undermined its ability to combat blight by substituting its own views as to the efficacy of the ordinance. On review, the Supreme Court began with addressing the burden of proof issue, agreeing with the city that it had no burden whatsoever. Nevertheless, our Supreme Court characterized the city as having presented a “robust and thorough” argument. Next, the court noted the presumption of an ordinance’s constitutionality, and the heavy burden of the party submitting a constitutional challenge. Next, it focused on the Commonwealth’s Court approach to the evidence, which essentially placed the burden on the city to demonstrate constitutionality. Instead, the operative focus should have been on whether the Owners had rebutted the presumption of constitutionality. Naturally, the thrust of the city’s argument on appeal was that the owners failed to prove the ordinance is not substantially related to its purpose of promoting public health, safety, and welfare by regulating the occupancy and maintenance of property in the city to reduce blight.
The Supreme Court easily sided with the city, in concluding that the owners failed to offer any evidence to rebut the presumption of constitutionality, and favorably cited to the director’s evidence. The court specifically held that the owners were unable to prove that the requirements under 306.2 were constitutionally infirm in fighting the safety and other blighting influences enumerated in PM-901.2. Indubitably, the city enjoys significant discretion in exercising its police powers and thus any challenge should be steeped in evidence that it is compelling in proving legislation is outside the bounds of a proper legislative purpose. In his concurring opinion, Justice David Wecht wrote, that although joining the seven-justice majority in full, he would employ the more deferential federal rational basis standard, one that does not require a law to be logically consistent in every respect with its aims in order to be constitutional. Nevertheless, the owners’ challenge was still credible, despite the Supreme Court having sided with the city on the issue of overcoming the presumption of constitutionality. As the trial court did not address the questions of vagueness and the fines being both excessive and confiscatory, the highest court remanded as to those issues only.
James M. Lammendola is an assistant professor at Temple University’s Fox School of Business who was in private practice for 20 years. He may be reached via email at email@example.com or telephone 215-204-4124.
Harper J. Dimmerman is an adjunct professor at Temple University’s Fox School of Business. He represents clients in various litigation and real estate law matters and he may be reached via email firstname.lastname@example.org or telephone 215-545-0600.