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How Much Deference Do Zoning Ordinances Deserve?

BY Stewart E. Sterk
March 29, 2013

To what extent can a municipality's zoning ordinance distinguish among commercial enterprises, and what evidence must a municipality produce to justify distinctions among commercial enterprises? Those are the issues the Court of Appeals confronted in Sunrise Check Cashing and Payroll Services, Inc. v. Town of Hempstead (NYLJ 2/15/13, p. 23, col. 1). In striking down an ordinance prohibiting check-cashing ordinances in most zoning districts, the court implicitly suggested that a municipality's classifications are entitled only to limited deference.

The Facts and the Opinions

In 2006, the Town of Hempstead enacted an ordinance prohibiting check-cashing ordinances in all but industrial and light manufacturing districts. On the date of the public hearing on the ordinance, the town attorney prepared a memorandum indicating that the ordinance would encourage “young people and those of lower incomes to establish savings and checking accounts” and would eliminate “predatory and exploitative finance enterprises from commercial areas, which is beneficial because these enterprises tend to keep a neighborhood down.” The memorandum analogized check-cashing establishments to pawn shops and strip clubs. When the ordinance was enacted, several check-cashing establishments brought a declaratory judgment action.

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