A building permit cap limits the number of building permits that may be issued for a given type of development in a given year. The cap is usually imposed by a town or city bylaw or ordinance, but the number of permits may vary from year to year, through a vote of the municipal legislative body, based on variables such as adequacy of water supply, sewerage plant capacity, school population, and others.

Building permit caps are a variation on the concepts used for moratoria. The difference is that while a moratorium is a “one time” temporary prohibition of a particular kind of land development for a relatively short period of time, building permit caps are a long-term approach and utilize an annual limitation on a particular type of development. For example, a town could use a building permit cap to limit the number of building permits issued per year for single-family residential units over the next ten years. Depending on the rationale for the cap (overcrowding of the school system, for example), the cap might not apply to apartment buildings, one-bedroom condominiums, assisted living housing, senior citizen complexes, or other residential development not expected to generate substantial numbers of school children.

Oftentimes, building permit cap provisions phase in over time. Using the residential example above, a town could set a limit of 15 building permits for the first year, 20 for the next, 25 the next, and so forth. Like moratoria, building permit caps usually take the form of an ordinance or by-law passed by a town/city legislature, or a county entity, or special act by a state legislature. Additionally, like moratoria, in states that do not have a specific building permit cap/moratorium statute, courts would use the test of “reasonableness” in deciding if the term, limits and public interest rationale of a building permit cap are fair. So, building permit cap resolutions need to have the same list of good, solid reasons as moratoria to justify that the building permit cap provision is needed, and the proposed study (if proposed) is required for important governmental reasons (see “Moratoria” section).

Rationale

Building permit caps are put in place usually as a component of a larger growth management strategy. A building permit cap is primarily intended to slow the rate of new development, either permanently, or to give the municipality time to improve the infrastructure (build the sewer treatment plant, for example); or to give the municipality time to study the full implications of particular growth on town services, infrastructure, taxes and quality of life. In other words, like moratoria, building permit caps can be used to allow government entities to plan for a more stable development environment in which to study issues or address problems that are either inadequately addressed in existing regulations or not addressed at all.

The most likely justifications for a building permit cap in the Wal-Mart context would be the inadequacy of a region’s transportation infrastructure to support the particular traffic and congestion impact a Wal-Mart store will produce; or the excessive demand Wal-Marts make on a town/region’s resources (water/sewer capacity, for example). Other justifications could include dangers to the public health, safety and welfare caused by pollution, destruction to quality of life, or impacts on community character or economic stability.

Actual Examples

NOTE: The following real life example is of a building permit cap utilized in the residential development context. As discussed above, the majority of building cap provisions are utilized in this context. Still, it is fairly easy to see from the attached real life example how it could be tailored to address Wal-Mart development in a particular area.

General Building Cap Ordinance, Barnstable, MA View PDF

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