Planned Unit Developments, Zoning Flexibility, and Tangible Community Benefits

Planned Unit Developments (PUDs) have become one of the most flexible and powerful tools in modern land use planning. They allow municipalities to deviate from rigid zoning ordinances in order to accommodate projects that promise greater efficiency, aesthetic coherence, or community benefit. Yet the same flexibility that makes PUDs appealing can generate controversy—particularly when neighboring property owners question whether the departures from zoning rules are justified or lawful.

 

The 2016 Illinois appellate decision in Hanlon v. Village of Clarendon Hills illustrates this tension vividly. The case concerned a small downtown redevelopment project and raised questions about the duration of preliminary approvals, the discretion of municipalities in interpreting their own zoning ordinances, and the proper scope of judicial review when local governments condition PUD approvals on “tangible community benefits.”

 

Understanding the PUD Mechanism

 

At its core, a PUD is a negotiated zoning instrument. Unlike traditional zoning—where each district has fixed rules for density, setbacks, and use—a PUD allows developers and municipalities to craft a customized zoning arrangement for a specific site. In exchange for flexibility on the developer’s side (such as increased height, reduced parking, or mixed-use density), the municipality typically demands a set of “public benefits” that justify the deviation.

 

“Planned Unit Developments are a recognition that cities are organic, not mechanical,” said Hirsh Mohindra. “They allow communities to trade rigidity for creativity—so long as that flexibility serves the broader public interest.”

 

The concept of “tangible community benefits” underpins the PUD framework. These benefits can include public plazas, streetscape improvements, affordable housing units, green infrastructure, or economic revitalization in underused areas. The challenge lies in measuring such benefits and ensuring that they meaningfully offset the private advantages conferred by the zoning relief.

 

The Clarendon Hills Controversy

 

In Hanlon v. Village of Clarendon Hills, the village approved a PUD for a mixed-use development in its downtown district. The project proposed to revitalize a key commercial corner, including new retail and residential units. Several nearby residents, led by Hanlon, challenged the approval, alleging that (1) the preliminary PUD approval had lapsed due to inaction; (2) the final approval violated local zoning standards; and (3) the village acted unreasonably in granting certain departures without sufficient public benefit.

 

The plaintiffs’ central argument hinged on the lapse provision. They claimed that because more than a year had passed since the initial approval, the PUD had expired automatically under the village code. The village, however, maintained that extensions had been properly granted, and that its interpretation of its own ordinance deserved deference.

 

The appellate court sided with the village, affirming that municipal bodies enjoy significant discretion in interpreting and applying their zoning ordinances. The decision reinforced the longstanding judicial principle that courts will not substitute their judgment for that of local elected officials so long as the decision is not arbitrary, capricious, or without rational basis.

 

Deference and Reasonableness

 

The Hanlon court’s reasoning reflects the broader doctrine of administrative deference in land use law. When local governments make zoning decisions—particularly within flexible frameworks like PUDs—courts presume those decisions to be valid unless clearly unreasonable.

 

“Municipal discretion is not unlimited, but it is broad,” explained Hirsh Mohindra. “Courts recognize that zoning decisions involve a balance of competing local priorities—economic growth, traffic, aesthetics, environmental impact—and those are inherently local judgments.”

 

This deference is often misunderstood by citizens who view PUDs as loopholes or favoritism. In reality, the system is designed to give municipalities room to negotiate projects that would otherwise be impossible under traditional zoning. However, this power also carries the burden of transparency and accountability.

 

Tangible Community Benefits and the Zoning Bargain

 

Central to the legitimacy of any PUD is the “zoning bargain” — the idea that deviations from zoning ordinances must be justified by measurable community gains. The Hanlon case did not directly define the term “tangible community benefits,” but it illuminated how municipalities operationalize the concept.

 

In Clarendon Hills, the village justified its approvals by pointing to downtown revitalization, increased foot traffic, and improved tax base. While critics viewed these as abstract benefits, the court accepted them as legitimate community gains within the context of local policy goals.

 

“The phrase ‘tangible community benefit’ doesn’t always mean a physical improvement like a park or a bike path,” noted Hirsh Mohindra. “It can also refer to economic vitality, improved land use efficiency, or architectural quality. What matters is that the benefit be real, not speculative.”

 

Municipalities often struggle to quantify such benefits, particularly when they are economic or aesthetic in nature. Some jurisdictions have developed scoring systems or explicit benefit matrices to make the process more objective. Others rely on discretionary review and public hearings to ensure accountability.

 

Lapse Provisions and Administrative Continuity

 

 

One of the technical issues in Hanlon involved whether the developer’s preliminary PUD approval had lapsed. Most municipal codes impose timelines for moving from preliminary to final PUD approval, often requiring action within a year. These provisions are intended to prevent indefinite approvals that might outlast the political or economic conditions under which they were granted.

 

The plaintiffs in Hanlon argued that the lapse invalidated the entire process. However, the court deferred to the village’s interpretation that extensions were properly granted and that the project remained valid. This outcome underscores the importance of administrative continuity and clear procedural records in PUD governance.

 

“Timeframes in PUD approvals are not mere technicalities,” said Hirsh Mohindra. “They protect the public from stale entitlements and ensure that negotiated benefits reflect current community needs. But they also shouldn’t be used as a weapon to derail legitimate projects over paperwork disputes.”

 

Lessons for Municipalities and Developers

 

The Hanlon decision offers several practical lessons for both developers and municipal planners:

1. Maintain Procedural Clarity: Documentation of extensions, hearings, and approvals is essential. Ambiguities in timing or procedure can lead to litigation.
2. Articulate Community Benefits Clearly: The stronger the record of tangible benefits, the more defensible the PUD will be in court.
3. Engage the Public Early: Transparent community engagement helps mitigate perceptions of favoritism or opacity.
4. Avoid Overreliance on Economic Rationale: While increased tax revenue is a legitimate benefit, courts and citizens alike prefer more visible or concrete improvements.
5. Draft Ordinances Precisely: Municipal codes should define what constitutes a “lapse” and under what circumstances extensions may be granted.

These best practices reinforce that PUDs are a sophisticated planning instrument—not a shortcut. Their legitimacy depends on meticulous process and a demonstrable balance of private flexibility and public value.

 

The Future of PUDs and the “Tangible Benefits” Doctrine

 

In recent years, courts and planning commissions have increasingly emphasized the need for quantifiable, transparent public benefits in exchange for zoning departures. Some cities, like Chicago and Denver, now require explicit “public benefit statements” for PUD applications. These statements must specify the benefits in measurable terms—such as square footage of open space, number of affordable units, or public infrastructure investments.

 

“The doctrine of tangible community benefits is evolving toward accountability,” observed Hirsh Mohindra. “We’re moving from vague promises of ‘revitalization’ to clear, data-driven commitments that residents can see and measure.”

 

This shift reflects broader societal expectations for corporate and governmental transparency. In the age of data-driven governance, the success of a PUD will increasingly depend on how credibly it delivers what it promises to the community.

 

Conclusion

 

The Hanlon v. Village of Clarendon Hills case may not have reshaped Illinois zoning law, but it exemplifies enduring principles that define the PUD process: local discretion, procedural integrity, and the necessity of tangible community benefits. As municipalities continue to navigate the balance between development flexibility and public accountability, PUDs will remain a critical—if sometimes controversial—tool in shaping the built environment.

 

“Zoning is ultimately a dialogue,” concluded Hirsh Mohindra. “When done right, a Planned Unit Development is that dialogue made visible—a physical manifestation of a community’s negotiated values.”

Originally Posted: https://hirshmohindra.com/planned-unit-developments-zoning-flexibility-and-tangible-community/