## Facts

- Raritan Development Corp. proposed a three-story residential building in a New York City planned development subject to a maximum floor-area ratio (FAR) of 0.5 per building.
- The zoning provisions broadly defined “floor area” to include space used for dwelling purposes, but expressly excluded “cellar space” from floor-area calculations.
- The zoning text defined a “cellar” as space more than half its height below curb level (more than half below grade).
- Raritan designed the lowest residential level so it met the “cellar” definition and excluded that level from FAR, and the Department of Buildings (DOB) initially issued a permit.
- DOB later reinterpreted the provisions to require inclusion of cellar space used for dwelling purposes in FAR, revoked the permit, and concluded the project exceeded allowable floor area.
- Raritan appealed to the Board of Standards and Appeals (BSA), which upheld DOB’s determination as reasonable in light of density and parking impacts.
- Raritan brought an Article 78 proceeding challenging the BSA determination; lower courts upheld the agency action, and Raritan appealed.

## Issues

1. Whether the BSA reasonably interpreted the zoning provisions to require counting cellar space used for dwelling purposes in floor area for FAR, despite a general textual exclusion for “cellar space.”
2. Whether the agency’s revised interpretation and permit revocation were lawful under the deferential review applied to administrative interpretations of zoning regulations.

## Decision

- The New York Court of Appeals confirmed the BSA’s determination and upheld DOB’s revocation of the permit.
- The court held the agency interpretation was reasonable: cellar space used for dwelling purposes could be included in floor area for FAR in the planned development.
- The court applied deference to the agency charged with administering the zoning scheme and declined to adopt Raritan’s literal reading where it would defeat the regulatory objectives.
- The prior issuance of a permit did not bar DOB from correcting its interpretation and enforcing the zoning provisions as reasonably construed.

## Legal Principles

- Courts generally defer to a zoning agency’s construction of the regulations it administers if the interpretation is not irrational or unreasonable, even if other interpretations are plausible.
- Zoning provisions are read as a whole to effectuate core purposes such as density, bulk, and parking controls; exceptions may be construed to prevent circumvention of those purposes.
- A textual exclusion (such as a “cellar” exclusion from floor area) may be reasonably limited by the agency when its literal application would allow habitable residential space to evade FAR limits.
- Issuance of a permit based on an earlier interpretation does not, by itself, create an entitlement that prevents later correction and enforcement consistent with a reasonable agency construction.

## Conclusion

The court upheld the BSA’s determination that cellar space used for dwelling purposes must be included in floor-area calculations for FAR in the planned development, deferring to the agency’s reasonable interpretation and sustaining the permit revocation.


In re Raritan Dev. Corp. v. Silva, 91 N.Y.2d 98, 689 N.E.2d 1373 (N.Y. 1997)