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HomeMy WebLinkAboutAGENDA REPORT 2000 0517 CC REG ITEM 11ETO: FROM: DATE: MOORPARK CITY COUNCIL AGENDA REPORT Honorable City Council ITEM Deborah S. Traffenstedt, ATCM /City Clerk �!-�51 May 4, 2000 (CC Meeting 5/17/00) SUBJECT: Consider Amicus Support in Associated Home Builders of Northern California v. City of Napa; California Court of Appeal from Superior Court Judgment Rejecting Challenges to Residential Inclusionary Ordinance BACKGROUND The City Attorney has forwarded a request for amicus support and has recommended that the City join the brief for the above referenced litigation. The Legal Advocacy Committee of the League of California Cities has also recommended that cities join in on the amicus curiae support. DISCUSSION The background of the case and the primary issues in this lawsuit are described in the attached letter. To summarize, the City of Napa adopted a residential inclusionary zoning ordinance, which included a requirement that 10 percent of all new residential dwelling units be affordable and imposed rent and resale requirements to ensure the continued affordability of the units constructed. The Associated Home Builders, represented by the Pacific Legal Foundation, filed a lawsuit challenging the ordinance. The Superior Court agreed with the City's arguments that the causes of action in the lawsuit were either at odds with settled law, premature, or both. The Associated Home Builders then appealed the case to the First District Court of Appeal. Page 3 of the attached letter summarizes the issues proposed to be analyzed in an amicus brief. The outcome of this case will directly impact the validity of inclusionary zoning requirements adopted by other cities. STAFF RECOMMENDATION Direct the City Attorney to sign the representation form authorizing the City of Moorpark to be added to the amicus brief. Attachment: Letter dated April 18, 2000 4001::5 W: MW //llMM CITY of NAPA April 18, 2000 TO: California City Attorneys CITY ATTORNEY 955 School Street R ECEIVELiapa, 660 a a, California 94559 -0660 (707) 257 -9516 APR 2 7 2000 (707) 257 -9274 (Facsimile) '3ITY CLERK'S DEPARTMENT CITY OF MOORPARK RE: REQUEST FOR AMICUS CURIAE SUPPORT IN ASSOCIATED HOME BUILDERS OF NORTHERN CALIFORNIA V. CITY OF NAPA; CALIFORNIA COURT OF APPEAL NO. A090437; APPEAL FROM SUPERIOR COURT JUDGMENT REJECTING CHALLENGES TO RESIDENTIAL INCLUSIONARY ORDINANCE Dear City Attorneys: The City of Napa requests your cities' amicus curiae support in the above - referenced case involving a challenge brought by the Associated Homes Builders of Northern California, represented by the Pacific Legal Foundation, against the City's residential inclusionary zoning requirement. The Legal Advocacy Committee of the League of California Cities also urges cities to join in this effort. BRIEF DESCRIPTION OF CASE The City of Napa adopted its inclusionary ordinance, similar in substance to ordinances adopted by some 75 cities and counties statewide, to address impacts on affordable housing created by the developmert of market rate residential projects by requiring generally that 10% of all new residential dwelling units be affordable, and by imposing rent and resale requirements to ensure the continued affordability of the units constructed. The ordinance permits a residential developer to satisfy the requirement either by an "alternative equivalent proposal," including a dedication of land or the construction of affordable units on another site, or, again at the developer's option, by payment of an in -lieu fee to be used only to increase and improve the supply of affordable housing in the City. The ordinance also allows developers various affordable housing concessions and incentives, and permits developers to appeal to the City Council for a reduction, adjustment or complete waiver of the inclusionary /in -lieu fee requirements based upon a demonstrated absence of a reasonable relationship or nexus between the requirements and the impact of the development. 000 -11 California City Attorneys Page 2 April 18, 2000 The history of the adoption of the ordinance is notable in reflecting that Napa did not "force" the ordinance on the development community, but rather created a truly local, consensus solution unanimously supported by x11 local stakeholders, including developers and builders. When the first version of the ordinance was presented to the City Council at a public hearing in early 1999, extensive public comment from the building, development and realtor communities concerning perceived burdens and problems with the draft ordinance's initial requirements prompted the Council to direct staff to undertake additional consensus building, and to make substantial revisions to the draft ordinance, in order to address the concerns of, and compromise with, all stakeholders, including the Chamber of Commerce, affordable housing advocates, non- profits, the Napa -Solano Builders Exchange, the Napa Construction Coalition, the Napa Valley Economic Development Corporation, the North Bay Association of Realtors and the Napa Chapter of the Association of Realtors. These revisions subsequently were approved by the City Council, and the ordinance, which was supported by findings articulating the relationship between the development of market rate housing and the aggravation of the affordable housing crises, was adopted in July, 1999. Shortly after the ordinance became effective, the Associated Home Builders, represented by the Pacific Legal Foundation (PLF), filed a lawsuit challenging the ordinance on its face. The lawsuit contained six causes of action claiming as follows: (1) the ordinance was not premised on an ordinance - specific study showing a nexus between the development of market rate housing and the need for affordable housing, and thus on its face constituted a taking under a "heightened scrutiny" analysis assertedly imposed under the Nollan/Dolan line of cases, and under that part of the California Supreme Court's Ehrlich decision concerning the ad hoc recreational fee imposed there; (2) the ordinance violated due process by lacking any demonstrated nexus between the development of market rate housing and the creation of affordable housing needs, and by denying developers of market rate housing a "fair return"; (3) the ordinance constituted a development fee adopted in violation of the Mitigation Fee Act, Government Code Section 66000, et seq.; (4) the ordinance imposed a tax in violation of Proposition 13; (5) the ordinance imposed a tax in violation of Proposition 62; and (6) the ordinance imposed a tax in violation of Proposition 218. The City demurred, arguing that these arguments were either at odds with settled law, premature, or both. The Superior Court agreed with the City's arguments, and thus Sustained its the City's demurrer as to all causes of action without leave to amend. The Home Builders then appealed the case to the First District Court of Appeal. U&IWAU 391 This case obviously involves several issues of critical importance to cities statewide. First, although there are published decisions validating affordable housing fees on commercial development, this is the first challenge of which Napa is aware to any residential inclusionary ordinance requiring developers of residential, market rate housing to provide inclusionary units or in -lieu payments. Insofar as some 75 cities and counties statewide have similar inclusionary requirements, the outcome of this case will directly impact the validity, of such ordinances. California City Attorneys Page 3 April 18, 2000 Moreover, even those cities without inclusionary ordinances will be affected by the outcome of this case. The Home Builders' and PLF's argument concerning the applicability of heightened scrutiny under Nollan/Dolan to this police power zoning ordinance requirement imperils not only inclusionary ordinances, but land use and other police power ordinances as well. If the plaintiff is successful in persuading a court to accept heightened scrutiny as the applicable standard, cities' ability to exercise basic police power regulatory authority will be severely diminished. Plaintiff's other theories are of similar concern to cities. For example, the assertion that the inclusionary in -lieu fee, which under virtually all inclusionary ordinances is not mandatory at all, but rather one of many development options, may be challenged as a tax under Propositions 13, 62 and 218, threatens to undermine cities' ability to impose mitigation fees to defray impacts created by new development. So too does the assertion that such ordinances are subject to a "staturory heightened scrutiny" under the Mitigation Fee Act. I have discussed this matter with the proposed amicus brief writer, Rick Judd of Goldfarb & Lipman, and Andrew Schwartz, the San Francisco Deputy City Attorney (and takings expert) assigned by the Legal Advocacy Committee to supervise the amicus effort. We propose the following issues would benefit from analysis in an amicus brief: 1. The history of the affordable housing crisis in California, the pressure exerted by State law on cities and counties to address this crisis; the use of inclusionary ordinances statewide to address such problems; and the benefits and successes of such programs; 2. How the Home Builders/PLF takings and due process theories threaten basic principles of separation of powers by improperly inviting courts to second guess the wisdom of basic legislative determinations on land use issues reserved to local legislative bodies; 3. Why plaintiffs' heightened scrutiny theory fails, and why the ordinance withstands the scrutiny instead under deferential rational basis standards, pursuant to Ehrlich and Santa Monica Beach; and 4. That in fact the Court should take this opportunity to clarify that the decisions in Ehrlich and Santa Monica Beach do not authorize courts to use taking analysis to test how well government's chosen means serve its ends, and that passing references in those cases which may imply differently should not be relied on. 000116 California City Attorneys Page 4 April 18, 2000 ANTICIPATED BRIEFING SCHEDULE The appellants' opening brief likely will be filed within 30 to 60 days, or by mid -May to mid -June, 2000. The City's brief, and that of aulig 1, thus would be due by mid -June to mid,July, 2000. Cities wishing to join in this amicus effort are encouraged to notify the brief writer, Rick Judd of Goldfarb & Lipman by May 31, 2000. CONCLUSION This case plainly is a matter of widespread interest to all California cities, and the attorneys from the PLF have made clear their intention to take this case as far as possible. The City of Napa and the Legal Advocacy Committee urge cities to lend their support to turn away these efforts to undermine basic and well - accepted police power responses to the difficult affordable housing crisis which confronts all California cities, and for which the State of California has imposed increasingly difficult compliance requirements. Please return the enclosed form to Rick Judd by May 31, 2000. TB:st cc. Rick Judd, Esq. Andrew Schwartz, Esq. Kirk Trost, Esq. Richard Marcantonio, Esq. Michael Rawson, Esq. Dara L. Schur, Esq. Richard Rothschild, Esq. Mayor and Council Pat Thompson Peter Dreier John Yost 00011v AUTHORIZATION TO JOIN AMICUS BRIEF TO: Richard A Judd, Esq. GOLDFARB & LIPMAN 1 Montgomery Street Telesis Tower, 23d Floor San Francisco, CA 94104 (415) 788 -6336 (415) 788 -0999 fax email: Budd @goldfarblipman.com I hereby authorize you to include the City of , California, as an amicus party in the amicus brief that Goldfarb & Lipman is preparing in the case of Hom Builders Association v. City of Naga currently on appeal to the Court of Appeal for the First Appellate District, Case No. A090437. I understand that no financial contribution of any kind is required of amicus parties. (City Attorney Signature) (Printed Name) (Address) (City, State, Zip) 00010*c0