ACTION APARTMENT Ass'n v. CITY of SANTA MONICA, B201176.

Citation166 Cal.App.4th 456,82 Cal.Rptr.3d 722
Decision Date18 May 2009
Docket NumberNo. B201176.,B201176.
CourtCalifornia Court of Appeals
PartiesACTION APARTMENT ASSOCIATION, Plaintiff and Appellant, v. CITY OF SANTA MONICA et al., Defendants and Respondents.

OPINION TEXT STARTS HERE

Rosario Perry, Santa Monica, James S. Burling, Sacramento, Graham Owen, and Damien M. Schiff, Sacramento, for Plaintiff and Appellant.

Marsha Jones Moutrie, City Attorney (Santa Monica), Joseph Lawrence, Assistant City Attorney, and Alan Seltzer, Chief Deputy City Attorney for Defendants and Respondents.

TURNER, P.J.

I. INTRODUCTION

This is a principally a takings case. In Dolan v. City of Tigard (1994) 512 U.S. 374, 386-391, 114 S.Ct. 2309, 129 L.Ed.2d 304 and Nollan v. California Coastal Commission (1987) 483 U.S. 825, 836-837, 107 S.Ct. 3141, 97 L.Ed.2d 677, the United States Supreme Court adopted what is called a “nexus” and “rough proportionality” test to be applied in an “exaction” case; i.e. when a public entity conditions approval of a proposed development on the dedication of property to public use. (See Monterey v. Del Monte Dunes at Monterey, Ltd. (1999) 526 U.S. 687, 702, 119 S.Ct. 1624, 143 L.Ed.2d 882.) The United States and California Supreme Courts have applied the Nollan/Dolan nexus and rough proportionality test only when an adjudicative decision is made in the case of an individual developer's request for approval of a project. ( San Remo Hotel v. City and County of San Francisco (2002) 27 Cal.4th 643, 670, 117 Cal.Rptr.2d 269, 41 P.3d 87; see Lingle v. Chevron U.S.A. Inc. (2005) 544 U.S. 528, 546, 125 S.Ct. 2074, 161 L.Ed.2d 876.)

Plaintiff, Action Apartment Association, challenges the June 13, 2006 enactment of Ordinance No. 2191 which modified existing requirements on multi-family housing construction. Plaintiff argues Ordinance No. 2191, on its face, constitutes an unlawful uncompensated taking. Plaintiff asserts the decision of the United States Supreme Court in Lingle v. Chevron U.S.A. Inc., supra, 544 U.S. at page 547, 125 S.Ct. 2074 expands the Nollan/Dolan nexus and rough proportionality test beyond the scope of an individual adjudicative decision. Plaintiff argues that the Nollan/Dolan nexus and rough proportionality test applies in the case of a facial challenge to a land use regulation; not only when conducting judicial review of an adjudicative decision made in the case of an individual developer's request for approval of a project. Thus, plaintiff argues it is entitled to a trial on its takings claim utilizing the Nollan/Dolan nexus and rough proportionality test. Also, plaintiff argues Ordinance No. 2191 could not be operative without prior review by the California Department of Housing and Community Development pursuant to Government Code section 65585, subdivision (b). We disagree with both of plaintiff's challenges to Ordinance No. 2191 and affirm the judgment.

II. THE VERIFIED COMPLAINT

On September 11, 2006, plaintiff filed its verified complaint which sought to invalidate Ordinance No. 2191. Named as defendants are the City of Santa Monica (the city) and its city council (the council). On June 13, 2006, the council adopted Ordinance No. 2191 which amended Santa Monica Municipal Code 1 sections 9.56.020, 9.56.030, 9.56.040, 9.56.050, 9.56.060, and 9.56.070. According to plaintiff, an association of owners of developed and undeveloped properties, the ordinance modified the options for meeting affordable housing requirements. The ordinance imposed requirements on developers constructing multi-family ownership housing projects in a multi-family residential district. Under those circumstances, absent a waiver, the developer was required to construct affordable housing on the site of the development or at another location.

In the first cause of action for an unlawful taking under the federal and state Constitutions, plaintiff alleged: the requirements to build subsidized affordable housing units were not roughly proportional to any impact that might occur from the construction of new or replacement condominium units; there was no nexus between the construction of new or replacement condominium units and the need for subsidized housing; defendant had failed to demonstrate any nexus or rough proportionality between the construction of new or replacement market-rate housing and a significant need for more subsidized housing; and market forces were not responsible for an absence of affordable housing within defendant's boundaries. Thus according to plaintiff, on its face, Ordinance No. 2191 violated the takings clauses of the Fifth Amendment of the United States Constitution and article I, section 19 of the California Constitution because: there was an absence of a nexus between the construction of market rate residences and a shortage of “affordable units”; defendants had conducted no study which verified the existence of any rough proportionality between the construction of new or replacement market-rate homes and a significant increased need for subsidized housing; builders and buyers alike were not responsible for the purported lack of affordable housing in the city; and to the extent the buyers or builders of housing have the responsibility to house the city's workforce, that obligation should not be disproportionately incurred by the purchasers of new market-rate housing.

The first cause of action alleged: “The lack of a nexus between the construction of market-rate housing within the City of Santa Monica and a shortage of ‘affordable units' within the City of Santa Monica means that the affordable unit and related conditions found in City of Santa Monica's Ordinance [No.] 2191 violate the Takings Clause of the Fifth Amendment to the United States Constitution and the Takings Clause of Article I, section 19, of the California Constitution.” In addition, plaintiff alleged the ordinance failed to advance any substantial governmental interest and thus further violated the state constitution takings clause. Hence, plaintiff sought a declaration that the ordinance violated the federal and state constitutional takings clauses.

The second cause of action alleged defendants had failed to determine whether there was a reasonable relationship between the use of the “fee” and the type of development upon which the “fee” would be imposed. Additionally, defendants failed to determine there was a reasonable relationship between the need for the “public facility” and the type of project upon which the “fee” was imposed. Therefore, plaintiff alleged Ordinance No. 2191 violated Government Code sections 66000 through 66022.

The third cause of action sought a declaration that Ordinance No. 2191 violated Government Code sections 65583 and 65585. According to plaintiff, by reason of Ordinance No. 2191 alone and in combination with the city's zoning codes and related height, setback, and parking requirements, it was now “physically and economically infeasible” for property owners to build new or replacement condominium housing. Also, because of the city's zoning code, there were limits on the number of condominium units that could be placed on a single lot. Because of the density limits and the onsite affordable housing construction requirements created by Ordinance No. 2191, a builder could no longer physically take advantage of the maximum density bonus provided by state law. Thus, because Ordinance No. 2191, standing alone or in conjunction with the city's zoning code, created a constraint on the production of new housing; as such it must be approved by the California Department of Housing and Community Development. Ordinance No. 2191 was never submitted to the state Department of Housing and Community Development for review or approval, thereby violating Government Code sections 65583 and 65585.

The fourth cause of action alleged Ordinance No. 2191 affected property rights and failed to advance a legitimate governmental interest. Further, Ordinance No. 2191 discouraged the construction of new or replacement housing thereby exacerbating the shortage of affordable housing in the city. Because Ordinance No. 2191 failed to advance any governmental interest, it was violative of the federal and state constitutional due process clauses according to plaintiff. The fifth cause of action realleged the factual allegations in the preceding causes of action. According to the complaint, without the issuance of a writ of mandate, plaintiff's members' aforementioned constitutional and statutory rights would be violated. Plaintiff thus sought a writ of mandate enjoining defendants from enforcing Ordinance No. 2191.

The prayer for relief sought a declaration that Ordinance No. 2191 violated: the takings clauses of the federal and state Constitutions; the state and federal constitutional due process clauses; and Government Code sections 66000 through 66022, 65583, and 65585. Also, the prayer for relief sought a determination pursuant to Government Code section 66022, subdivision (b) and Code of Civil Procedure sections 860 through 863 that the affordable housing requirements in Ordinance No. 2191 were invalid. Moreover, the prayer for relief sought the issuance of a peremptory writ of mandate and an attorney's fees award.

III. DEFENDANTS' DEMURRER AND JUDICIAL NOTICE REQUEST

On April 17, 2007, defendants demurred to the complaint. As to the first cause of action, defendants asserted that: no regulatory takings cause of action was stated because the “substantially advance” test does not apply to such a claim; heightened scrutiny under the nexus and rough proportionality tests cannot apply to a facial challenge to a regulatory enactment of general application such as Ordinance No. 2191; and there was no allegation plaintiff's members had exhausted their administrative remedies or it would be futile to do so. As to the second cause of action, defendants argued: no...

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