Associated Home Builders etc., Inc. v. City of Newark

Citation95 Cal.Rptr. 648,18 Cal.App.3d 107
CourtCalifornia Court of Appeals
Decision Date15 June 1971
PartiesASSOCIATED HOME BUILDERS OF the GREATER EAST BAY, INC., a non-profit California corporation, Plaintiff and Appellant, v. The CITY OF NEWARK, a municipal corporation, Defendant and Respondent. Civ. 27236.

Brobeck, Phleger & Harrison, Howard N. Ellman, San Francisco, for plaintiff and appellant.

Sturgis, Den-Dulk, Douglass & Anderson, Anthony J. Garcia, Oakland, for defendant and respondent.

DRAPER, Presiding Justice.

Plaintiff is an incorporated association of contractors engaged in the construction of residential buildings. In this declaratory relief action, it seeks to establish the invalidity of a license tax ordinance (No. 91) of defendant, a general law city. This ordinance, concededly solely a revenue measure, imposes a tax upon the business of constructing dwellings. The measure of the tax is the number of bedrooms in the units to be constructed. It is required to be paid before the building permit is issued, and the fees received are to be deposited by the city in a 'capital outlay fund.' Another ordinance (No. 98) imposes a license tax upon substantially all businesses, including construction. Plaintiff association attacks the ordinance as a discriminatory denial of equal protection of the law. The trial court held that the tax is based upon a reasonable classification, and thus is not discriminatory or arbitrary. Plaintiff appeals.

The power "to make classifications * * * for the purpose of taxation is very broad. * * * A statute is presumed to be constitutional until the contrary appears." (Fox etc. Corp. v. City of Bakersfield, 36 Cal.2d 136, 141, 222 P.2d 879, 833.)

Appellant's core argument is that the tax discriminates unreasonably in taxing residential construction at a substantially higher rate than the building of commercial and industrial structures. But when a legislative enactment is attacked as violative of the equal protection clause, 'if facts reasonably can be conceived that would sustain it, their existence is presumed, and the burden of showing arbitrary action rests upon the one who assails the classification.' (Burks v. Poppy Construction Co., 57 Cal.2d 463, 475, 20 Cal.Rptr. 609, 616, 370 P.2d 313, 320.) These and many other decisions have upheld classifications for tax purposes against like attacks (e.g. Willingham Bus Lines, Inc. v. Municipal Court, 66 Cal.2d 893, 59 Cal.Rptr. 618, 428 P.2d 602; Ex Parte Lemon, 143 Cal. 558, 77 P. 455; Clark v. City of San Pablo, 270 Cal.App.2d [18 Cal.App.3d 110] 121, 75 Cal.Rptr. 726; Web Service Co. v. Spencer, 252 Cal.App.2d 827, 61 Cal.Rptr. 493). Decisions which have struck down comparable provisions are distinguishable since the legislation was not strictly for revenue, but was largely regulatory in purpose, as in seeking to bar non-residents, or to distinguish among consumers, rather than businesses (e.g. Bueneman v. Santa Barbara, 8 Cal.2d 405, 65 P.2d 884; Gowens v. City of Bakersfield, 179 Cal.App.2d 282, 3 Cal.Rptr. 746; Security Truck Line v. Monterey, 117 Cal.App.2d 441, 256 P.2d 366, 257 P.2d 755; Soares v. City of Santa Monica, 38 Cal.App.2d 215, 100 P.2d 1108; In re Fassett, 21 Cal.App.2d 557, 69 P.2d 865). A recent Court of Appeal decision arguably could have supported appellant's argument by analogy, but after hearing by the Supreme Court, the opposite result has now been reached (Associated Home Builders v. City of Walnut Creek, 4 Cal.3d 633, 94 Cal.Rptr. 630, 484 P.2d 606).

Respondent points to the relatively greater fire and police protection and street use required for residents. Appellant argues that similar problems result from a proliferation of commercial or industrial uses, but it is not for the courts to say that the full-time requirements of residents do not impose a greater burden than the part-day pressures imposed by those who but work in a city. That fact issue is for the legislative body, and its determination affords an adequate basis for the classification.

Appella...

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13 cases
  • Weekes v. City of Oakland
    • United States
    • California Court of Appeals Court of Appeals
    • December 17, 1976
    ...in which they are found--a discriminatory tax. The omitted footnote in the last case refers to Associated Home Builders etc., Inc. v. City of Newark (1971) 18 Cal.App.3d 107, 95 Cal.Rptr. 648, wherein the court upheld a city's determination that residential construction should be taxed at a......
  • Ehrlich v. City of Culver City
    • United States
    • California Supreme Court
    • March 5, 1996
    ...36 [upholding excise tax of $500 per bedroom, up to a maximum of $1,000 per dwelling unit]; Associated Home Builders, Inc. v. City of Newark (1971) 18 Cal.App.3d 107, 95 Cal.Rptr. 648 [upholding per-bedroom excise tax].) As the Court of Appeal recently explained in Centex Real Estate Corp.,......
  • Times Mirror Co. v. City of Los Angeles
    • United States
    • California Court of Appeals Court of Appeals
    • May 28, 1987
    ...P.2d 879; Gutknecht v. City of Sausalito (1974) 43 Cal.App.3d 269, 276, 117 Cal.Rptr. 782; Associated Home Builders etc., Inc. v. City of Newark (1971) 18 Cal.App.3d 107, 109-110, 95 Cal.Rptr. 648; Clark v. City of San Pablo (1969) 270 Cal.App.2d 121, 126-127, 75 Cal.Rptr. The power to lice......
  • Bldg. Indus. Ass'n of the Bay Area v. City of San Ramon
    • United States
    • California Court of Appeals Court of Appeals
    • October 13, 2016
    ...and Services, § 6A.27, p. 6A–33 (Curtin), citing Cal. Const., art. XI, § 5, Gov. Code § 37100.5, and Associated Home Builders v. City of Newark (1971) 18 Cal.App.3d 107, 95 Cal.Rptr. 648.) Proposition 13 required that special taxes be approved by a two-thirds vote of the local voters (Cal. ......
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