Court Says City of Napa Ordinance Advances a Government Interest
An appellate court has upheld the City of Napa's zoning ordinance that requires developers to devote a portion of their projects to affordable housing. The unanimous three-judge panel of the First District rejected the Home Builders Association of Northern California's contention that the inclusionary zoning law amounted to an unconstitutional taking.
Instead, the court held that the ordinance substantially advances an important government interest, namely the creation of housing for low- and moderate-income families.
The case had been closely watched by housing advocates and local government officials. Six housing advocacy organizations, 72 cities, the California State Association of Counties and the state attorney general's office filed amicus briefs for the City of Napa. At least 60 cities in California have similar inclusionary zoning laws. Interestingly, the Napa Chamber of Commerce, the Napa Valley Farm Bureau and the Napa Valley Grape Growers Association also sided with the city — a demonstration of the local need for affordable homes and the desire to protect the wine industry.
During the mid-1990s, Napa created a task force to study affordable housing issues and solutions. The city ended up adopting an inclusionary zoning ordinance that requires developers to make 10% of new units "affordable" based on the local median income. Developers also can satisfy the requirement by designating land, or by building affordable units elsewhere in town. Builders also may pay an in-lieu fee to the city's housing trust fund.
In 1999, the Home Builders Association filed a lawsuit alleging that Napa's measure was invalid on its face. The association claimed the law violated the takings clauses of the federal and state constitutions, the state Mitigation Fee Act, due process protections and Proposition 218. Napa County Superior Court Judge Scott Snowden upheld the city's demurer. The association appealed, but got no further.
The appellate panel published only a portion of its opinion addressing the takings claims. The home builders sought to have the law reviewed based on the Nollan/Dolan "strict scrutiny" standard. Nollan v. California Coastal Comm'n, (1987) 483 U.S. 825; Dolan v. City of Tigard, (1994) 512 U.S. 374. In Nollan, the U.S. Supreme Court required an "essential nexus" between a state-imposed condition of development, and the impact of the development. In Dolan, the high court said there must be a "rough proportionality" between the exaction and the development's impacts.
But the First District ruled that the Nollan/Dolan test was inapplicable because it applies to specific land use "bargains" between a property owner and a regulatory agency. The court ruled, "[A] different standard of scrutiny applies to development fees that are generally applicable through legislative action because the heightened risk of the ‘extortionate' use of the police power to exact unconstitutional conditions is not present." The court cited both Ehrlich v. City of Culver City, (1996) 12 Ca.4th 854 (CP&DR Legal Digest, April 1996) and Santa Monica Beach, Ltd. v. Superior Court, (1999) 19 Cal.4th 952 (CP&DR Legal Digest, February 1999).
Writing for the court, Presiding Justice Barbara Jones continued, "Here, we are not called upon to determine the validity of a particular land use bargain between a governmental agency and a person who wants to develop his or her land. Instead, we are faced with a facial challenge to economic legislation that is generally applicable to all development in City. We conclude the heightened standard of review described in Nollan and Dolan is inapplicable under these facts."
What matters, the court ruled, is whether the inclusionary zoning ordinance substantially advances a legitimate government interest — the test outlined in Agins v.. Tiburon, (1980) 447 U.S. 255. "[W]e have no doubt that creating affordable housing for low and moderate income families is a legitimate state interest," Jones wrote. And, by requiring developers to provide "a modest amount of affordable housing," the ordinance does substantially advance that legitimate interest, the court ruled.
In the unpublished portion of its opinion, the court rejected the home builders' due process and Proposition 218 arguments. The court deemed that claims regarding Mitigation Fee Act violations were waived because the home builders provided no analysis.
Home Builders Association of Northern California v. City of Napa, No. A090437, 01 C.D.O.S. 4655, 2001 DJDAR 5713. Filed June 6, 2001.
For the association: Paul Campos, HBA general counsel, (925) 820-7626.
For the city: Kirk Trost, Hyde, Miller, Owen & Trost, (916) 447-7933.