Law unconstitutional, local developers, attorneys claim
CITY HALL — A coalition of apartment owners and housing developers is suing the City Council over a law that requires the construction of affordable housing for low-and moderate-income individuals.
The Action Apartment Association, (AAA), a nonprofit organization representing Santa Monica landlords and developers, last week filed the suit in Los Angeles Superior Court in an attempt to have what’s known as the “inclusion-ary zoning” ordinance overturned.
If successful, AAA’s suit could set a precedent for those looking to block efforts by local governments calling for the mandatory construction of affordable housing, scaling back some requirements deemed too extreme, legal experts said.
The law, passed by the City Council in June, requires developers of multi-family housing projects with four or more units to make 20 percent of those units available to moderate-income households or, as an alternative, offer 20 percent of the total units as apartments for low-income households. For those con- Sax sells Fabian Lewkowicz/Daily Press Naela Bullet, 33, who hails from Zurich, Switzerland, plays ‘Ain't no sunshine when she’s gone,’ on her sax at the Santa Monica Pier. structing 16 or more units, the requirement jumps to 25 percent. The U.S. Department of Housing classifies low income as $41,580 annually for a family of four in the Los Angeles area; moderate individuals make $69,300 for a family of four.
If developers choose to build the affordable housing off-site, they are required under the law to set aside 25 percent more than what is required for one-site development. The units also will have to be located within a one-quarter mile radius of the market rate units being built.
Attorneys for AAA claim the ordinance is a violation of the Fifth Amendment to the U.S. Constitution, which prohibits the seizure of property without just compensation. They also charge elected officials with violating due process by not submitting the ordinance for approval by the state Department of Housing and Community Development, which must review action that constrains the production of new housing.
“The money that builders lose constructing below-market residences will be passed along in higher prices for the new housing that isn’t price-controlled,” said James S. Burling, an attorney with the Pacific Legal Foundation, which filed the suit on behalf of AAA. “This will discourage home construction and raise costs for most home buyers.
“It is unconscionable that the city of Santa Monica is further exacerbating the shortage of workforce housing by driving up prices for new and replacement housing,” Burling added. “The costs of home ownership in Santa Monica should not be increased by forcing families that buy market-rate housing to subsidize the homes of their neighbors.”
City officials said they are currently reviewing the lawsuit and could not comment on AAA’s claims.
Instead of building affordable housing, condominiums developers could pay $26.08 per square foot of development as an in-lieu fee. But that changed when the new law was passed earlier this year.
While the construction of more affordable housing is the goal of the ordinance, AAA said the best way to make more housing available is through market mechanisms and not by government influence, according to the lawsuit.
“Santa Monica has not adequately demonstrated any nexus or rough proportionality between the construction of new or replacement market-rate housing and a significant increased need for subsidized housing,” the lawsuit reads. “Because (City Hall) failed to meet their burden … these provisions are an unconstitutional taking under the takings clause of the Fifth Amendment to the United States Constitution … (and) fail to substantially advance a legitimate governmental purpose …”
The suit claims the ordinance will discourage new housing, which will exacerbate any shortage of affordable housing in the city.
“Action’s members contend that the ‘inclu-sionary’ requirement makes it impossible to build a financially-sound residential project,” said Rosario Perry, a Santa Monica-based land-use attorney and spokesman for AAA. “Action bases this conclusion on calculations related to the size of the typical lot, the existing setback and parking requirements, the availability of a density bonus, and the costs of compliance.”
Originally published in the Santa Monica Daily Press print edition on September 20, 2006. Read the original PDF.