Fees & Exactions

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By Michael Hansen 

On February 22, California State Assembly Member Toni Atkins, D-San Diego, introduced a bill, AB 1229, to restore the ability of California cities and counties to require affordable housing as part of market-rate housing developments. The bill would override a notable 2009 court decision, Palmer/Sixth Street Properties, L.P. v. City of Los Angeles, 175 Cal.App.4th 1396 (“Palmer”), that rendered many inclusionary housing requirements unenforceable under California law.Continue Reading Bill Introduced to Restore Cities’ Ability to Require Affordable Housing

(First published in the California Real Property Journal, a quarterly publication of the Real Property Law Section of the State Bar of California)

By Dave Lanferman

The quest to increase the supply of affordable housing has been an important public policy goal in California for decades.[1] That goal, however, has proven to be elusive. Even during times of recession and depressed housing markets, housing in many parts of California has remained prohibitively expensive to moderate and lower income households.[2] State and local governments have experimented with a wide variety of approaches intended to address this problem.[3] One of the most prevalent of these is “inclusionary zoning.”Continue Reading Inclusionary Zoning In California: Legal Questions And Issues

Trinity Park, L.P., et al. v. City of Sunnyvale, 2011 WL 1054221, __ Cal.App.4th ___, (6th Dist. 2011)

By Dave Lanferman

A California appellate court has ruled that the "pay-or-perform under protest" procedures of Government Code sections 66020 and 66021 do not apply to all types of development exactions. In its opinion, the Sixth Appellate District narrowed the scope of the statutory pay under protest provisions, and held that they should be interpreted so as to be available for review of exactions imposed by a local agency as a condition of development approval only if the exaction is "for the purpose of defraying all or a portion of the cost of public facilities related to the development project."Continue Reading “Pay Under Protest” Procedure for “Other Exactions” Is Not Applicable to All Development Exactions

Home Builders Ass’n of Tulare/Kings Counties v. City of Lemoore, No. 07C0185 (5th Dist. June 9, 2010)

By David Lanferman

On June 9, 2010, a panel of the Court of Appeal for the Fifth Appellate District rejected challenges by a builders association to six out of seven "development fees" recently adopted by the City of Lemoore. The Mitigation Fee Act (Gov. Code §§ 66000 – 66025) requires that a local agency seeking to establish or impose development fees to finance public facilities must "identify" the new public facilities purportedly justifying the fees. Two justices held that the City had satisfied these statutory requirements by adopting a consultant’s report that listed examples of the "types" of new facilities that the City may in the future decide to construct to accommodate growth from new developments, but the third justice wrote separately to question whether such lack of specificity complied with the statute.Continue Reading Mitigation Fee Act May Not Require Specific Identification of New Facilities

Beutz v. County of Riverside, No. RIC457351 (4th Dist. May 26, 2010)

By David Lanferman & Michael Cato

In Beutz v. County of Riverside, No. RIC457351 (4th Dist. May 26, 2010), the California Court of Appeal held that a special assessment imposed by the County of Riverside was invalid because the engineer’s report commissioned by the County failed to separate and quantify the general and special benefits to be realized from the public parks that were the subject of the special assessment district. By failing to both separate and quantify the general and special benefits, the agency failed to satisfy its two-part constitutional burden.Continue Reading General And Special Benefits Of Special Assessments Must Be Separated And Quantified

By James Pugh & Dave Lanferman

On October 22, 2009, the California Supreme Court decided not to review the Court of Appeal’s decision in the landmark Palmer/Sixth Street Properties v. City of Los Angeles case. [See SMRH Blog 08/18/2009, for detailed discussion of Palmer decision.] This decision, although favorable for Palmer, could launch "inclusionary zoning" and similar affordable housing laws across the state into uncertain legal waters as municipalities attempt to enforce now-questionable inclusionary zoning requirements.Continue Reading Supreme Court Refuses to Hear Palmer Case – Are Inclusionary Zoning Practices Due for Change?

Weisblat, et al., v. City of San Diego, ___ Cal. App. 4th ____ (Aug. 18, 2009, No. D052787)

By Jeffrey W. Forrest and David P. Lanferman

In 1997, in an attempt to clarify the sometimes blurry distinction between a government “fee” and a government “tax,” the California Supreme Court explained that “taxes are imposed for revenue purposes, rather than in return for a specific benefit conferred or a privilege granted.” (Sinclair Paint Co. v. State Bd. of Equalization (1997) 15 Cal.4th 866, 874.) Recently, on August 18, 2009, California’s Court of Appeal for the Fourth Appellate District further clarified the distinction in Weisblat, et al., v. City of San Diego (Super. Ct. No. GIC871893). The issue was whether the City of San Diego’s “Tax Collection Fee” charged to landowners to cover the expense of collecting and administering the City’s rental unit business tax was, in fact, a general tax. The court held that it was a general tax because the purpose of the Tax Collection Fee was not to provide a government service to landlords (such as building inspection), but rather to facilitate the City’s general tax collection efforts (processing rental tax applications, answering taxpayer questions, and generating and mailing out billing statements to collect the rental tax). As a general tax, the court voided the Tax Collection Fee because the City Council levied it in 2004 without approval of a majority of qualified voters in the City as required by the California Constitution. The City’s underlying rental unit business tax, which was established in 1942 and generates $11 million annually, was not challenged and remains in effect.Continue Reading Administrative Fee for Tax Collection is an Unconstitutional Hidden Tax

By David P. Lanferman & Jeffrey W. Forrest

On July 15, 2009, the Governor signed new "urgency" legislation to automatically extend the life of existing tentative subdivision maps, vesting tentative maps ("VTMs") and parcel maps for two additional years — provided that they were still valid and in effect on July 15, and would otherwise expire before January 1, 2012. The new law, AB 333 (Fuentes) (Stats. 2009, ch. 18), included urgency provisions so that it took effect immediately upon signature by the Governor. The urgency of this measure, intended to preserve the many approved projects which were otherwise in danger of map expiration and loss of valuable rights, was apparently recognized so that it was able to receive the Governor’s signature notwithstanding the hold on most other new legislation pending resolution of the State budget situation.Continue Reading New Law Automatically Extends Existing Tentative Maps For Two Years, But Also Creates New Pitfalls, And Reduces Some Protections For Recorded Maps

BIACC v. City of Patterson (2009) 171 Cal.App.4th 886

By David P. Lanferman

On June 17, 2009, the California Supreme Court denied the City of Patterson’s petition for review of the Court of Appeals decision invalidating the City of Patterson’s "affordable housing in lieu fees" and holding that the City violated a development agreement by demanding the new fees from the approved project. The Fifth Appellate District had initially issued its unanimous decision in January, holding that the City had failed to demonstrate that the amount of its new $22,000 per market-rate home fee was reasonably related to any deleterious impacts on the community’s need for affordable housing. The appellate court later denied the City’s petition for rehearing, slightly modified the text of its decision, and ordered the decision to be published in March. The Supreme Court’s recent ruling means the decision now stands as "final" (at least as to the California judicial system).Continue Reading Appellate Court Decision Invalidating Unjustified “Affordable Housing In Lieu Fees” Is Now Final