Amicus Curiae Brief — San Remo Hotel, LP v. City and County of San Francisco

Preme oun, US

FILED

©) NOV 12 2004 |

No. 04-340 | OFFICE OF THe Crem

In The

Supreme Court of the United States

SAN REMO HOTEL L.P., THOMAS FIELD,

ROBERT FIELD, AND T&R INVESTMENT CORP.,

Petitioners,

Vv.

CITY AND COUNTY OF SAN FRANCISCO, DEPARTMENT

OF CITY PLANNING, CITY PLANNING COMMISSION,

BOARD OF PERMIT APPEALS, BOARD OF SUPERVISORS

OF THE CITY AND COUNTY OF SAN FRANCISCO,

Respondents.

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals For The Ninth Circuit

BRIEF OF THE NATIONAL ASSOCIATION OF HOME

BUILDERS AS AMICUS CURIAE IN SUPPORT OF THE

PETITIONERS

MARY V. DiCRESCENZO KENNETH B. BLEY

DUANE J. DESIDERIO (Counsel of Record)

FELICIA K. WATSON Cox, CASTLE & NICHOLSON LLP

THE NATIONAL ASSOCIATION 2049 Century Park East, 28th Floor

OF HOME BUILDERS Los Angeles, CA 90067

1201 1Sth Street, N.W. (310) 284-2231

Washington, D.C. 20005 Attorneys for THE NATIONAL

(202) 266-8200 ASSOCIATION OF HOME BUILDERS

ee cele ao

TABLE OF CONTENTS

Page (s)

SUMMARY OF THE ARGUMENT .....0000......cccccceeeeeeeees 2

TEE ‘isc chiles chin chdnsdaddneiesbacnabeniek batinn lai taad iad aaialalie 3

I. THE PROCEDURE MANDATED BY WILLIAMSON

COUNTY DESPERATELY NEEDS FIXING.......... 3

Il. PROPERTY CAN BE WRONGLY TAKEN

THROUGH A LEGISLATIVELY IMPOSED

EXACTION AS EASILY AS IT CAN

THROUGH AN AD HOC ADMINISTRATIVE

EN ects clcnicindinbclacsteunensatbedadepabitininbceabiassasousas 5

A. This Court Has ay ema That A Legislative

Act Can Result In A Taking..................::ccceeceeeeees 5

B. Dolan Itself Involved A Legislatively Imposed

RN viscthacnlaidcittsiiaseentheyeedaidbensiniibaiaiieasnibesetin’ 6

Ill. THE CHARACTERIZATION OF

GOVERNMENTAL ACTION AS LEGISLATIVE

VS. ADMINISTRATIVE HAS PROVED TO BE

II ca pccnridtainicdicectiaiiclathia tntbtiecsiditinessdese 7

IV. LEGISLATIVELY IMPOSED EXACTIONS

CAN BE EASILY IMPOSED ON “OTHERS” ......... 9

V. THE PETITIONERS HAVE UNDEKSTATED

THE NUMBER OF DECISIONS WHICH HAVE

WRESTLED WITH THE APPLICATION OF

ee eniiisaialiidstgndetiadetiisninnncsestcbesmiascngeptinpsioeedagnenecess 10

VI. EXACTIONS HURT AFFORDABLE HOUSING....12

Fea ITY cl thiitcbdsbeanineiscesssicictinartdetbsscieocsosdedsaasen 16

Cases Page (s)

Agencia la Esperanza Corp., Inc. v. Orange County

Bd. of Supervisors, 2002 WL 681798 (Cal. App.

2002), cert. denied, 538 U.S. 916 (2003)... 11

Amoco Oil Co. v. Vill. of Schaumburg, 661 N.E.2d

380, (Ill. Ct. App.) appeal denied, 667

N.E.2d 1055, cert. denied, 519 U.S. 976 (1996)......... 11

Arcadia Dev. Corp. v. City of Bloomington,

552 N.W. 2d 281 (Minn. Ct. App. 1996)... 11

Arnel Dev. Co. v. City of Costa Mesa,

GID PDE SEG CEM. POGIOD coccccsscasisiscncascnastcestninntsianain 7

Babbitt v. Youpee, 519 U.S. 234 (1997)......cccccceeeneeeeeeens 5

California Bldg. Indus. Ass'n v. Governing Bd. of the

Newhall School Dist., 253 Cal. Rptr. 497 (1988) ......... 9

DLX, Inc. v. Kentucky, 381 F.3d 511 (6th Cir. 2004)......5

Dolan v. City of Tigard, 512 U.S. 374 (1994) ....... 3, 6,17

Dudek v. Umatilla County, 69 P.3d 751

(Or. CR Apap. CHGS) .cccccsvesscvscicnsssvosseccistointesnisedeiasesanaion 8

Eastern Enter. v. Apfel, 524 U.S. 498 (1998) ......cccccccceee 5

England v. Louisiana State Bd. of Med. Exam'rs,

STS UG. G41 (DGG) «..csciccevicsitensessssstaiaiapniamanntaaiaan 4

|

TABLE OF AUTHORITIES (cont.)

Erie R. Co. v. Tompkins, 304 U.S. 64 (1938)..0000000000..... 16

Extra Space of Laguna Hills v. City of San Clemente,

2002 WL 700930 (Cal. App. 2002) ...........00cccccccccceee. 11

Extra Space of Laguna Hills v. San Joaquin Hills

Transp. Corridor Agency, 2002 WL 683835

TS CR a ee eee 11

Garneau v. City of Seattle, 147 F.3d 802

ET TS EE 17

Greater Atlanta Homebuilders Ass'n v. DeKalb

County, 588 S.E.2d 694 (Ga. 2003) 00.0... 11

Harris v. County of Riverside, 904 F.2d 497

ETE a a s

Hodel v. Irving, 481 U.S. 704 (1987) ..........00000ccccccccceees 5

Home Builders Ass'n v. City of Napa, 108 Cal. Rptr. 2d

60 (2001), cert. denied, 535 U.S. 954 (2002) ............. 11

Homebuilders Ass'n v. Tualatin Hills Park &

Recreation Dist., 62 P.3d 404 (Or. Ct. App. 2003).....11

Nasierowski Bros. Inv. Co. v. City of Sterling Heights,

| SE en 8

Parking Ass'n of Georgia, Inc. v. City of Atlanta,

EEE EE a 9

IV

TABLE OF AUTHORITIES (cont.)

Santini v. Connecticut Hazardous Waste Mgmt. Serv.,

A Gt) Ce eee ae 2

Swift v. Tyson, 41 U.S. 1 (1842)..........:cccccccccsssececesseeees 16

Town of Flower Mound v. Stafford Estates Ltd. P ‘ship,

EDS SW GO COR, BD cricshinctomsiniensecieatcinativine 7

Williamson County Reg 'l Planning Comm'n v.

Hamilton Bank, 473 U.S. 172 (1985).............. 16, 2, 3,5

Wonders v. Pima County, 89 P.3d 810

CAGE, CO, FAR, BP cenccestnessstiantcntiblanenctdtionaticinctinne 11

Constitutional and Statutory Provisions

Federal

Eis Be ccuninsnssiniintdanitinteniabihidniatinabiihdiiigidipial 5

BS UBL, © TID cicrxscccecinnsninseinsntiermeensinniiivianenininactvsinasstit 5

California

Coal. Camst. ant. XEBBA, § 4...2......-ceccecscsesscscseeceesocssecesesenees 9

Other

Alan A. Altshuler and José A. Gomez-Ibajfiez,

Regulations for Revenue: The Political Economy of

Land Use Exactions (1993)...........ccccscccseseeeeereseceesees 12

TABLE OF AUTHORITIES (cont.)

Peter A. Buchsbaum, Should Land Use be Different?

Reflections on Williamson County, in Taking Sides on

Takings Issues: Public and Private Perspectives,

(A.B.A. 2002; Thomas E. Roberts, ed.) ............0...0....... 4

Development Exactions (Frank & Rhodes, eds.

PE cilities Mieiteitinichchelactiilaibatisaitilitadbiaibendecisibessepsenee 12

Robert H. Freilich, The Public Interest is Vindicated:

City of Monterey v. Del Monte Dunes,

I ee ne eee 3

Oliver Wendell Holmes, The Common Law

ne iiamuaes 16

Timothy J. Kassouni, The Ripeness Doctrine and the

Judicial Relegation of Constitutionally Protected

Property Rights, 29 Cal. West. L. Rev. 1 (1992).......... 4

Landis, Raising the Roof: California Housing

Development Projections and Constraints, 1997—

pS i A A ME 5 15

Landis, Larice, Dawson & Deng, Pay to Play:

Residential Development Fees in California Cities

EE ee 15

Prof. Daniel R. Mandelker, Testimony before the

House Judiciary Committee, reprinted in

fg 0 ecececsaneneonee 4

TABLE OF AUTHORITIES (cont.)

Mathur, Waddell & Blanco, The Effect of Impact Fees

on the Price of New Single-Family Housing,

41 Urb. Studies 1303 (2004) .0.........cccccccscssseeeseeseeeeees 15

National Association of Home Builders, Cost of Doing

Business. The Business of Building —- Measuring Your

Se Go takeviensciiahaisnnies> hadlabtidiiiamnmasiaiaiin 12

National Association of Home Builders, Determining

the Numbers of Households Priced Out of a Market

Distinction Between Legislative and Adjudicative

Decisions in Dolan v. City of Tigard, 75 N.Y.U. L.

ERE, Fare Ce crenncscentpaiitcianineceteldgbitensiiiiiincnets 11

James C. Nicholas, et al., A Practitioner's Guide to

Development Impact Fe s (1991) .......ccccccceceeeeeeerenees 12

“Not In My Back Yard”, Removing Barriers to

Affordable Housing, Report to President Bush and

Secretary Kemp by the Advisory Commission on

Regulatory Barriers to Affordable Housing (1991)....13

Gregory Overstreet, Update on the Continuing and

Dramatic Effect of the Ripeness Doctrine on Federal

Land Use Litigation, 20 Zoning & Plan. L. Rep. 17

Pay to Play,

——EE =

vu

TABLE OF AUTHORITIES (cont.)

Raising the Roof,

http://www.hed.ca.gov/hpd/hre/rtr/int Ir. htm. ............. 15

3 Arden H. Rathkopf’s, The Law of Zoning and

Planning, Ch. 40, Rezonings: Substantive Validity

and Standards for Judicial Review, §§ 40: 18

Rezonings as Quasi-Judicial Acts: Standards of

I I isla cicccetliiaiaalt tides, 7-8

Thomas E. Roberts, Ripeness and Forum Selection in

Fifth Amendment Takings Litigation, 11 J. Land Use

RRS ARERR oe RR 4

Fred R. Shapiro, The Oxford Dictionary of American

Legal Quotations (1993) ............cccccscsssssssesessessessseeeees 10

Snyder & Stegman, Paying for Growth: Using

Development Fees to Finance Infrastructure (1986)...12

BRIEF OF THE NATIONAL ASSOCIATION

OF HOME BUILDERS AS AMICUS CURIAE IN

SUPPORT OF THE PETITIONERS

The National Association of Home Builders

(“NAHB”) has received the parties’ written consent to file

this brief as amicus curiae in support of the petitioners, and

has filed letters of consent with the Clerk of the Court.!

THE NAHB’S INTEREST ARISES FROM ITS

MEMBERS’ CONCERNS AS TO THEIR ABILITY

TO RECOVER FOR THE INJURY SUFFERED BY

THEM WHEN THEY ARE FACED WITH

WRONGFUL EXACTIONS

The NAHB represents over 215,000 builder and

associate members throughout the -United States. Its

members include people and firms that construct and

supply single family homes as well as apartment,

condominium, commercial and industrial builders, land

developers and remodelers. It is the voice of the American

shelter industry. It is, therefore, concerned with any

judicial decision that allows essentially unreviewable

exactions to be . on new development, and then

effectively strips federal courts of any role in the

judicial review process.

The NAHB has appeared before the Court as an

amicus curiae or as “of counsel” to the landowners in a

number of cases involving the rights and remedies of

landowners who have versely affected by

overnmental actions. These include: Agins v. City of

iburon, 447 U.S. 255 (1980); San Diego Gas & Elec. Co.

v. City of San Diego, 450 U.S. 621 (1981); Williamson

County Reg'l Planning Comm'n v. Hamilton Bank, 473

1 No counsel for any of the parties authored an ry! ye of this

brief. No person or entity other than the NAHB has made

any contribution to the preparation or submission

of this brief.

2

U.S. 172 (1985); MacDonald, Sommer & Frates v. Yolo

County, 477 U.S. 340 (1986); First English Evangelical

Lutheran Church of Glendale v. County of Los Angeles,

482 U.S. 304 (1987); Nollan v. Cal. Coastal Comm'n, 483

U.S. 825 (1987)?; Lucas v. §.C. Coastal Council, 505 U.S.

1003 (1992); Dolan v. City of Tigard, 512 U.S. 374 (1994);

Babbitt v. Sweet Home Chapter of Communities for a Great

Or., 515 U.S. 687 (1995); Suitum v. Tahoe Reg'l Planning

Agency, 520 U.S. 725 (1997), City of Monterey v. Del

onte Dunes at Monterey, Lid., 526 U.S. 687 (1999);

Palazzolo v. Rhode Island, 533 U.S. 606 (2001); Solid

Waste Agency of N. Cook County v. United States Army

Corps of. Eng 'rs, 531 U.S. 159 (2001); Tahoe-Sierra Pres.

Council; Inc. v. Tahoe Reg'l Planning Agency, 535 U.S.

302 (2002); Borden Ranch P’Ship v. United States Army

Corps of Eng’rs, 537 U.S. 99 (2002); City of oe

Falls v. Buckeye Cmty. Hope Found., 538 U.S. 188 (2003);

and S. Fila. Water a Dist. v. Miccosukee Tribe of

Indians, 124 S. Ct. 1537 (2004).

SUMMARY OF THE ARGUMENT

In Williamson County Reg'l Planning Comm'n v.

Hamilton Bank, 473 U.S. 172 (1985), this Court held that a

claim that governmental action had resulted in a regulato

taking, im _ violation of the Fifth and Fourteent

Amendments, was not ripe for review until the claimant had

first sought just compensation using state provided

ures. application of Williamson County by the

ower federal courts has lead some courts — such as the

Ninth Circuit in the case at bar — to effectively prohibit a

latory taking claim from ever being heard by any

fi ] court. Courts of Appeals, such as the Second

Circuit in Santini v. Connecticut Hazardous Waste Mgmt.

Serv., 342 F.3d 118 (2d Cir.), cert. denied, 125 S. Ct. 14

(2004), have taken a completely opposite position. The

combination of the diametrically opposed positions of the

2 The Court's opinion cited the NAHB’s brief. (483 U.S. at

840.)

—_— a

TS

3

Second and Ninth Circuits, and the role that the federal

courts should play in forming the law of regulatory takings,

— strongly that this Court should consider whether the

policy set forth in Williamson County should be revisited.

Further, the reach of this Court’s decision in Dolan

v. City of Tigard, 512 U.S. 374 (1994), which held that a

municipality must justify the imposition of an exaction as a

condition of a land use approval by demonstrating a “rough

proportionality” between the impact caused by the new

development and the exactions imposed to mitigate it, has

lead to substantial confusion among lower courts

throughout the nation.

The reach of both Williamson County and Dolan

have a substantial impact on the ability of American

developers to deliver affordable housing. The grant of this

Court’s writ of certiorari to clarify the application of those

cases is sorely needed.

ARGUMENT

I.

THE PROCEDURE MANDATED BY WILLIAMSON

COUNTY DESPERATELY NEEDS FIXING

The petitioners have pointed out the problems which

have arisen as a result of this Court’s decision in

Williamson County. (Petition at 6-10). The language used

by the petitioners doesn’t begin to match that used by the

commentators who have derided the problems spawned by

Williamson County as “worse than mere chaos,” “absurd,”

3 Robert H. Freilich, The Public Interest is Vindicated: City o

1 v. Del Monte Dunes, 31 Urb. Law. 371, 38

4 Gregory Overstreet, Update on the Continuing and Dramatic

Effect of the Ripeness Doctrine on Federal Land Use

Litigation, 20 Zoning & Plan. L. Rep. 17, 27 (1997).

4

“nonsense,”> “riddled with obfuscation and inconsistency,”®

a “Kafkaesque maze,”’? and “a fraud or hoax on

landowners,”® just to name a few.

As discussed by the petitioners, this Court is faced

with a clear split amongst Circuits on the question of

whether claim preclusion (collateral estoppel) can be

avoided by a landowner who makes a reservation in state

court of the right to have a subsequent federal court decide

federal takings claims, a procedure analogous to that

authorized in the abstention context by England v.

Louisiana State Bd. of Med. Exam'rs, 375 U.S. 411 (1964);

(Petition at 6-10).

Put another way, can a takings claim ever be

decided by a federal court? The Sixth Circuit recently

expressed its understanding that this Court had not intended

to always preclude federal court review of Fifth

Amendment takings claims:

“In the takings realm, where Williamson

County prong-two ripeness combined with res

judicata law would otherwise bar all federal

takings claimants from the door of the district

court — a result clearly not contemplated by the

Court in Williamson County — this sort of

> Peter A. Buchsbaum, Should Land Use be Different?

Reflections on Williamson County, in Taking Sides on

Takings Issues: Public and Private Perspectives 480

(Thomas E. Roberts, ed., A.B.A. 2002).

6 Testimony of Professor Daniel R. Mandelker before the

Judiciary Committee, U.S. House of —s

reprinted in 31 Urb. Law. 195 at 234, 236 (1999).

7 Timothy J. Kassouni, The Ripeness Doctrine and the

Judicial Relegation ae. Protected Property

Rights, 29 Cal. West. L. Rev. 1, 51 (1992).

8 Thomas E. Roberts, Ripeness and Forum Selection in Fifth

Nis Litigation, 11 J. Land Use & Envtl. L.

—_ = —== —_—

~~ OU . a

5

extension of England to unwilling state court

litigants is necessary to avoid grave

unfaimess.” DLX, Inc. v. Kentucky, 381 F.3d

511, 523 n. 9 (6th Cir. 2004).

At the very least, the ripeness elements of

Williamson County have resulted in substantial delays

before a federal court hears a takings case. If the Court of

Appeals’ decision in the case at bar is allowed to stand,

then Williamson County's state procedure requirement will

be transmitted into an outright denial and no federal court

in the Ninth Circuit will ever hear a federal takings claim.

If that is what this Court contemplated in Williamson

County, then it should say so.

PROPERTY CAN BE WRONGLY TAKEN

THROUGH A LEGISLATIVELY IMPOSED

EXACTION AS EASILY AS IT CAN THROUGH AN

AD HOC ADMINISTRATIVE

DECISION

A. This Court Has Recognized That A slative

Act Can Result In A Taking —

This Court has frequently — and recently — held that

a legislative enactment can result in an unconstitutional

taking. See, e.g., Babbitt v. Youpee, 519 U.S. 234 (1997),

which, for a second time, following Hodel v. Irving, 481

U.S. 704 (1987), held the escheat provision of the Indian

Land Consolidation Act, 25 USC. § 2206,

unconstitutional. See also the plurality opinion in Eastern

Enterprises v. Apfel, 524 U.S. 498 (1998), which held that

the application of the Coal Industry Retiree Health Benefit

Act of 1992, 2 U.S.C. 98 9701-9722, was unconstitutional

insofar as it made the plaintiff liable for millions of dollars

in contributions to fund health care benefits based on its

predecessor company’s activities decades earlier.

B. Dolan Itself Involved A Legislatively Imposed

Exaction

Dolan is the case which has given rise to the

question now before this Court: whether a legislatively

imposed exaction is entitled to more deference than one

imposed through an ad hoc administrative proceeding.

However, Dolan did not involve an ad hoc decision; it

merely applied the required dedication standards set forth in

Tigard’s Community Development Code (“CDC”):

“The CDC required property owners in the

area zoned Central Business District to comply

with a 15 per cent and landscaping

requirement, .... BC requires that new

development facilitate [a plan for a

pedestrian/bicycle pathway] by dedicating land

for pedestrian pathways where provided for in

the pedestrian/bicycle pathway plan.” 512

U.S. at 377-378.

Nevertheiess, footnote 8, on page 391 states:

“Here, by contrast, the City made an

adjudicative decision to condition petitioner’s

lication for a building permit on an

individual parcel.”

Justice Souter, in his dissent, pointed out that

footnote 8 misstated the genesis of the condition:

“The majority characterizes this case as

involving an ‘adjudicative decision’ to impose

permit conditions, ante, at 391, n. 8, but the

it conditions were imposed pursuant to

igard’s Community Development Code.”

512 U.S. at 413, n.*.

Thus, the predicate for the numerous decisions

which turn on the manner in which an exaction has been

imposed — legislative or administrative — is not justified by

7

ve <=

5

the facts of the very case cited as the basis for the

dichotomy.

THE CHARACTERIZATION OF GOVERNMENTAL

ACTION AS LEGISLATIVE VS. ADMINISTRATIVE

HAS PROVED TO BE UNWORKABLE

As subsection II. B, supra, points out, it is difficult

to determine just when a particular action should be

characterized as legislative as opposed to administrative,

particularly in the land use context. In Town of Flower

Mound v. Stafford Estates Lid. P’ship, 135 S.W.3d 620

(Tex. 2004), the Texas Supreme Court found that a

requirement in the Town’s municipal code, which required

that a developer replace a perfectly good asphalt with

a more expensive concrete road (notwithstanding the fact

that the development did not create the n for the

replacement), constituted a compensable taking. In doing

so, the Court replied to the Town’s argument that Dolan

applied sy Be adjudicative decisions. After rejecting the

argument, the Court stated:

“Nor are we convinced that a workable

distinction can always be drawn between

actions denominated adjudicative and

legislative. ...” 135 S.W.3d at 641.

For example, state courts are split on whether a

rezoning is always a legislative act. California holds that

the rezoning of a single parcel of land, “whatever the size

of the parcel affected,” is a legislative act. Arnel

Development Co. v. City of Costa Mesa, 620 P.2d 565, 567

(Cal. 1980). California is in the majority; however, there

are a substantial number of stetes which hold that the

rezoning of small parcels of are to be reviewed as

administrative acts. 3 Arden H. Rathkopf, The Law of

Zoning and Planning, Ch. 40, Rezonings: Substantive

Validity and Standards for Judicial Review, §§ 40: 18-25,

Rezonings as Quasi-Judicial Acts: Standards of Judicial

Review (2004).

In Harris v. County of Riverside, 904 F.2d 497 (9th

Cir. 1990), the Court of Appeals held that the rezoning of

the plaintiff's .75 acre site “ a California County was so

individualized, and had such a specific impact on the

— that the failure to give the plaintiff notice and an

rtunity to be heard before the rezoning — which came

i ut, in part, because of the importunings of a local city

council member — violated the plaintiff's right to

substantive due process.

“In determining when the dictates of due

process apply, however, we find little guidance

in formalistic distinctions between ‘legislative’

and ‘adjudicatory’ or ‘adjudicative’

government actions.” 904 F.2d at 501.

Harris was followed in Resternedld Brothers

Investment Co. v. City of Sterling Heights, 949 F.2d 890,

895-897 (6th Cir. 1991), on very similar facts.

See also Dudek v. Umatilla County, 69 P.3d 751

(Or. Ct. App. 2003), where the County's Development

Ordinance required a minimum 60 foot right of way in

connection with a subdivision which would end up in a

private road serving ae or more parcels. 69 P.3d at 753,

n. 4. The County, relying on Dolan’s requirement of rough

— . heck not to impose the requirement

use the Rage of doing t../ y mage age A out of

proportion to impact ca y elopment

The Oregon Court of Appeals recogn mized thet the Co ‘y's

on Court of Appeals i t ounty’s

Development Ordinance applied broadly but found

discretion — not contained in the Ordinance — which took

the ee? s decision out of the legislative realm. Fairly

read, ek is actually a — imposed exaction

which the court felt went too

These are but a few of the many cases which

demonstrate the difficulty of determining whether, and in

what situations, Dolan applies.

IV.

LEGISLATIVELY IMPOSED EXACTIONS CAN BE

EASILY IMPOSED ON “OTHERS”

The petitioners have quoted Justice Thomas's

dissent, joined by Justice of onnor, to the denial of

certiorari in Pa ng Ass'n of Georgia, Inc. v. City of

Atlanta, 515 U.S. 1116 (1995), which pointed out that “{a]

city council can take just as well as a planning

commission can.” (Petition at 11.) Implicit in this

argument is the understanding that it is both tempting — and

easy — to ~~ ee a cost on a small number of individuals

particularly if, is so often the case in residential

development, the payor is an out-of-town corporation

which doesn’t even have a vote. The courts of California

have recognized the unfairness of this situation in an

analogous context.

In California Bldg. Indus. Ass'n v. Governing Bd. of

the Newhall School Dist., 253 Cal. Rptr. 497 (1988). the

nee of - held that a voter approved “special tax,”

on new development, was actually a

yo ler which was invalid because it exceeded the

state mandated limit.

“Section 4 [of Art. XIIIA of the

California Constitution] provides that the

special taxes imposed by cities, counties and

districts must be imposed ‘on such

, > = —— discussed _— es

interpret this directive language to prec

taxes which the electorate impose on others

and not directly on themselves ....”. 253 Cal.

Rptr. at 511.

10

The Court of Appeal was simply not going to allow

the voters to approve a tax which could never be imposed

on the voters themselves.°

“To the school districts’

int tion of the phrase ‘on such district’

w allow the absurd consequence affected

by the voters in the imstant case -

overwhelming passage of a ‘tax’ which they

themselves do not have to pay, either directly

or indirectly.” 253 Cal. Rptr. at 512 (footnote

omitted).

Immunizing legislatively imposed exactions from

a ity requirement imposed by Dolan

allows majority carte blanche to require a developer —

not you, not me, but the man behind the tree'® — to pay for

problems which new development did not create.

Vv.

THE PETITIONERS HAVE UNDERSTATED THE

NUMBER OF DECISIONS WHICH HAVE

WRESTLED WITH THE APPLICATION OF DOLAN

The petitioners cite a number of cases which have

held that either does, or does not, apply to

legislatively imposed exactions. (Petition at 10 - 12.) The

petitioners have not, however, exhausted the field. This is

particularly true in California where, on one day, one Court

of Appeal decided three cases, all on the basis that rough

proportionality did not apply to legislatively imposed

exactions. Agencia la Esperanza Corp., Inc. v: Orange

County Bd. of Supervisors, 2002 WL 681798 (Cal. App.

2002), cert. ied, 538 U.S. 916 (2003); Extra Space of

Laguna Hills v. City of San Clemente, 2002 WL 700930

(Cal. App. 2002); and Extra Space of 3 Hills v. San

a Hills Transp. Corridor Agency, 2002 WL 683835

(Cal. +E 2002). The three cases together involved

l

roughly 50,000.

Other cases holding that Dolan does not apply to

legislatively 1 exactions include Wonders v. Pima

County, 89 P.3d 810, 816 (Ariz. Ct. App. 2004): Greater

Atlanta Homebuilders Ass'n v. DeKalb County, 588 S.E.2d

694, 697 (Ga. 2003); Homebuilders Ass'n v. Tualatin Hills

Park & Recreation Dist., 62 P.3d 404, 409 (Or. Ct. App.

2003); Home Builders Ass'n v. City of Napa, 108 Cal. Rptr.

2d 60, 65 (2001), cert. denied, 535 U.S. 954 (2002); and

Arcadia Dev. Corp. v. Ci Bloomington, 552 N.W.2d

281, 286 (Minn. Ct. App. 1996).

na eae Oa Sees OC

Village of Sc . EB. . (ill. Ct. App.),

1 denied, 667 N.E.2d 1055 (Ill.), cert. denied, °E9

US. 976 (1996), held that there is no reason to differentiate

between exactions imposed legislatively or adjudicatively.

See also, Note, the Distinction Between Legislative

and Adjudicative Decisions in Dolan v. City of Tigard, 75

N.Y.U. L. Rev. 242 (2000), which reviewed 29 cases

involving Dolan and concluded:

“The survey of the caselaw reveals that

the lower courts’ application of the legislative/

judicative distinction is inconsistent.” 75

N.Y.U. L. Rev. at 256. |

12

Vi.

EXACTIONS HURT AFFORDABLE HOUSING

The question of just how much a developer is

required to pay is more than academic; it directly affects the

ability and willingness of developers to provide badly

needed housing.

Economists may argue over just who bears the

incidence of exactions — the homebuyer, the developer, or

the landowner who sells to the developer — but there is no

uestion that there is an —— James C. Nicholas et al., A

ractitioner's Guide to lopment Impact Fees 61-68

(1991). Moreover, there is a general consensus that it is the

homebuyer who ends up paying for exactions in the long

run. Alan A. Altshuler & José A. Gémez-lbajfiez,

Regulations for Revenue: The Political Economy of Land

Use Exactions 98 (1993); Development Exactions 55

(Frank & Rhodes, eds. 1987); and Snyder & Stegman,

Paying for Growth: Using Development Fees to Finance

Infrastructure 100 (1986)."!

“Through various fees and assessments,

as well as _ requirements for offsite

ye sarap f a o.

e to pay for in ic

ot gM geese with new deve

power to — use,

localities have gradually shi the burden of

supplying such infrastructure and services from

the community at large to developers.

Developers pass the costs along to new

13

homebuyers, in some _ cases adding

substantially to the total cost of new housing.

“Impact fees are regressive because they

are assessed on a per-unit basis, rather than as a

percent of the value of the home. Those who

depend on affordable housing are forced to

absorb fees that are a substantial percentage of

the sales price of any home they purchase. For

example, exactions, dedications, and fees

account for as much as 30 percent of the cost

of housing in New Jersey.

“One consequence of high fee schedules

is.that developers opt to build ing only for

the higher end of the single-family market

ee Se more easily as a

proportion 0 es ice. Another

may be that | on prefer to

construct single-family as opposed to multi-

family projects. According to a recent Urban

Land Institute study, it is easier for developers

to pass the fees along to homebuyers than to

renters. This preference can have a particularly

—— effect on the development of

multifamily housing and may be lally

responsible for the fact that multifamily

share of all housing starts declined 10

mages ad ints between 1985 and 1989.

Eoont on more affordable housing

are clearly disadvantaged when new

shifts to the income single-

family end of the market.” “Not In My Back

Yard". Removing Barriers to Affordable

Housing, ‘aoe by a President Bush and

on pent Bang by An to Affordable Housing.

2-10-11 (1991) (footnotes omitted).

The statements contained in “Not In My Back Yard”

are as true today as they were in 1991.

14

“e California development fees are extremely

high. Single-family homebuilders in

California in 1999 paid an average of

$24,325 per unit in __ residential

development fees, based on the results of a

sample of 89 cities and counties. Owners

of new infill homes paid an average of

$20,327 per unit. Apartment developers

paid an average of $15,531 per new

apartment unit.

* * *

“e Fee-setting is not routinely linked with

capital improvements planning. Local

capital facilities fees are usually

determined using an average cost

methodology, e.g., historical or projected

capital costs are divided by the current or

projected future lation to yield a per

capita or per household cost. As a result,

the link between fces and gy capital

improvements programming (assuming

such activities take place) ; typically a

weak one.

“A second issue of concern regarding

local development fees concerns their

contribution to vd high cost of eo

Theory ests, some empirical ies

Seoeet, Se Sa eos Sew he

ing prices, especially ng

Cm of high housing demand. Among the

findings of the research in this area:

“e Ca'ifornia’s high residential development

fees significantly contribute to its _

housing costs and prices. Among

sample of California jurisdictions, fees

account for an av of ten percent of

the median price of new single-family

15

“e The contribution of fees to home prices is

test in affordable markets. Among

individual communities in the sample,

development fees accounted for less than

five percent of new oe in

expensive communities. At the opposite

end of the price m, fees accounted

for more 15 percent of new home

prices in many jurisdictions that provide a

significant share of their respective

region’s affordable housing — making the

fee issue all the more significant.” Landis,

Larice, Dawson & Deng, Pay to Play:

Residential Development Fees in

California Cities and Counties, 1999, 2-3

(2001), prepared for the Division of

Housing Policy Devel t of the

California Department of Housing and

Community Development. !2

The bottom line is that California alone is going to

have to produce an average of 220,000 housing units every

year until 2020 just to keep up with the expected growth in

lation. Landis, Raising the Roof: California Housin

lopment Projections and Constraints, 1997-2020, 7-

(2000), prepared for the California Department of Housing

and Community Development. !3

The results found in Pay to Play are not unique to

California. A study of housing prices in King County,

Washington, came to exactly the same conclusion. Mathur,

Waddell & Blanco, The Effect of Impact Fees on the Price

d Bg Single-Family Housing, 41 Urb. Studies 1303

).

1? A copy of Pay to P may be found on the internet at

http://www.hcd.ca.gov y2play/fee_rpt.pdf.

'? A copy of Raising the R may be found on the internet at

http://www.hed.ca.gov. rtr/intir.htm.

16

Based on recent census data and typical lendin

ractices, each $1,000 increase in the price of a $100,

en drives 420,000 households out of the home buying

market. NAHB, Determining the Numbers of Households

Priced Out of a Market (2004). Unwarranted exactions on

development, wt ‘ch, sooner or later, translate into higher

home prices, thus has a direct adverse effect on the nation’s

supply of affordable housing.

There is no practical way in which badly needed

affordable housing can be provided unless the exactions

imposed on new development are limited to those roughly

proportional to the impacts created by that new

development.

VIL.

CONCLUSION

If, as Justice Holmes stated, “The life of the law has

not been logic: it has been experience,”'* then 20 years of

——- with the application of Williamson County,

culminating in the case at bar, should call for a searching

reexamination of its continued viability. What apparently

was intended to be a hurdle to be overcome has, at least in

the Ninth Circuit, become a plaintiff's dead end. This

Court has not been afraid to reverse itself when it has

realized that its original decision was wrong. Compare Erie

R. Co. v. Tompkins, 304 U.S. 64 (1938), with Swift v.

Tyson, 41 U.S. (16 Pet.) 1 (1842).

Developers in general, and the NAHB in particular,

do not contend that new development should not be

uired to mitigate impacts created by that development.

All that they is that they not be required to pay more

than an amount roughly proportional to the i created

— to not be required to do more than mitigate t impacts

14 Oliver Wendell Holmes, The Common Law 5 (Mark

DeWolfe Howe ed., Belknap Press of Harvard University

Press 1963) (1881). ,

a

17

~ which is what Dolan stands for. If all that is required to

avoid the test of rough proportionality is to embody the

exactions in a rate sheet which is ministerially applied, then

Dolan’s promise is gutted.

“[T]he Supreme Court has left unsettled the

question —— whether Dolan’s rough

proportionality test applies to legislative, as

opposed to administrative — exactions.”

Garneau v. City of Seattle, 147 F.3d 802, 811

(9th Cir. 1998).

It is time that this Court answer that question.

Accordingly, the NAHB respectfully requests that

the Court grant the petition for a writ of certiorari sought

by the petitioners.

Dated: November 12, 2004 Respectfully submitted,

Mary V. DiCrescenzo Kenneth B. Bley

Duane J. Desiderio (Counsel of Record)

Felicia K. Watson COX, CASTLE &

THE NATIONAL NICHOLSON LLP

ASSOCIATION OF HOME Attorneys for Amicus Curiae

BUILDERS THE NATIONAL

ASSOCIATION OF HOME

BUILDERS