Agenda - Planning Commission - 12/03/2009

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I I i(J Zoning Bulletin August 25, 20091 Volume 31 No. 16 () Specifically; under "condition 10" of the project approval, Pal.ri:1er was re- quired to: "(1) provide 60 replacement low income dweJ.li.ng units, either on or off-site, or pay an in-lieu fee of $96,182.17 per unit for 60 units, for a to- tal of $5,770,930.20; and (2) execute a 'Covenarit and Agreement' to main- tain the rent restrictions Set forth in section 11.E of the Plan for at least 30 years after the [p]roject's certification of occupancy [was] issued." Both the city's planning and land use management committee and the city council sustained condition 10 of the project approval. The city council denied Palmer's administrative appeal. Pa:lmer appealed to court. Among other things, Palmer alleged that application of~. l1.C's affordable housing requirements to the Project violated California's Costa-Hawkins Rental Housing Act (the "Costa- Hawkins Act" or the "Act") (Cal. Civ. Code ~ 1954.53, subd. (a)). That Act declared that "'[n]otwithstanding any other provision of law,' all residential landlords may, except in specified situations, 'establish the ini- tial rental rate for a dwelling or unit.''' . The' superior court agreed with Palmer. It found that ~ 11. C's afford- able housing requirements were invalid because they were "fatally incon- sistent" with the Act. The city appealed. DECISION: Affirmed. (j '../ The Court of Appeal, Second District, Division 4, California, held that ~ l1.C's affordable housing requirements were void because they. were "hostile or inimical" (i.e., adverse) to the Costa-Hawkins Act. The court expla~ned that if an otherwise valid local legislation con- flicted with state law, the local law would be preempted by the state law and be void. A conflict would exist if the local law either expressly or impliedl.y "duplicates, contradicts, or enters an area fully occupied by [state] law.'; A local law would "contradict" a state law when it was hostile or adverse to it. Here the court found that ~ l1.C and condition 10 of the project ap- proval, "forc[ed] Palmer to provide affordable housing uillts at regulated rents in order to obtain project approval." The court found that require- ment was "hostile to the right afforded Under the Costa-Hawkins Act to establish the initial rental rate for a dwelling or unit." . . The city had argued that ~ l1.C did not conflict with the Act because . $ l1.C was "not a rent control statute that govem[ed] the entire rental housing market." According to the city, $ l1.C "simply mandate[d] ei- ther the replacement of 60 affordable units that were demolished on the Project site. . , or the payment of an in lieu fee." Unpersuaded, the court said the rent restrictions (under $ l1.E) placed on the units required to be built under $ 11.C conflicted with and were hostile to the Act. The court said that conflict existed "even if those restrictions appl[ied] only @ 2009 Thomson Reuters 7 53 . -