A legal dispute involving affordable housing laws in California could end up being decided by the U.S. Supreme Court. The issue at hand is whether or not local governments have a right to levy fines against real estate developers that choose not to earmark land for affordable housing. One attorney who commented on the issue said that he hopes that a future Supreme Court decision will be based on legal merits, not politics.
A state appeals court upheld the trial court's decision in the real estate dispute, 616 Croft Ave. v. City of West Hollywood, on Sept. 23. The court ruled against a real estate developer who was challenging city fines of almost $600,000. The developer was interested in building a subdivision and condominium complex with 11 units after demolishing two single-family homes that already existed on the property.
The City of West Hollywood reportedly approved the developer's infill project, but the in-lieu housing fee rose significantly before the developer secured building permits. When the developer requested the building permits, the fee for having no affordable housing on the property had increased to $540,000. Other fees were also levied against the developer. So far, the lower courts have found that the city created a legal use restriction that does not violate the developer's Fifth Amendment rights.
Before purchasing a piece of land, a real estate developer may want to learn about all of the city ordinances that could affect a project. A real estate attorney may be able to help a real estate developer by studying whether a particular development project is a good fit for a specific property. If there are permit issues during construction, an attorney may be able to help the developer to resolve them.
Source: Northern California Record, "Affordable housing legal dispute likely headed for U.S. Supreme Court," John Breslin, Oct. 4, 2016