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CITY COUNCIL AGENDA ITEM NO. 3

Meeting Date: May 9, 2000

Subject/Title: Authorize City Attorney to join amicus brief in Home Builders Association v. City of Napa

Submitted by: Dennis Beougher, City Attorney

Approved by: Jon Elam, City Manager

RECOMMENDATION

Authorize the City Attorney to join amicus brief in Associated Home Builders Association of Northern California v. City of Napa.

BACKGROUND

The City of Napa adopted an inclusionary housing ordinance, similar to that adopted by at least 75 cities and counties statewide, to address affordable housing created by market rate residential projects that required 10% of the new homes be affordable and related rent and resale requirements to ensure continued affordability. Developers of residential units have various options to satisfy this requirement, including dedicating land, construction of affordable units, or payment of in-lieu fee to construct new or improve the existing supply of affordable housing.

The City did not adopt the ordinance without taking input from all those impacted by the proposed ordinance. After the first public meeting in early 1999, extensive public comments from the building, development, and realty communities was provided and the proposed ordinance was substantially revised to address the concerns and a compromise ordinance was adopted.

After the ordinance went into effect, the Pacific Legal Foundation filed a lawsuit alleging (1) there was no nexus showing between the development of market rate housing and the need for affordable housing; (2) the inclusionary fee was a development fee adopted in violation of AB 1600 provisions; and (3) the fee was a tax prohibited by Proposition 13, Proposition 62, and Proposition 218. The Superior Court agreed with the City’s arguments that there was current law supporting the fee and the lawsuit was premature. The plaintiff appealed the decision to the First District Court of Appeal.

While Brentwood does not currently have an inclusionary housing fee, it could decide in the future to adopt a similar ordinance. If the Court of Appeal rules in the plaintiff’s favor, this case could effect current fees and other mitigation fees now in effect in Brentwood and could be challenged as a tax under Propositions 13, 62, and 218. Also, the "heightened scrutiny" test could be applied, if adopted by the Court of Appeal, to the City’s exercise of its police power in such matters as zoning ordinances.

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