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Meeting Date: February 27, 2001 

Subject/Title: Authorize City Attorney to add the City to an amicus brief in San Remo Hotel
v. City and County of San Francisco 

Submitted by: Dennis Beougher, City Attorney

Approved by: Jon Elam, City Manager

Authorize the City Attorney to add the City of Brentwood’s name to an amicus brief in San Remo Hotel v. City and County of San Francisco concerning an appeal of an appellate court’s decision to the California Supreme Court that will have a major impact on the ability of local agencies to enact development impact fees and other land use regulations. 

In this case, the court of appeal made a significant departure from the judicial standard for review of development fees. The California Supreme Court has granted review
And will determine the appropriate standard for judicial review of land use regulations including development impact fees. 

The facts of this case involve the owners of single room occupancy hotels, a source of affordable housing in San Francisco, were increasingly seeking to covert their properties to serve the more lucrative tourist industry. In response, the City adopted the Hotel Conversion Ordinance ("HCO") to protect the city's stock of affordable housing. The ordinance allows such hotel conversions to proceed on the condition that the hotel owners provide replacement housing or pay an in lieu fee. The HCO applies to more than 500 hotels. 

The hotel owner contends that the HCO effects a "taking" of private property. In making the claim, the owner has requested that the court adopt a more severe standard of review (heightened scrutiny). The court in the past defer to legislatively adopted fees and applied the more severe standard only when the city requires the dedication of property as a condition of approval in an adjudicatory action involving an individual development. The court of appeal reasoned that since the ordinance affected only 500 hotels and did not apply to all properties in the city the fee amounted to an exaction like a dedication of land. 

This case goes beyond affordable housing in San Francisco. Mitigation fees are at the center of many housing and environmental programs, including CEQA and inclusionary zoning regulations. If the court of appeal decision stands, even the most basic impact fees will receive the increased scrutiny. At the very least, such a ruling would make implementing development fee programs more expensive and burdensome. At most, it places an essential source of municipal revenue at risk. 

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