HomeMy WebLinkAboutCOM 0200.040 2006-2008 To: Land Use Research Foundation
From: David Callies
In Re: Kauai Housing Policy Ordinance Draft
Date: January 3, 2007
I. INTRODUCTION
You asked that I review and analyze the Kauai County draft Housing Policy Ordinance
for the purpose of commenting upon its constitutionality under the U.S. Constitution's Fifrh
Amendment as interpreted by the U.S. Supreme Court. The draft appears to require that
residential developments of five or more dwelling units and "large" resort. commercial and
industrial developments provide workforce housing at substantially below prevailing market
prices equivalent to 30% of the total units constructed plus 10% of the project's land area, at the
time of rezoning or, presumably, if no rezoning is necessary, at a development permitting stage.
Furthermore, such workforce housing must be available within ("integrated...being mixed along
side market units") a residential project area, or suffer a further financial penalty if located
outside such a residential project area. Substantially identical requirements apply to resort,
commercial and industrial developments of 50 or more rooms, or which are estimated to generate
100 or more new "fulltime equivalent jobs," except that affordable units may be located outside
the project area "where no residential units are produced onsite" without penalty. The sole
"bonus" to which a developer may be entitled is limited expedited permit processing, except for
for projects with 100% workforce housing, at least 51% of which must be affordable, which
projects appear to be entitled to reduced development standards. The balance of the proposed
Housing Policy Ordinance -indeed, most of it - is devoted to ensuring that workforce housing
Comm. No. 200- ~'V
1 Ref. To: ~
Ref. Date
stays in the contemplated affordable housing range, through a series of transfer and buyback
restrictions.
II. CONCLUSION
While Kauai County should be congratulated for recognizing and attempting to address
the workforce and affordable housing shortage in the county -and in particular, ensuring that
that contemplated workforce units remain affordable over time - it may not do so except by
constitutional means. First, the draft Housing Policy Ordinance appears to "exact" the
workforce/affordable housing increment at an inappropriate and unconstitutional stage in the
land development process: rezoning. The premise upon which any and all legal land
development conditions -exactions, dedications, impact fees, in lieu fees -rests is that they are
development driven: the contemplated project will require public facilities for which the
landowner/developer must contribute a fair share. Rezoning, while it may be a necessary
precedent to land use and development, neither creates nor drives the need for public facilities. It
is therefore unconstitutional to require exactions of any kind as a condition for change of use by
means of zoning map amendments (rezoning).
Second, unless the county can demonstrate a clear rational and proportional nexus
between market cost developments and the imposition ofbelow-market cost housing set-asides,it
may not require them at any stage in the land development process. What scant precedent exists
for imposing such exactions on residential developments does so only when the local
government requiring such exactions provides a series of bonuses to help offset the cost of the
mandatory affordable housing set-asides. Thus, for example, a recent intermediate California
2
Court of Appeals so provided, but only after aetailed studies and at a far lower percentage (10%)
of affordable housing set-asides and -more importantly, against the backdrop of a California
statute which, in its recently amended form, requires such bonuses as soon as the affordable
units set-asides reach a threshold of 5%, and escalating sharply in terms of number and kinds of
bonuses as the percentage of affordable housing set-asides increases.
As to housing exactions or set-asides on commercial development, the principle -indeed
virtually only -federal case approving such set-asides did so only after the local government
requiring such set-asides engaged in thorough and detailed studies of the workforce jobs required
and generated by the proposed commercial development, which requirements were then cut in
half -far less than the 40% which the draft County of Kauai Housing Policy Ordinance would
require of such commercial development.
In sum, the proposed ordinance imposes the mandatory housing set-asides at the wrong
stage of the land development process, without nexus or proportionality, all required by the U.S.
Constitution's Fifth Amendment as interpreted by the U.S. Supreme Court.
III. ANALYSIS
A. The Constitutionality of Mandatory Affordable/Work1'orce Housing (Linkage)
Mandatory affordable housing requirements or linkage fees in lieu of housing raise two
basic takings issues. The first issue is whether such fees pass scrutiny under the Supreme
3
Court's "essential nexus" test in Nollan v. California Coastal Commission. ~ Because linkage
fees are generally a legislative form of exactions, the second issue is whether the "rough
proportionality" test in Dolan v. City of Tigard2 applies. The resolution of this second issue turns
in part on whether a jurisdiction accepts the administrative-legislative distinction, a question
which the Hawaii appellate courts have yet to resolve.
By way of background, "[t]he broad concept of linkage describes any of a wide range of
municipal regulations that condition the grant of development approval on the payment of funds
to help finance services and facilities needed as a result of development." 3 "In the context of
developing affordable housing, linkage refers to any scheme that requires developers to mitigate
the adverse effects ofnon-residential development upon the shortage of housing either indirectly,
by contributing to anaffordable-housing trust fund, or directly, by actually constructing
affordable housing.i4
Before addressing the issues, note that Hawai`i's impact fee statute, Hawaii Revised
Statutes 46-141 to 148, does not apply to housing linkage fees, and, indeed, expressly
excludes such fees from the authority granted to Hawaii's four counties to levy impact fees for
public facilities. Section 46-142(b) of the Hawaii Revised Statutes states that "impact fees may
~ 483 U.S. 825, 837 (1987).
~ 512 U.S. 374, 391 (1994).
' Holmdel Builders Assn v. Holmdel, 583 A.2d 277, 284 (N.J. 1990).
/d.; accord John A. Henning, Jr., Comment, Mitigating Price Effects wUh a Housing Linkage Fee, 78
Cali£ L. Rev. 721, 722 (1990) (linkage fees are a form of exactions that levy "fees on downtown office development
to subsidize low- and middle-income housing" (footnote omitted)); Jane E. Schukoske, Housing Linkage:
Regulating Development Lmpact on Housing Costs, 76 Iowa L. Rev. ]Ol 1, 1011 (1991) ("Housing linkage programs
require or offer inducements to private developers to produce affordable housing or to pay a sum for development of
affordable housing into housing trust funds."); 1 Land Use Law § 9.23 ("A number of cities have adopted exaction
programs that require downtown office and commercial developers to provide housing for lower-income groups or
contribute to a municipal fund for the construction of such housing." (footnote omitted)).
4
be imposed only for those types of public facility capital improvements specifically identified in
a county in a county comprehensive plan or a facility needs assessment study."5 However,
Section 46-141 defines "impact fees," as "the charges imposed upon a developer by a county or
board to fund all or a portion of the public facility capital improvement costs required by the
development from which it is collected, or to recoup the cost of existing public facility capital
improvements made in anticipation of the needs of a development."6 That same section also
defines "public facility capital improvement costs," and explains that such costs "do not include
expenditures for required affordable housing."~ Although Section 46-141 does not define
"required affordable housing," Section 516-1, which concerns leaseholds, explains that a
"[s]ustainable affordable development," requires, inter olio, the satisfaction of "the state or
county agency's affordable housing requirements as set forth in the applicable state or county
law, regulation, policy, or agreement."8 In addition, Section 46-143(c) imposes nexus and
proportionality requirements, providing that "[a]n impact fee shall be substantially related to the
needs arising from the development and shall not exceed a proportionate share of the costs
incurred or to be incurred in accommodating the development."9
In view of Section 516-1, Section 46-141's "required affordable housing" language likely
refers to housing exactions. For example, Section 2.94.030 of the Maui County Code requires
' Haw. Rev. Stat. § 46-142(6) (2006).
s Haw. Rev. Stat. § 46-141 (emphasis added).
' !d. The legislative history of Haw. Rev. Stat. § 46-] 41 does not explain what is mean[ by "required
affordable housing."
"Haw. Rev. Stat. § 516-1.
91d. § 46-143 (c).
5
that individuals seeking to build hotels must "construct affordable housing at a minimum of one
affordable housing unit for every four apartment-hotel, hotel, or motel rooms or fraction
thereof."10 Likewise, Section 11-4 of the Hawaii County Code, which is entitled "affordable
housing requirements" requires affordable housing when a rezoning occurs. ~ ~ Under Section
11-4, when the application rezones and seeks to create "[fJive or more residential units or lots," it
must "earn affordable housing credits equal to twenty percent of the number of units or lots
(rounded to the nearest .5)."~~ Accordingly, the Hawaii impact fee statute, HRS 46-141 to
148, likely does not apply to affordable housing requirements, and, consequently, does not apply
to linkage fees because such fees necessarily concern the government's expenditures for
affordable housing.13 Nonetheless, although linkage fees may not be subject to nexus and
proportionality tests statutorily, they may still be subject to such tests under the United States,
U.S. Const. amend. V, XIV, and Hawaii Constitutions, Haw. Const. art I, § 5.
Turning to the first issue, because linkage fees are a form of exactions they are subject to
the "essential nexus" takings test under Nollan.14 Under Nollan, "a permit condition that serves
the same legitimate police-power purpose as a refusal to issue the permit should not be found to
10 Maui, Haw., Maui County Code § 2.94.030.
Hawaii, Haw., Hawaii County Code § 11-4.
12 Id. § 11-4(b)(2).
" See Holmdel Builders Assn, 583 A.2d at 284.
14 483 U.S. 825, 837 (1987). See Commercial Builders oJN. Cal. v. Sacramento, 941 F.2d 872, 874 (9th
Cir. 1991).
6
be a taking if the refusal to issue the permit would not constitute a taking."15 In addition, under
Nollan, the government bears the burden of proving this nexus.tb In the context of linkage fees
in particular, one treatise explains that linkage fees satisfy this test "only if the municipality can
show that downtown development contributes to the housing problem~~ the linkage exaction is
intended to remedy."~$ There is no disagreement that Nollan's nexus test, or its close
equivalent, applies to linkage fees.
For example, in Commercial Builders ofN Cal. v. Sacramento,19 the Ninth Circuit held
that an ordinance which imposed a linkage "fee in connection with the issuance of permits for
nonresidential development of the type that will generate jobs,i20 was constitutional under
Nollan.21 The court explained that "the [o]rdinance was implemented only after a detailed study
is Nolan, 483 U.S. at 836 (emphasis added).
16 Dolan, 512 U.S. 391 n.8 (citing Nollan, 483 U.S. at 836).
A "housing problem," 1 Land Use Law § 9.23, is the typical interest which the Counties of Hawaii
identify as a legitimate state interest in Cheir ordinances, see, e. g., Maui, Haw., Maui County Code § 2.94.010 ("The
council finds that there is a critical shortage of affordable housing in the counTy."); Hawaii, Haw., Hawaii County
Code § 11-2(5) (setting forth the objective of"Requir[ing] large resort and industrial enterprises to address related
affordable housing needs as a condition of rezoning approvals, based upon current economic and housing
conditions"). In Assn of Owners v. Honolulu, 7 Haw. App. 6Q 742 P.2d 974 (1987), the Intermediate Court of
Appeals of Hawaii acknowledged the legitimacy of this interest in the context of the challenge to a condominium
declaration, stating that "affordable housing and public parking for downtown Honolulu were important [o the
welfare of the community." Id. at 78, 742 P.2d at 985.
18 I Land Use Law § 9.23.
~e 941 F.2d 872 (9th Cir. 1991).
zo !d. at 873.
21 Id. at 875.
7
revealed a substantial connection between development and the problem to be addressed."zz
Consequently, the court found "that the nexus between the fee provision here at issue, designed
to further the city's legitimate interest in housing, and the burdens caused by commercial
development is sufficient to pass constitutional muster."zs
Even courts that decline to apply heightened scrutiny to legislatively imposed fees
nonetheless apply some form of Nollan's essential nexus test. For instance, in San Remo Hotel
L. P. v. City & County of San Francisco,24 although the California Supreme Court reaffirmed that
legislatively imposed, ministerial impact fees are not subject to the tests in Nollan or Dolan,25 it
nonetheless required that there "be a `reasonable relationship' between the fee and the
deleterious impacts for the mitigation of which the fee is collected,"26 Similarly, in Holmdel
Builders Association v. Township of Holmdel,~~ although the Supreme Court of New Jersey
concluded that legislative fees are not subject to the heightened scrutiny of its "but-for,"
`Yational-nexus" test, it still required that some relationship between the development and the
harm caused.28 The court essentially explained that "relationship between the private activity
zz /d.
z3 /d.
24 41 P.3d 87 (Cal. 2002).
zs /d. at 102-03.
ae Id. at 103 (citations omitted).
27 583 A.2d 277 (NJ. 1990).
28Id. at 288.
8
that gives rise to the exaction and the public activity to which it is applies," must be "founded on
[an] actual, albeit indirect and general, impac*."z9
Notably, the only part of the Nollan test that was not applied in San Remo or Holmdel
Bulders Association, is the shifting of the burden of proof to the government. That fact that the
burden of proof shifts to the government was not clear in Nollan; however, the Court clarified
this fact in Dolan, because there, the Court cited to Nollan when it said that "the burden properly
rests on the city." 30 What is important, however, is that all jurisdictions at least require some
form of nexus between the harm caused by the development and the interest which the exaction
purportedly serves. Thus, even under the California or New Jersey approach, Nollan's
requirement that the "same" interest be served by the exaction,31 still applies, albeit in different
terms.
The second and more difficult issue in a takings analysis of a linkage fee is whether the
Court's "rough proportionality" test in Dolan applies.32 That test, in addition to requiring an
"individualized determination" of "rough proportionality," 33 also shifts the burden of proof to the
ze /d.
3u Dolan, 512 U.S. 391 n.8 (citing Nollan, 483 U.S. at 836).
Nollan, 483 U.S. at 836.
'Z Dolan, 5I2 U.S. at 391. There is a split of authority on whether Dolan applies to linkage fee, see I
Land Use Law § 9.23 ("Post-Dolan a court must also decide whether a linkage fee is a legislative fee subject to the
rational basis test, or an adjudicative fee that requires an individualized determination and must satisfy the
heightened judicial scrutiny requited by Dolan.").
"Dolan, 512 U.S. at391.
9
government to prove such proportionality.34 Although the two appellate courts which have
considered this issue in the context of linkage fees both concluded that heightened scrutiny is
inappropriate,35 the rationale in those decisions is not limited to the context of linkage fees. The
issue extends to all legislatively imposed, non-discretionary (or ministerial) fees.
There are essentially two major approaches to the question of legislatively imposed fees.
On one hand, some jurisdictions hold Dolan's heightened scrutiny inapplicable to legislative fees
by virtue of the Court's rationale in Nollan. First, such jurisdictions observe that in Dolan, the
Court distinguished "generally applicable legislative zoning regulations" from an "adjudicative
decision." 36 Next, they note the Court's concern in Nollan that "unless the permit condition
serves the same governmental purpose as the development ban, the building restriction is not a
valid regulation of land use but an out-and-out plan of extortion."37 Bridging the logical gap,
these courts argue that such regulatory leveraging (i.e., extortion) poses much less of a threat at
the legislative level than at the administrative level.38 These courts thus conclude that Dolan's
procedural safeguards are unnecessary beyond the administrative decisionmaking context. The
Ninth Circuit, Arizona, California, Colorado, New Jersey, and Oregon adhere to this approach.39
34 Id. at 391 n.8.
35 See San Remo, 41 P.3d at 102-03; Holmdel, 583 A.2d at 288.
3B Dolan, 512 U.S. at 39] n.8.
Noldan, 483 U.S. at 837 (citation and quotation marks omitted).
See, e.g., Ehrlich v. City gfCulver City, 911 P.2d 429, 444 (Cal. 1996).
3v See Carneau v. City of Seattle, 147 F.3d 802, 815-16 (9th Cir. 1998); Home Builders Assn of Central
Ariz. v. City ofScottsdole, 930 P.2d 993, 1000 (Ariz. 1997); San Remo, 41 P.3d at 102-04; Krupp v. Breckenridge
Sanitation District, 19 P.3d 687, 696 (Colo. 2001) (en banc); Holmde! Builders Assn, 583 A.2d at 288; Home
Builders Assn v. Tualatin Hills Park & Recreadion Dist., 62 P.3d 404, 406 (Or. Ct. App. 2003).
10
For example, the Supreme Court of New Jersey illustrated the applicability of this
approach to non-residential development linkage fees in Holmdel Builders Association.40 There,
in deciding whether to apply a "rational-nexus" test or a "reasonable relationship" test, the court
found "a sound basis to support a legislative judgment that there is a reasonable relationship
between unrestrained nonresidential development and the need for affordable residential
development."a~ This relationship, the court explained, need only be "founded on the actual,
albeit indirect and general, impact that such nonresidential development has on both the need for
lower-income residential development and on the opportunity and capacity of municipalities to
meet that need." Harmonizing its inclusionary zoning doctrine, the court noted that such zoning
is "itself is based on that relationship.i42
On the other hand, a number of jurisdictions have strictly followed Dolan in the context
of legislative monetary exactions. For example, in Town of Flower Mound v. Stafford Estates
Ltd. Partnership,43 the Supreme Court of Texas narrowly held that a legislative exaction
concerning off-site public improvements was properly reviewed under Dolan.44 There, the town
had the discretion to grant Stafford, a developer, a variance from the exaction requirement,
40Holmdel, 583 A.2d at 288.
ai /d.
az Id
as 135 S.W.3d 620 (Tex. 2004).
as Id. a[ 622-24.
11
which Stafford had requested and was denied.45 While analogizing to Nollan and Dolan, the
court reasoned:
It is enough to say that we can find no meaningful distinction between the
condition imposed on Stafford and the conditions imposed on Dolan and
the Nollans. All were based on general authority taking into account
individual circumstances. Dolan's request for a variance was denied. The
Town was authorized to grant, and did grant, exceptions to the general
requirement that roads abutting subdivisions be improved to specified
standards. Stafford applied for an exception and was refused, but the
Town nevertheless considered whether an exception was appropriate.4~
Moreover, a number of other jurisdictions, like the United States District Court for the Eastern
District of Virginia, Washington, and Ohio, also apply Dolan to legislative exactions, but have
not explicitly decided the issue.47
The Hawaii appellate courts have not decided this issue, and indeed, in In re Water Use
Permlt Applications,48 the Supreme Court of Hawaii declined to address it, stating that "[w]e
need not address the additional question whether and to what degree Nollan and Dolan extend
beyond land dedications to include monetary exactions such as those presently at issue."49
as /d at 624.
td at 641 (footnotes omitted). The ordinances of the County of Hawaii which require affordable
housing requirements, do not provide for variances from such requirements. Thus, the applicability of the analysis
in Town afFdower Mound v. Stafford Estates Ltd. Partnership, 135 S.W.3d 620, 641 (Tex. 2004) (footnote omitted),
is questionable.
See Nat'l Assn of Home Burlders v. Chesterfield County, 907 F. Supp. 166, 168 (E. D. Va. 1995), afPd,
92 F.3d 1180 (4th Cir. 1996); Home Builders Assn v. City ofBeavercreek, 729 N.E.2d 349, 356 (Ohio 2000);
Trimen Dev. Co. v. Krng County, 877 P.2d 187, 194 (Wash. 1994) (en banc).
°8 94 Hawaii 97, 9 P.3d 409 (2000).
av Id at 184 n.102, 9 P.3d at 496 n.102 (citations omitted).
12
Accordingly, the applicability of Dolan to legislatively imposed impact fees remains undecided
in Hawaii.
B. A Review of Cases Dealing With Inclusionary Affordable Housing Programs
Among the cases that rejected a local government's attempt to require a mandatory set-
aside of dwelling units for affordable housing is Board of Supervisors v. DeGroff Enterprises.50
There, Fairfax County amended its zoning ordinance to require "the developer of fifty or more
dwelling units in several zoning districts to commit himself, before rezoning or site plan
approval to build at least 15% of these dwelling units as low and moderate income
housing...."5 ~ The trial court found that the amendment was invalid on the grounds that the
Board of Supervisors exceeded its authority under the State's zoning enabling act, the
amendment was an improper delegation of legislative authority, and the amendment was
arbitrary and capricious. On appeal, the Supreme Court of Virginia agreed with the trial court:
[T]he zoning enabling act does not authorize the governing body of a county to control
compensation for the use of lands or the improvements thereon ...The amendment .
exceeds the authority granted by the enabling act to the local governing body because it is
socio-economic zoning and attempts to control the compensation for the use of land and
the improvements thereon Of greater importance, however, is that the amendment
requires the developer or owner to rent or sell 15% of the dwelling units in the
development to persons of low or moderate income at rental or sale prices not fixed by a
free market ....s~
More recently, the Virginia Circuit Courtin Kansas-Lincoln, L.C. v. Arlington County
Board53 found that the County did not have the authority to include a requirement that a
so 198 S.E.2d 600 (Va. 1973).
51 /d, at 601.
sz Jd, at 602.
ss 66 Va. Cir. 274 (Va. Cir. Ct. 2004).
13
developer provide affordable housing as part of the land development process in the zoning and
land use regulation, nor the authority to require an affordable housing contribution as part of the
site plan approval process.54 Specifically, the court stated
[t]here is no authority for the County Board to require site plan applicants to make
affordable housing contributions to the County Housing Reserve Fund or provide
affordable housing units as part of the County's site plan approval process. Moreover, the
County is not authorized to require site plan applicants who seek to provide affordable
housing through the bonus density program to also make a contribution to the affordable
housing fund as that requirement is specifically prohibited by Va. Code § 15.2-2304.ss
The court found that the requirement was outside the legislative authority provided to Arlington
County by the Virginia General Assembly and was, therefore, illegal and invalid.
Cases upholding inclusionary housing programs are distinguishable. In Commercial
Builders of Northern California v. City of Sacramento, the Ninth Circuit held that a City of
Sacramento ordinance was constitutional under Nollan. The ordinance conditioned certain types
of nonresidential building permits upon the payment of a fee. The fee was intended to offset the
cost of affordable housing burdens caused by low-income workers who moved there for jobs.
The court found that it was not an unconstitutional taking.sb In analyzing the facts of the case
with the then four-year old Nollan test, the court stated:
W e ...agree with the City that Nollan does not stand for the proposition that an exaction
ordinance will be upheld only where it can be shown that the development is directly
responsible for the social ill question. Rather, Nollan holds that where there is no
evidence of a nexus between the development and the problem that the exaction seeks to
address, the exaction cannot be upheld. Where, as here, the Ordinance was implemented
only after a detailed study revealed a substantial connection between development and
!d. at 286.
ss Id.
ss !d at 873 (9th Cir. 1991).
14
the problem to be addressed, the Ordinance does not suffer from the infirmities that the
Supreme Court disapproved in Nollan.s~
The court was impressed with and convinced by the city-wide findings that explained non-
residential development would be a major factor in attracting new employees to the region and
that the introduction of these new residents necessitated affordable housing.ss
Similarly, in Holmdel Builders Assn v. Township of Holmdel, the court held that the fact
the Township utilized development fees rather than mandatory set-asides to accomplish the goal
of affordable housing did not negate a real and substantial relationship or nexus between the
linkage fees and the development.59 Although development fees were not site-specific in the
same sense as mandatory set-asides, they targeted land-related regulations because they were
specifically designed and applied to aid in the creation of affordable residential housing.h0
In Home BuildersAss'n of Northern California v. City ofNapa,b~ the city enacted an
inclusionary zoning ordinance requiring that 10 percent of all newly constructed units must be
affordable after the city made significant findings and studied possible affordable housing
solutions.bZ The ordinance offered developers two alternatives. First, developers of single-
family units could satisfy the inclusionary requirement through an "alternative equivalent
proposal" such as a dedication of land, or the construction of affordable units on another site.
s' !d. at 875.
ss !d. at 873.
e9 Holmdel, 583 A.2d at 288 (N.J. 1990).
60 !d at 288.
61 108 Cal. Rptr. 2d 60 (Ct. App. 2001).
b2 (d. at 62.
15
Developers of multifamily units could also satisfy the 10 percent requirement through an
"alternative equivalent proposal" if the city council determined that the proposed alternative
resulted in affordable housing opportunities equal to or greater than those created by the basic
inclusionary requirement.63 As a second alternative, a residential developer could choose to
satisfy the inclusionary requirement by paying an in-lieu fee. All fees generated through this
option were deposited into a housing trust fund, and could only be used to increase and improve
the supply of affordable housing in the City.b'
Developments that included affordable housing were entitled to a variety of benefits
including expedited processing, fee deferrals, loans or grants, and density bonuses that allow
more intensive development than otherwise would be allowed.bs In addition, the ordinance
permitted a developer to appeal for a reduction, adjustment, or waiver of obligations under the
ordinance "based upon the absence of any reasonable relationship or nexus between the impact
of the development and ...the inclusionary requirement.n66
Plaintiffs, anon-profit corporation and an association of builders, contractors, and related
trades and professions involved in residential construction, sought to have the inclusionary
zoning ordinance declared facially invalid because it: (1) was an impermissible taking under both
state and federal law; and (2) violated the Due Process Clause of the United States
vs !d.
ea Id.
as ld. at 62-63.
ea !d at 63.
16
Constitution.b~ On appeal, the California Court of Appeals upheld the ordinance against the
facial constitutional challenges.68 With respect to the takings claim, although acknowledging
that the ordinance imposed significant burdens on developers, the court found relevant that it
also provided benefits to those complying with its terms.69
However, this decision must be read in the context of California's statutory mandatory
bonus requirements.70 As recently amended and effective on January 1, 2005, the statute
requires requires a 20% density bonus as soon as a developer reaches a threshold of 5% of its
units affordable to very low income households or10% of its units are affordable to low income
households, and increases in density bonuses of 2.5% for each additional increase of 1 % of very
low income units, 1.5% for each additional 1% in low income units, and 1% for increase in
moderate income units, up to a maximum density bonus of 35% when a project provides either
1 I % very low income units, 20% low income units, or 40% moderate income units. I do not
understand the proposed Kauai Housing Policy Ordinance to provide such density bonuses in
any form.
Id.
ax /d. at 63-67.
a9 /d. at 64.
Cal. Gov. Code Section 65915-65918, as amended
17