LandlordsNewsletterA57-Fall2016, Page 3

LandlordsNewsletterA57-Fall2016, Page 3

PLF Scores an Important Property Rights Win at the California Supreme Court

By Brian T. Hodges


t’s no secret that California courts have been rather

adventurous in finding ways around the rule that

a permit condition must relate in both size and scope to development impact the condition is designed

to mitigate. The nexus and proportionality tests —

established by Nollan v. California Coastal Commission

(1987) and Dolan v. City of Tigard (1994) — are intended

to curtail the common municipal practice of using a permit

application as an opportunity to exact unrelated public benefits.

Over the years, however, California courts have bored gaping holes through that edifice. For example, courts have held that legislative demands for property — as opposed to demands made at the permit desk — are subject only to review to determine whether the dedication “reasonably relate[s] to the broad general welfare purposes for which the ordinance was enacted.” California Building Industry Ass’n v. City of San Jose (2015) . Thus, California courts have upheld legislation demanding, among other things, that developers dedicate a portion of new housing projects as affordable housing to be sold to government-selected purchasers

with absolutely no showing of nexus and proportionality.

Another court-created rule that carved a massive

hole into the Nollan/Dolan doctrine is the so-called

Porterville rule, which holds that the government does

not have to pay full and fair compensation for a taking

if it could have hypothetically demanded the targeted

property as a permit condition. The rule authorized the government to take land for pennies any time it could concoct a scenario where it could have demanded the land as a condition for approval of a hypothetical permit. In August, the California Supreme Court issued its long-awaited decision in City of Perris v. Stamper , in which PLF filed an amicus brief asking the Court to place common sense limits on the Porterville rule.

The facts of this case: Stamper owns an undeveloped 9-acre lot that is zoned for light industrial. The city, as part of a traffic plan update, determined that it needed a 1.66-acre strip of Stamper’s land to build a road. The city condemned the strip then

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