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The Real Deal Los Angeles

Supreme Court refuses to hear WeHo developers’ case against affordable housing subsidies

Developers were forced to pay a $540,000 fee for an 11-unit condo permit
October 31, 2017 04:00PM

US Supreme Court (Credit: Wikimedia Commons)

The Supreme Court said Monday it will not be hearing an appeal from West Hollywood developers fighting a California law that requires developers to subsidize affordable housing, the Los Angeles Times reported.

Jonathan and Shelah Lehrer-Graiwer were required to pay a fee of $540,000 to subsidize affordable housing elsewhere as part of their permit process for an 11-unit condo project at 616 N. Croft Avenue. The developers paid the fee but later sued in December 2012.

According to the inclusionary housing ordinance, developers are required to build and set aside a number of units for affordable housing or pay a fee set by a formula as a condition for receiving a permit.

The developers argued that the fees violate the Constitution’s prohibition of using private property “for public use without just compensation.” They also argued that permit restrictions must be related to the impact of a new development.

A state appeals court rejected the challenge – stating that the ordinance qualifies as a “land use regulation” because it does not “deprive a property owner of all viable economic use of the property.” The California courts said the fees are not an “exaction” of property, but rather a reasonable regulation of development.

Pacific Legal Foundation lawyers then appealed this decision in hopes the high court will enforce limits “on a government’s authority to use the permit process to force private property to dedicate private property to a public use.” [LAT] – Natalie Hoberman