March 6, 2012

20 years of Pacific Northwest victories: fighting Seattle’s housing preservation laws

By Brian T. Hodges Senior Attorney

In one of our earliest efforts in the Pacific Northwest, PLF participated in several cases challenging the constitutionality of a Seattle ordinance that severely restricted the use of low income rental properties.

The Larned Hotel, the property at issue in Sintra v. City of Seattle. Photo by Joe Mabel, per creative commons license
Throughout the 1980s, the City of Seattle, faced with a booming redevelopment market, adopted a series of ordinances that were intended to stop landowners from converting low income properties to other uses.  Each attempt was invalidated.  But the city was undaunted and in 1987 enacted its Housing Preservation Ordinance (HPO), which required all owners of property currently being used for low income housing to obtain a license to demolish or change the use of the property.  Such licenses, however, would only be granted if the property owner agreed to replace a specified percentage of low income housing or paid into a “housing replacement fund.”

 

Two regulatory takings challenges followed.  The first case, Robinson v. City of Seattle, argued that the ordinance effected a regulatory taking on its face.  The second case, Sintra, Inc. v. City of Seattle, argued that the City had applied the ordinance to utterly stymie the owners’ plan to renovate a vacant and shabby downtown hotel effecting a regulatory taking.  PLF filed amicus briefs in support of both cases.

These cases, which were decided the same year PLF opened its office in the Pacific Northwest, set very important precedent in Washington’s regulatory takings law.  In Robinson, the Washington Supreme Court recognized that, although the goal of preserving low income housing was a legitimate government objective, the HPO required property owners to provide an affirmative benefit to the public, and thus was subject to an ad hoc regulatory takings analysis:

We have on an earlier occasion stated that the burden of providing a public benefit was one best borne by the community rather than by individuals:

[T]he city may not constitutionally pass on the social costs of development of the downtown Seattle area to current owners of low income housing.  The problem must be shared by the entire city, and those who plan to develop their property from low income housing to other uses cannot be penalized by being required to provide more housing.

The Court rejected the takings challenge because property owners could not satisfy multi-factor takings analysis in the context of a “facial” claim, but then invalidated the ordinance as imposing unduly oppressive restrictions in violation of substantive due process.

In Sintra, the Supreme Court analyzed the HPO under the multi-factorial regulatory takings test, ultimately concluding that a taking had occurred because of the appropriative character of the regulation.  The Court explained that the ordinance amounted to a cost-shifting device under the guise of a regulation, which amounts to an appropriation of private property.

Together, these cases stand for the very important and fundamental principle that the government cannot achieve a legitimate, even laudable, government objective by steam rolling the rights of property owners.

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