PLF, BIA Bay Area sue Oakland for forcing builders to fund art works

Oakland, CA; July 23, 2015: The City of Oakland is violating constitutional protections for property rights and free speech — and unjustly raising costs for home buyers and businesses — by forcing builders of homes and commercial projects to fund art works that have no reasonable connection to any public needs created by their building projects.

So argues a lawsuit filed today by Pacific Legal Foundation (PLF), on behalf of the Building Industry Association of the Bay Area (BIA Bay Area).  Donor-supported PLF, the leading watchdog organization that litigates for limited government and property rights, represents BIA Bay Area free of charge, as with all PLF clients.

New law says:  Pay for art — or you can’t build in Oakland

The federal lawsuit targets the Oakland Public Arts Requirements Ordinance (Oakland Municipal Code Section 15.70.010), which was adopted on December 9, 2014, and took effect February 8, 2015.  As a condition for a construction permit, the law orders builders either to install public art works in their projects, or pay the city an in-lieu fee for public art works on public property.

The public art work or fee adds .5 percent to the costs of a residential project, and one percent to the costs of a commercial project.  When the developer elects to install public art, it must be “publicly accessible,” meaning that the public must be allowed on the project’s private property; only artists on a city-“verified” list may be used.

Builders may meet a portion of the obligation by providing space in the project for an art gallery or arts and cultural programming, open to the public for free.

Abridging property rights and free-speech rights

As the lawsuit argues, Oakland’s public art funding mandate violates both the Fifth Amendment’s ban on uncompensated takings and the First Amendment’s prohibition against compulsory speech.

The Fifth Amendment prohibits unrelated demands for property or money as the price of a building permit.  Oakland’s art mandate violates this rule by forcing owners to underwrite a public benefit — public art works — with no reasonable connection to any impact from their projects.

The First Amendment’s free-speech guarantees include the right not to give voice to someone else’s message — including the government’s.  Oakland’s art mandate violates this rule by compelling builders to engage in expressive activity by installing or paying for government-mandated public art works by government-designated artists.

Statement by PLF’s Tony Francois: a “broad brush” violation of rights that raises costs and deters homebuilding

“Commissioning more public art might be a laudable goal, but the responsibility to fund it should rest with city government and taxpayers as a whole, not with builders and the home buyers and renters who will have to pay more,” said PLF Senior Staff Attorney Tony Francois.  “Oakland is committing a broad-brush violation of the Constitution by treating builders, as well as home purchasers and renters, as ATMs to fund the city council’s wish list for public art projects.

“The construction of new housing and commercial projects doesn’t create a new aesthetic need that justifies a public art funding mandate,” Francois noted.  “To the contrary, the design review process and state environmental laws already ensure that new construction will meet reasonable aesthetic standards.  The public art-funding mandate is just a scheme to grab money from a convenient source — local builders — for a program the politicians favor.  The Fifth Amendment forbids this kind of abuse of the land use permit process.

“Hitting up builders with unjustified costs also harms the public interest in general,” Francois continued.  “Oakland’s public art-funding mandate adds tens of thousands of dollars or more to the cost of building homes, and to other kinds of building projects.

“The art-funding mandate is yet another government deterrent to the creation of more housing in Oakland,” said Francois.  “Already, there are thousands of homebuilding projects that have been approved in Oakland, but not acted upon, because high construction costs make them unaffordable.  As a recent report by the state Legislative Analyst documented, high construction costs are driven in significant part by expensive government mandates and regulations on homebuilders.

“BIA Bay Area turned to litigation reluctantly, only as a last option,” Francois continued.  “But the city is determined to push ahead with costly mandates that drive up home prices, so it has become necessary to fight back in court, for constitutional rights and economic common sense.  PLF has won some of the key U.S. Supreme Court precedents that affirm these rights, and PLF is proud to be championing them in this important litigation.”

Statement by Bob Glover of BIA Bay Area:
Time to get serious about increasing housing opportunities

“This lawsuit raises issues that go far beyond the City of Oakland,” said Bob Glover, Executive Officer of BIA Bay Area.  “We as a region need to decide if we are serious about increasing housing opportunities in the Bay Area for working households in a responsible and sustainable way.  We cannot do that if local governments continue to pile the cost of providing every conceivable social program on new housing development.  It is simply irresponsible to bemoan the lack of new housing affordable to working households while refusing to make the tough decision to say ‘no’ to increasing the cost of new housing.”

About BIA Bay Area
Building Industry Association of the Bay Area is a nonprofit corporation comprised of hundreds of home builders, developers, property owners, contractors, subcontractors, building trades, suppliers, engineers, and design professionals in the business of providing housing throughout the Bay Area.  Its mission includes advocacy in support of housing opportunities for home buyers and renters, and legal representation of the interests of its members and the community.

About Pacific Legal Foundation
Donor-supported PLF is a watchdog organization that litigates for limited government, property rights, and free enterprise nationwide.  PLF represents all clients without charge.