Posted by: Patricia Salkin | July 16, 2008

Controversial Maui Workforce Housing Law Continues to Wind Through the Courts – District Court Sends Case to State Court on Compensation Issue

In 2006, over the Mayor’s objection, the Maui County Council adopted a Residential Workforce Housing Policy  that in essence, requires developers seeking to build five or more residential units on their land to enter into a “Residential Workforce Housing Agreement” with the County before final subdivision approval or building permits are issued. The law requires, among other things, that when 50% or more of the units and/or lots in the proposed development are offered for sale at $600,000 or more, 50% of the total number of units and/or lots must be sold or rented to residents within the income-qualified groups (families with incomes between 100% and 160% of the County’s median family income). In lieu of providing the units or lots, the requirement may be satisfied by either: 1) paying a fee at the rate of 30% of the total project sales; 2) donating unimproved land valued at 200% of the in-lieu fee; or 3) donating improved land valued at 100% of the in-lieu fee.  The ordinance further provides that a developer may appeal to the Council for a reduction, adjustment or waiver of the requirements, and that the developer bears the burden of proving the absence of any reasonable relationship or nexus between the impact of the development and the number of residential workforce housing units required.

 

The Plaintiffs and their partners are owners of two vacant parcels on which they plan to develop multi-family residential projects.  In furtherance of this, the Court noted that they have spend hundreds of thousands of dollars on architectural, planning and other professional fees and expenses. They applied for permit for the first project in May of 2006, prior to the adoption of the ordinance in December 2006.  In August 2007, the Council rejected the Plaintiff’s request for a waiver, leading the filing of a five count complaint alleging that: 1) the ordinance violates their constitutional rights under 42 U.S.C. §1983; 2) on its face, the ordinance is an impermissible taking; 3) on its face, the ordinance violates the Plaintiff’s substantive due process and equal protection; 4) the ordinance violates the state constitution; and 5) the exaction is illegal as it is not authorized by state statute. The plaintiffs asked that the County be enjoined from enforcing the ordinance.

 

The current found that the Plaintiff’s motion for partial summary judgment was a facial takings claim and that “the application of the Nollan/Dolan standard to such a challenge is presently not contemplated by Ninth Circuit or Supreme Court case law” since here there is no proposed physical invasion of the land, which would be required for a facial takings claim.  In their decision, the Court provides a good review the law of regulatory takings from Pennsylvania Coal through Lingle, as well as the tests for determining whether land use exactions are unconstitutional. 

 

The Court summarized its determinations on Plaintiff’s motion that: 1) the Plaintiff’s motion is a facial takings claim; 2) Williamson County ripeness requirements apply to facial takings claims; 3) the 9th Circuit has recognized the “substantially advances” test as the only means of mounting a facial takings challenge free from Williamson County’s state compensation requirement; 4) the U.S. Supreme Court abrogated the “substantially advances” as a takings test in Lingle; 5) Nollan/Dolan does not apply outside of the facial takings claim; and 6) since Plaintiffs raise a facial claim, they must first seek compensation in State court.  

 

As to the County’s motion for summary judgment, the Court concluded: 1) although the claims are not yet ripe, they could be developed in state court so the claim is dismissed without prejudice; 2) as to Plaintiff’s equal protection claim premised on unique treatment, the County’s motion to dismiss is denied; 3) with respect to the due process claim, the Court noted that there remain serious concerns about the constitutional viability of the Ordinance; 4) the County presented insufficient evidence to support a finding for dismissal under the State constitution; and 5) the County’s request to dismiss the claims against individual County officials was granted.   

 

Kamole Pointe Development LP v. Hokama, 2008 WL 2622819 (D. Hawai’i).

 

The opinion can be accessed at:  http://www.inversecondemnation.com/files/kamaole_order_denying_sj_7_3_2008.pdf

 

For other posts on this case with good links to related source material, visit Hawaii Land Use Law at: http://hilanduse.blogspot.com/2008/07/significant-rulings-in-federal-district.html and Inverse Condemnation at: http://www.inversecondemnation.com/inversecondemnation/2008/07/nollandolan-challenge-to-mauis-50-housing-exaction-is-a-takings-claim-subject-to-williamson-county.html

 


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