Posted by: Patricia Salkin | September 30, 2011

RI Supreme Court Holds Towns May Not Charge Fee-in-Lieu of Affordable Housing Absent State Statutory Authorization

After North End filed a pre-application for the development of a five-lot subdivision, the Town Council enacted three new ordinances to promote affordable housing in the town.  The ordinances included a requirement that developers either designate 15% of the units in any subdivision or major residential land development as affordable housing or pay a $200,000 fee-in-lieu of constructing the required units.  Since North End indicated it did not intend that any of the 5 units would be affordable housing, the township imposed a $200,000 fee-in-lieu before North End would be allowed to record any subdivision approval and before they could begin to develop the property.  North End filed a lawsuit seeking to enjoin the town from mandating the fee alleging that such fee violated substantive due process, constituted a regulatory takings, was an unconstitutional tax, and that it violated its equal protection.  North End also contended that the town had imposed the tax/fee without explicit authority from the General Assembly.  The Superior Court ruled in favor of the Town and North End appealed to the Supreme Court.

The Rhode Island Supreme Court held that since neither the Low and Moderate Income Housing Act not the Rhode Island Comprehensive Planning and Land Use Act expressly or by implication authorizes a town to require a developer of residential properties to pay a fee-in-lieu of undertaking the construction of affordable housing, the town could not use their home rule authority to make such requirement in the absence of express enabling authority from the State General Assembly since the development of affordable housing has been identified as a critical statewide need.  The Court also distinguished this fee from impact fees, which are permitted in Rhode Island, since impact fees are statutorily authorized for the specific purpose of ensuring adequate public infrastructure, not affordable housing, and the statute sets forth specific procedures for the imposition, collection and expenditure of these fees.  Further the court examined existing statutory authority for open space fees, which also contains a fee-in-lieu provision, and concluded that since the General Assembly authorized both impact fees and open space fees, they would likewise have to authorize the affordable housing fee.

North End Realty, LLC v Mattos, 25 A.3d 527 (RI 7/8/2011)

The opinion can be accessed at: http://www.courts.ri.gov/Courts/SupremeCourt/OpinionsOrders/opinions/09-93.pdf


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