California Court of Appeals, First District, Third Division
[As modified Feb. 26, 2015.]
Alameda County Superior Court No. RG13672597 Honorable Ioana Petrou Judge.
Baird Holm and David C. Levy for Plaintiff and Respondent.
Berkeley City Attorney's Office, Zach Cowan, City Attorney, and Laura McKinney, Deputy City Attorney, for Defendant and Appellant.
Pollak, Acting P. J.
Defendant 1080 Delaware, LLC (1080 Delaware), the owner of a mixed-use residential rental project in Berkeley, appeals from a judgment compelling it to comply with a condition in the use permit for the project requiring compliance with the inclusionary housing ordinance of the City of Berkeley (City). Defendant contends the City may not enforce the condition, included in the use permit obtained by former owners of the property, because the ordinance has subsequently been held to have been preempted by the Costa-Hawkins Rental Housing Act (Civ. Code, § 1954.50 et seq.; the Costa-Hawkins Act). Although the City does not dispute that its ordinance has now been preempted by the Costa-Hawkins Act, we agree with the City that it may nonetheless enforce the condition of the use permit, the validity of which was not challenged in the many years since the permit was issued. We shall therefore affirm the judgment.
In July 2004, the City issued to Said Adeli-Nadjafi (Adeli) a use permit for the construction of a mixed-use building which currently has the address of 1080 Delaware Street, consisting of 51 residential rental units and ground floor commercial space. Condition 10 of the use permit provides as follows: “Before submission for building permit, the applicant shall submit floor plans and schedules, acceptable to the Zoning Officer, showing the location of each inclusionary unit and sales or rental prices. Said plans and schedules must adequately demonstrate that the unit types are reasonably dispersed throughout the project, are of the same size and contain, on average, the same number of bedrooms as the market-rate units and that the unit rent or sales price complies with Chapter 23C.12 of the Zoning Ordinance.”
Chapter 23C.12 of the Berkeley Municipal Code (Chapter 23C.12), first adopted in 1986, sets forth what is referred to as the “Inclusionary Housing Ordinance.” Chapter 23C.12 was designed to comply with Government Code section 65580 et seq. requiring a general plan to contain a housing element stating how the local agency will accommodate its share of the regional need for affordable housing. The ordinance requires that 20 percent of all newly constructed residential units be reserved for households with below-median incomes and rented at prices that are, under a prescribed formula, below market prices and affordable to such households. (Ch. 23C.12, § 23C.12.030. subd. A.) In Palmer/Sixth Street Properties, L.P. v. City of Los Angeles (2009)
175 Cal.App.4th 1396, 1405-1406 [96 Cal.Rptr.3d 875] (Palmer), the court held that a comparable ordinance adopted by the City of Los Angeles was preempted by the Costa-Hawkins Act, which was enacted in August 1995 and provides, generally, that residential landlords may “establish the initial rental rate for a dwelling or unit” (Civ. Code, § 1954.53, subd. (a)). The City acknowledges that under this decision, it is now ...