Adams v. City of Seattle

Opinion

1 2

3 UNITED STATES DISTRICT COURT 4 WESTERN DISTRICT OF WASHINGTON AT SEATTLE 5 ANITA ADAMS, 6 Plaintiff, 7 C22-1767 TSZ v. 8 ORDER CITY OF SEATTLE, 9 Defendant. 10

THIS MATTER comes before the Court on cross-motions for summary judgment, 11 docket nos. 27 and 34. Having reviewed all papers1 filed in support of, and in opposition 12 to, the motions, and having concluded that oral argument would not be beneficial, the 13 Court enters the following Order. 14 Background 15 Plaintiff Anita Adams and her husband own a house located at 2437 South Judkins 16 Street in Seattle, Washington. See Adams Decl. at ¶¶ 4–6 (docket no. 35). The house is 17 approximately 2,600 square feet in size, id. at ¶ 6, and sits on a 4,600-square-foot plot of 18 19

20 1 In addition to the parties’ submissions, the Court received briefs, docket nos. 43, 47-1, and 21 55-1, from, respectively, the Lawyers’ Committee for Civil Rights Under Law, Pacific Legal Foundation, and Citizen Action Defense Fund, each acting as amicus curiae. These materials did 22 not, however, address the jurisdictional questions now before the Court. 1 land, see id. at Ex. 2 (docket no. 35-2 at 4). The property is zoned LR1 (M1), id., which 2 means that low-rise multifamily structures may be constructed on the site, for example,

3 rowhouses or townhouses,2 provided they comply with certain size, density, setback, and 4 other restrictions. See Seattle Municipal Code (“SMC”) Chapter 23.45. 5 As a result of the 2020 pandemic, plaintiff and her husband developed an interest 6 in building additional residences in the yard behind their house, with the purpose of 7 providing places for various family members, including adult children, to live. See 8 Adams Decl. at ¶¶ 10–18 (docket no. 35). Plaintiff identified an architect, Leah Martin

9 with the firm Allied8, who proposed to provide preliminary designs for between two and 10 four units, depending on configuration (i.e., townhouses either without or with ground- 11 floor apartments), that would add in the aggregate about 2,700 or 2,800 square feet of 12 living space. See Exs. 1 & 2 to Adams Decl. (docket nos. 35-1 & 35-2). Plaintiff and her 13 husband, however, never contracted with Martin to perform the work, and to date, the

14 project has not progressed past the conceptual phase. 15 Plaintiff alleges that she was hindered in her efforts by the City of Seattle’s 16 Mandatory Housing Affordability for Residential Development ordinance (the “MHA”), 17 codified as SMC Chapter 23.58C. The MHA was promulgated under authority granted to 18 the City of Seattle by the Washington Legislature in RCW 36.70A.540, which is part of

20 2 Rowhouses are attached side by side, face the street, and have no housing units behind them, 21 whereas townhouses may be located behind other townhouses on the same plot of land. See Seattle Department of Construction & Inspections, “Seattle’s Lowrise Multifamily Zones” 22 (https://www.seattle.gov/documents/departments/SDCI/codes/multifamilyzoningsummary.pdf). 1 Washington’s Growth Management Act (“GMA”). See SMC 23.58C.010. Pursuant to 2 the GMA, a city may “enact or expand affordable housing incentive programs providing

3 for the development of low-income housing units through development regulations or 4 conditions on rezoning or permit decisions.” RCW 36.70A.540(1)(a). The MHA 5 provides that, with respect to certain land use zones, including LR1 (M1), if an applicant 6 seeks a permit for construction of (i) a new structure, or (ii) an addition or alteration to an 7 existing structure that increases the total number of units on the property, the applicant 8 must comply with either the MHA’s “performance option” or the MHA’s “payment

9 option,” unless a modification is requested and approved. See SMC 23.58C.025 &.035. 10 The “performance option” entails developing within the structure for which a 11 permit is sought a certain number of units that will be rented or sold at below-market 12 rates to persons with lower than median incomes. See SMC 23.58C.050. The “payment 13 option” involves contributing cash to the City of Seattle, calculated as a specific amount

14 per square foot of the development, which will be deposited into a special account to be 15 used for purposes outlined in RCW 36.70A.540. See SMC 23.58C.040. Applicants may 16 seek modification of MHA requirements in the manner set forth in SMC 23.58C.035, 17 which authorizes the Director of the Seattle Department of Construction & Inspections 18 (“SDCI”) to reduce or waive the amount of performance or payment if an applicant “can

19 demonstrate facts supporting a determination of severe economic impact at such a level 20 that a property owner’s constitutional rights may be at risk.” SMC 23.58C.035(C)(1). 21 In this context, a “severe economic impact” exists if the MHA requirements will 22 either (a) deprive the property owner of “all economically beneficial use of the property,” 1 or (b) reach “the level of an undue burden that should not be borne by the property 2 owner.” SMC 23.58C.035(C)(3). The latter “undue burden” analysis involves weighing

3 the following nonexclusive factors: (a) the severity of the economic impact; (b) the 4 degree to which the MHA requirements were or could have been anticipated; (c) the 5 extent to which alternative uses of the property or different configurations of the 6 proposed development would alleviate the need for a waiver or reduction; (d) the extent 7 to which any economic impact was caused by the property owner’s decisions; and 8 (e) other factors relevant to whether the burden should be borne by the property owner.

9 SMC 23.58C.035(C)(4). 10 Plaintiff asserts that, although she could have paid the roughly $800,000 originally 11 estimated to design and construct new townhomes on her property, she could not have 12 also afforded either the expenses associated with the MHA’s “performance option” or the 13 cash contribution connected to the MHA’s “payment option.” Plaintiff, however, never

14 sought a modification or waiver pursuant to SMC 23.58C.035(C). In her declaration, 15 plaintiff explains that she failed to request such relief because she “learned that waiver 16 requests must be submitted alongside a completed permit application.” Adams Decl. at 17 ¶ 41 (docket no. 35). She does not indicate how she “learned” this information, but she 18 refers to an email from Katrina Nygaard, a Land Use Planner employed by the City of

19 Seattle, and she contends Nygaard indicated that she “could not seek a waiver before 20 submitting a permit application” and that she “wouldn’t obtain a waiver anyway.” Id. at 21 ¶ 46. Plaintiff has entirely misrepresented what Nygaard said in her communication to 22 plaintiff. 1 On August 9, 2022, in response to plaintiff’s inquiry from the previous day, 2 Nygaard wrote:

3 Thank you for your questions and contacting SDCI. You have done a lot of research into the requirements and process and, unfortunately, we can’t give 4 any assurance that your request to waive or modify the MHA requirements would be approved. These requests are rare and the burden of proof you’d 5 have to provide to meet the criteria can be difficult to meeting [sic]. The application review process is led by David VanSkike in our offices and so 6 he’d be the best person to contact if you have questions: david.vanskike@seattle.gov. 7 Ex. 3 to Adams Decl. (docket no. 35-3). Nygaard also suggested that plaintiff consider 8 building a detached accessory dwelling unit (“DADU”), which “would not trigger MHA 9 requirements,” and provided a link to the Seattle Municipal Code’s DADU provisions. 10 Id. Nowhere in her message did Nygaard tell plaintiff that she “could not seek a waiver 11 before submitting a permit application” or that she “wouldn’t obtain a waiver anyway.” 12 Rather, Nygaard provided to plaintiff the contact information for the person at SDCI who 13 could best answer her questions and assist her, namely David VanSkike. 14 Had plaintiff contacted VanSkike, who is the Policy Lead in SDCI’s Policy and 15 Technical Group, which has primary responsibility for implementing the MHA program, 16 plaintiff would have been told that she may seek a waiver or reduction of the MHA 17 performance or payment requirements in either of two ways: (i) within a master use 18 permit or construction permit application; or (ii) in a stand-alone “special exception” 19 application. VanSkike Decl. at ¶¶ 1, 3, & 7 (docket no. 30). In other words, VanSkike 20 would have informed plaintiff that she was not required to apply for a permit before or 21 contemporaneously with an MHA waiver request. Plaintiff did not, however, contact 22 1 VanSkike, see id. at ¶ 7, and she never asked for a waiver pursuant to SMC 23.58C.035, 2 which would have required only a description of the requested waiver, the identity of the

3 property owner and date of acquisition, a statement concerning the current use of the 4 property, documentation explaining and supporting the claim of economic impact, and an 5 explanation of why a different development configuration would not alleviate the need 6 for the waiver, see SMC 23.58C.035(C)(6). Plaintiff also never applied for a permit. 7 Instead, plaintiff filed suit. In this litigation, plaintiff presents both facial and 8 as-applied challenges to the MHA, alleging that the MHA effectuates an unconstitutional

9 uncompensated regulatory taking of private property. See Compl. at ¶¶ 14–16 & 118– 10 148 (docket no. 1). Plaintiff seeks declaratory and injunctive relief under 28 U.S.C. 11 §§ 2201–2202 and 42 U.S.C. § 1983. Defendant City of Seattle has moved for summary 12 judgment on grounds that (i) plaintiff’s facial attack lacks merit and is time barred, and 13 (ii) plaintiff’s as-applied claim is not ripe for judicial determination.3

14 Discussion 15 A. Facial Challenge 16 The Takings Clause of the Fifth Amendment, made applicable to the States and 17 their municipalities through the Fourteenth Amendment, does not entirely prohibit the 18 taking of private property, but rather imposes a condition on the exercise of such

19 governmental power, namely the provision of “just compensation.” See Lingle v. 20 21 3 This jurisdictional argument would have been more appropriately brought in a motion to dismiss pursuant to Federal Rule of Civil Procedure 12, and the Court would have preferred to 22 address it at an earlier stage of the case. 1 Chevron U.S.A. Inc., 544 U.S. 528, 536–37 (2005). The role of the Takings Clause is to 2 ensure that particular individuals are not forced to “alone . . . bear public burdens which,

3 in all fairness and justice, should be borne by the public as a whole.” Id. at 537. In 4 considering a challenge to a governmental action or regulation relating to private 5 property, the Court must first evaluate whether a taking has occurred. 6 A per se or categorical taking involves either “a permanent physical invasion” of 7 private property or a law or decision that deprives the owner of “all economically 8 beneficial us[e]” of the property. Id. at 538 (emphasis and alteration in original, quoting

9 Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1019 (1992)); see also 10 Garneau v. City of Seattle, 147 F.3d 802, 807 (9th Cir. 1998). Aside from per se or 11 categorical takings, determining whether the government has engaged in a taking requires 12 “an ad hoc, factual inquiry,” see Garneau, 147 F.3d at 807, which is governed by the 13 standards set forth in Penn Central Transportation Co. v. City of New York, 438 U.S. 104

14 (1978),4 or, with respect to land-use exactions, Nollan v. California Coastal Commission, 15 483 U.S. 825 (1987), and Dolan v. City of Tigard, 512 U.S. 374 (1994).5 See Lingle, 544 16 17 4 In Penn Central, the Supreme Court outlined several factors relevant to whether a “taking” has occurred, primarily “[t]he economic impact of the regulation on the claimant and, particularly, 18 the extent to which the regulation has interfered with distinct investment-backed expectations,” as well as the “character of the governmental action” (for example, a physical invasion or an 19 interference arising from “some public program adjusting the benefits and burdens of economic life to promote the common good”). 438 U.S. at 124. 20 5 “Read together, Nollan and Dolan establish a three-part test. First the court asks whether government imposition of the exaction would constitute a taking. Second is the ‘essential nexus’ 21 test, which asks whether the government has a legitimate purpose in demanding the exaction. Third is the ‘rough proportionality’ test, which asks whether the exaction demanded is roughly 22 proportional to the government’s legitimate interests.” Garneau, 147 F.3d at 809. 1 U.S. at 538; see also id. at 548 (indicating that “a plaintiff seeking to challenge a 2 government regulation as an uncompensated taking of private property may proceed . . .

3 by alleging a ‘physical’ taking, a Lucas-type ‘total regulatory taking,’ a Penn Central 4 taking, or a land-use exaction violating the standards set forth in Nollan and Dolan”). 5 Plaintiff alleges that the MHA accomplishes a per se physical taking, requiring 6 plaintiff to construct housing and rent it to tenants “she does not know or desire.” Pl.’s 7 Mot. at 12 (docket no. 34). As a facial challenge, this theory fails. To prevail on a facial 8 attack, plaintiff must show that the “mere enactment” of the MHA constitutes a taking.

9 See Garneau, 147 F.3d at 811 (citing Carson Harbor Vill. Ltd. v. City of Carson, 37 F.3d 10 468, 473–74 (9th Cir. 1994)). The “mere enactment” of the MHA did not give rise to a 11 physical taking for three reasons. First, the “performance option” on which plaintiff 12 premises her per se physical taking analysis applies only when an owner of property 13 within certain land-use zones seeks to construct a new structure (other than a DADU) or

14 alter an existing structure in a manner that increases the number of units on the property. 15 SMC 23.58C.025(B). In the absence of such development efforts, the MHA is essentially 16 dormant and has no effect on private property. Second, the MHA provides an alternative 17 to the “performance option,” and a property owner may elect the “payment option” and 18 thereby avoid any physical taking. Third, the MHA contains provisions for seeking a

19 waiver of the “performance option,” as well as the “payment option,” which render the 20 ordinance subject to discretion, and not automatic or self-effectuating. Indeed, as 21 indicated by SDCI Policy Lead VanSkike, the City has previously granted an application 22 for waiver or reduction, see VanSkike Decl. at ¶ 3 (docket no. 30), which undermines 1 plaintiff’s contention that the “mere enactment” of the ordinance constituted a taking. 2 Plaintiff’s claim of a per se physical taking is further belied by the language of the MHA

3 waiver provisions, which is consistent with takings jurisprudence, guiding the SDCI 4 Director to examine whether the MHA requirements deprive the property owner of all 5 economically beneficial use (the Lucas standard) or place an undue burden on the 6 property owner (an inquiry that harkens back to the underlying principles of the Takings 7 Clause). 8 Plaintiff further asserts that the MHA operates as a land-use exaction that, on its

9 face, violates the requirements of Nollan and Dolan. This argument ignores the waiver 10 provisions of the MHA, which allow the SDCI Director to examine the “essential nexus” 11 and “rough proportionality” of the MHA’s “performance option” or “payment option,” as 12 envisioned by Nollan and Dolan, before imposing them on a property owner who asserts 13 that such conditions of a permit would have a severe economic impact. The fact-specific

14 inquiry contemplated by Nollan and Dolan, as well as SMC 23.58C.035(C), does not 15 lend itself to a facial challenge, which is why the Ninth Circuit does not recognize facial 16 takings claims relating to land-use exactions. See Garneau, 147 F.3d at 811; Koontz 17 Coalition v. City of Seattle, No. C14-218, 2014 WL 5384434, at *4 & n.1 (W.D. Wash. 18 Oct. 20, 2014). Plaintiff’s facial attack on the MHA lacks merit, and City of Seattle’s

19 motion for summary judgment as to plaintiff’s facial takings claim is GRANTED.6 20

21 6 In light of this ruling, the Court does not address City of Seattle’s separate argument that 22 plaintiff’s facial challenge is time-barred. 1 B. As-Applied Challenge 2 In contrast to a facial attack, an as-applied challenge “involves a claim that the

3 particular impact of a government action on a specific piece of property requires the 4 payment of just compensation.” Garneau, 147 F.3d at 811 (quoting Carson Harbor Vill., 5 37 F.3d at 474). City of Seattle contends that plaintiff has not presented a justiciable 6 as-applied takings claim. For purposes of Article III justiciability, an actual controversy 7 exists when the dispute is (i) “definite and concrete, touching the legal relations of parties 8 having adverse legal interests,” and (ii) “real and substantial,” seeking “specific relief

9 through a decree of conclusive character, as distinguished from an opinion advising what 10 the law would be upon a hypothetical state of facts.” See MedImmune, Inc. v. Genentech, 11 Inc., 549 U.S. 118, 127 (2007) (quoting Aetna Life Ins. Co. of Hartford, Conn. v. 12 Haworth, 300 U.S. 227, 240–41 (1937)); see also Koontz Coalition, 2014 WL 5384434, 13 at *3. Plaintiff’s as-applied attack on the MHA does not satisfy this standard.

14 In the context of an alleged regulatory taking, the Court must refrain from 15 “consider[ing] the claim before the government has reached a ‘final’ decision.” See 16 Pakdel v. City & County of San Francisco, 594 U.S. 474, 475 (2021). Although the 17 Pakdel Court clarified that the exhaustion of state remedies is not a prerequisite to an 18 action under 42 U.S.C. § 1983, id., it reiterated that, for a claim to be ripe, the

19 government must have at least “committed to a position” and thereby caused an actual 20 injury to the plaintiff, id. at 479. For example, in Pakdel, the City of San Francisco 21 refused the petitioners’ request to be excused from a lifetime lease requirement associated 22 with the conversion of a multiunit residential building into condominiums. Id. at 475–76. 1 No question existed about the City of San Francisco’s position, id. at 478 (“‘execute the 2 lifetime lease’ or face an ‘enforcement action’”), and the regulatory takings claim in

3 Pakdel satisfied the “relatively modest” requirement of finality to be considered ripe, id. 4 No similar indicia of ripeness exists in this matter. No waiver request has been 5 made, and no decision has been issued by the City of Seattle concerning whether plaintiff 6 would be subject to the MHA’s “performance option” or “payment option.” No permit 7 has been sought and no condition or exaction has been imposed. Plaintiff’s theory that 8 she should not have to risk paying an architect and the expenses of seeking a permit when

9 she does not know if SDCI would grant her a waiver is premised on a misperception of 10 the advice given by Land Use Planner Nygaard and an apparent failure to read and/or 11 comprehend the challenged ordinance. This case does not yet concern “the particular 12 impact of a government action on a specific piece of property,” Garneau, 147 F.3d at 13 811, and plaintiff’s as-applied challenge must be dismissed as prematurely filed. See

14 Koontz Coalition, 2014 WL 5384434, at *5 (holding that as-applied claims premised on 15 “uncertain or contingent future events” that might not occur as anticipated or even at all 16 were “unfit for judicial determination”). 17 Conclusion 18 For the foregoing reasons, the Court ORDERS:

19 (1) Defendant City of Seattle’s motion for summary judgment and to exclude 20 plaintiff’s experts’ opinions, docket no. 27, is GRANTED in part and STRICKEN in part 21 as moot. The Court concludes, as a matter of law, that plaintiff’s facial challenge to the 22 Mandatory Housing Affordability for Residential Development ordinance, codified as 1 SMC Chapter 23.58C, lacks merit, and judgment shall be entered in favor of City of 2 Seattle and against plaintiff Anita Adams on such claim. Plaintiff’s as-applied challenge

3 to the ordinance is DISMISSED without prejudice as unripe and not yet a justiciable case 4 or controversy. The portion of the City of Seattle’s motion seeking to exclude plaintiff’s 5 experts’ opinions is STRICKEN as moot. 6 (2) Plaintiff’s cross-motion for summary judgment, docket no. 34, is DENIED. 7 (3) The Clerk is directed to enter judgment consistent with this Order, to send a 8 copy of this Order and the Judgment to all counsel of record, and to CLOSE this case.

9 IT IS SO ORDERED. 10 Dated this 28th day of June, 2024. 11 A 12 Thomas S. Zilly 13 United States District Judge 14 15 16 17 18 19 20 21 22