A City Ordinance, On Its Face, Cannot Be Challenged As An Unlawful Uncompensated Taking

In Action Apartment Association v. City of Santa Monica, (— Cal.Rptr. 3d —, 2008 WL 3971764, Cal.App. 2 Dist., Aug. 28, 2008), a California Court of Appeal considered whether a city ordinance requiring developers to build low-cost housing as a condition for approval of other projects, was unconstitutional because it constituted, on its face, an unlawful uncompensated taking. The court ruled only specific individual actions can be considered unlawful takings and that an ordinance on its face cannot. The city ordinance was therefore constitutional.


In 2006, the Santa Monica (“City”) City Council enacted ordinance 2191, which required developers to build a certain amount of affordable housing as a condition for having other proposed developments win City approval. Action Apartment Association (“AAA”), an association of owners of developed and undeveloped properties, filed suit to overturn the ordinance claiming it violated the United States and California constitutions because it amounted to an unlawful uncompensated taking.

The superior court dismissed the action and AAA appealed.


The question before it, the court said, was whether the ordinance on its face failed the “Nollan/Dolan” test, stemming from Nollan v. California Coastal Commission, (1987) 483 U.S. 825 and Dolan v. City of Tigard, (1994) 512 U.S. 374. The Nollan/Dolan test requires there be an “essential nexus” between the “legitimate state interest” the government asserts, and the taking; and that there must be a “rough proportionality” of burden so that individual landowners are not unfairly burdened in settling issues that interest the greater community. The court concluded it was impossible for an ordinance, on its face, to fail that test. “Both the United States and California Supreme Courts have explained that the two part Nollan/Dolan test applies only in the case of individualized adjudicative permit approval decisions; not to generally applicable legislative zoning decisions,” the court explained.

AAA’s argument that the language of Lingle v. Chevron U.S.A. Inc., (2005) 544 U.S. 528, expanded the Nollan/Dolan test to facial challenges was wrong, the court added. Lingle more specifically defined the type of government interest that could justify a taking. However, it “did not purport to hold the two pronged Nolan/Dollan test applied to a facial challenge such as that asserted by plaintiff,” the court said.

The dismissal of the challenge to the ordinance was affirmed.