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Posts categorized "▪ Vacation rentals"
Federal Court Denies TRO: Hawaii Gov's Coronavirus Travel Quarantine Doesn't Stop Anyone From Coming To Hawaii
As expected, a quick decision and opinion from the U.S. District Court for the District of Hawaii, after yesterday's hearing on the plaintiff's request for extraordinary preliminary relief (a TRO and PI) in the case challenging the Hawaii Governor's imposition of a 14-day self-quarantine on all travelers inbound to Hawaii (and other emergency orders, although the TRO request was limited to the quarantine).
When the opinion starts this way, you know which way it is headed:
Claiming that there is no emergency in Hawai'i or the United States, Plaintiffs seek temporary injunctive relief enjoining Defendant from enforcing the 14-day quarantine requirements of the Emergency Proclamations and an order to show cause why a preliminary injunction should not issue.
Op. at 1-2 (footnote omitted). I'm not sure that's exactly what the plaintiffs were arguing ("no emergency" anywhere), but you get the drift.
The Governor challenged the plaintiffs' standing (they have not been injured, he claims), but the court avoided ruling on that question after concluding that the Governor's quarantine does not actually prohibit anyone from coming to Hawaii. It's not a ban on travel, just a (very onerous) condition placed on travel. The plaintiffs, the court concluded, "elected not to travel—whether to or from Hawai'i—because they do not want to be quarantined." Slip op. at 11. This isn't an express ban (feel free to come to Hawaii, as long as you are prepared to stay indoors in a single location for the next two weeks), nor is it pretextual (see slip op. at 21-22).
The court's reasoning was based mostly on Jacobson (the 1905 Massachusetts vaccination case from the U.S. Supreme Court -- what we call the "real liberty" case). Applying rational basis review, the Hawaii court concluded that the plaintiffs have little chance of success on the merits, because the governor's actions "bear a real or substantial relation to the public health." Slip op. at 17.
It doesn't take much for a government act to pass the rational basis test, and there was more than enough in the record for the court to conclude that the governor's actions are in the ballpark. (We have to express a little disappointment that the court didn't throw in a cite or footnote to The King v Tong Lee, 4 Haw. 335 (Kingdom 1880) (in banco), a case that although not binding on this court, certainly supported its conclusion; and it's always fun to cite Kingdom cases).
One thing we didn't care for was this citation to a recent Fifth Circuit case:
Indeed, "Jacobson instructs that all constitutional rights may be reasonably restricted to combat a public health emergency." In re Abbott, 954 F.3d 772, 786 (5th Cir. 2020).
Slip op. at 14. That to us, is not quite accurate. Indeed, as the Supreme Court has noted, "[e]mergency does not create power. Emergency does not increase granted power or remove or diminish the restrictions imposed upon the power granted or reserved." Home Building & Loan Assoc. v. Blaisdell, 290 U.S. 398 (1934). We think it is more accurate to say that even in non-emergency times, our rights are subject to reasonable regulation without substantial judicial interference (that's the nature of the rational basis test, no?).
The right to travel plaintiffs assert is a liberty interest under the Fifth and Fourteenth Amendments (not a Privileges and Immunities Clause right to travel claim, which the federal government tried unsuccessfully to raise). The court concluded this wasn't a "ban" on travel, just something that makes travel a really big hassle. It does have a "deterrent effect," but "any deterrent effect the quarantine may have on Plaintiffs' travel to Hawai'i does not amount to a violation of their right to travel. We are not here dealing with a quarantine or Emergency Proclamations with a purpose of deterring Plaintiffs (or other out-of-state travelers) from entering Hawai'i." Slip op. at 22. In other words, the court isn't going to look behind the expressed purpose of the quarantine, and examine the motives of the governor. And the restrictions don't discriminate in favor of Hawaii residents because they have to go through most of the same things (although, as we understand it, residents are subject to slightly less restrictions than nonresidents when it comes to what activities they may engage in while in quarantine).
The court also held that even if the quarantine were subject to a higher level of scrutiny, it survives:
Accordingly, based on the record presently before it, the Court finds that the quarantine survives strict scrutiny and Plaintiffs cannot at this time establish a likelihood of success or raise a serious question going to the merits of their right to travel claim.
To us, that is a big hint about where the court is headed on this issue eventually, unless there's some kind of revelatory evidence produced.
We listened in to the hearing yesterday, and thought that the issues were well argued by excellent counsel on both sides, and the judge was well-prepared also. But we can't say that this ruling was unexpected.
We're not sure what's next (probably some kind of action on the non-quarantine measures, some move to supplement the evidentiary record, or maybe an amendment to the complaint to allege a P&I right to travel violation, we're guessing), but we shall continue to follow along. This now seems to be a race against time, as the governor has announced that at the end of July, the quarantine is getting modified to allow those travelers who go through a COVID "precheck" and who can show that they are virus-free, to travel inbound without going through the two-week stay inside restriction.
Several items, in the event this case or these issues float your boat:
July 22, 2020: we are moderating a superstar panel of lawprofs and practitioners (including the counsel for the plaintiffs in the Hawaii case, Harmeet Dhillon), for an ABA sponsored program, "Emergency and Police Power: Property Claims in Times of Crisis." Also speaking are Professors Craig Konnoth (Colorado) and John Nolon (Pace), and Professor Sarah Adams-Schoen (Oregon).
For more on the powers of Hawaii's governor during emergencies, see our forthcoming article in the U. Hawaii Law Review, "Hoist the Yellow Flag and Spam® Up: The Separation of Powers Limitation on Hawaii's Emergency Authority," 43 U. Haw. L. Rev. ___ (forthcoming 2020).
We were a guest on the Eminent Domain Podcast on the takings aspects of these shut down orders (not an issue in the Hawaii case, as the plaintiffs have not raised a takings claim).
If you want a deeper dive into the takings issues, download our draft article, "Evaluating Emergency Takings: Flattening The Economic Curve."
Lots going on, even on this holiday weekend.
Order Denying Plaintiffs' Application for Temp. Restraining Order, Carmichael v. Ige, No. 1:20-cv-00273-JAO...
Posted on July 3, 2020 in ▪ Coronavirus, ▪ 42 U.S.C. § 1983 | Civil Rights, ▪ Due process, ▪ Municipal & Local Govt law, ▪ Vacation rentals | Permalink | 0 Comments
July 22, 2020: "Emergency and Police Power: Property Claims in Times of Crisis" (ABA Webinar)
Please plan on joining us on Wednesday, July 22, 2020, at 1pm ET (10am PT) for a long-form program on "Emergency and Police Power: Property Claims in Times of Crisis."
Our speakers are Professors Craig Konnoth (Colorado) and John Nolon (Pace), and one of the lawyers on the forefront of the nationwide legal challenges, Harmeet Dhillon (San Francisco). I'll be moderating, along with Professor Sarah Adams-Schoen (Oregon).
Here's the program description:
On the eve of the centennial of Pennsylvania Coal Co. v. Mahon (US 1922), this panel will revisit the question: How far can the police power be stretched to protect the public against dangers? The panel will evaluate the scope of state and local authority to respond to emergencies and the implications for private property rights—asking, how far is too far? What is the scope of implied limitations on private property rights in times of crisis? When does the diminution of existing property rights require compensation? Can local governments respond to a crisis without delegated authority or in defiance of state mandates? What rights do property owners/landlords/tenants have to privately respond in times of crisis.
The panel will delve into the timely and enduring question of how far the police power stretches to protect the public against dangers—asking, how far is too far? Can local governments respond to a crisis without delegated authority or in defiance of state mandates? What rights do people have to privately respond in times of crisis?
Register here. We hope you can join us.
Posted on July 1, 2020 in ▪ Coronavirus, ▪ 42 U.S.C. § 1983 | Civil Rights, ▪ Due process, ▪ Inverse condemnation, ▪ Municipal & Local Govt law, ▪ Property rights, ▪ Regulatory takings, ▪ Rent Control, ▪ RLUIPA | religious land use, ▪ Seminars, ▪ Vacation rentals, ▪ Zoning & Planning | Permalink | 0 Comments
Available Now: 2020 Zoning and Planning Law Handbook (Green Book)
photo: Patricia Salkin
Just published: the 2020 Zoning and Planning Law Handbook (Green Book). The first section of the Summary of Contents is about Takings, and includes as the lead piece Professor Gideon Kanner and Michael Berger's tour-de-force article, "The Nasty, Brutish, and Short Life of Agins v. City of Tiburon." It also includes my articles on Murr, "Restatement (SCOTUS) of Property: What Happened to Use in Murr v. Wisconsin?"
Check it out. The Green Book is a one-stop shop for the best articles on land use in a given year, and this edition includes chapters on housing, agriculture, cell tower placement, RLUIPA, and (of course) zoning.
Our thanks to Dean Patty Salkin who edited the volume for including us.
Summary of Contents, 2020 Zoning and Planing Law Handbook (Green Book)
Posted on June 17, 2020 in ▪ 42 U.S.C. § 1983 | Civil Rights, ▪ Articles and publications, ▪ Due process, ▪ Eminent Domain | Condemnation, ▪ Environmental law, ▪ Inverse condemnation, ▪ Land use law, ▪ Municipal & Local Govt law, ▪ Redevelopment, ▪ Regulatory takings, ▪ Rent Control, ▪ RLUIPA | religious land use, ▪ Vacation rentals, ▪ Williamson County | Ripeness, ▪ Zoning & Planning | Permalink | 0 Comments
Upcoming Judiciary History Center Program: "Constitutional Law and States of Emergency: Lessons from the COVID-19 Pandemic" - Wed., June 17, 2020, 5:30pm HST
Next Wednesday, June 17, 2020, at 5:30pm Hawaii Time, we'll be speaking for the King Kamehameha V Judiciary History Center about "Constitutional Law and States of Emergency: Lessons from the COVID-19 Pandemic."
This is a one-hour program, open to the public, where we will take a dive into Hawaii's emergency preparedness and response laws, how Hawaii's courts have treated emergencies, plagues, pandemics, and quarantines in the past (we have a long history there), and respond to (moderated) audience questions.
Space limited to 100 attendees, although it will be recorded and posted on the Center's YouTube channel. Here's the program description:
The King Kamehameha V Judiciary History Center invites you to join our live webinar with attorney Robert H. Thomas as he shares his expertise about constitutional rights and civil liberties during the COVID-19 pandemic. He will share lessons from Hawaiʻi's history of public health laws during epidemics, as well as explain how courts in other jurisdictions are currently evaluating legal claims related to the Fifth Amendment.
The webinar will conclude with a live Q&A. Space is limited to 100 webinar attendees.
Register to learn about Robert's responses to popular questions that arose during quarantine, including:
Can government officials require me to wear a mask?
Can the police keep me from going to the beach?
Can Hawaiʻi treat residents and tourists differently?
To join the live webinar, please register using the sign-up button below. Or, visit our Youtube channel to view the program's live stream feed on June 17, 2020 at 5:30 pm. The webinar will be recorded and posted to our Youtube and Facebook pages.
Hope you can join us.
PS - once the ongoing situation is over, when you have a chance, you really should pay an in-person visit to the Center's facility, which is on the first floor of Aliiolani Hale, directly underneath the Supreme Court's courtroom. There's a historic trial courtroom, and displays on Hawaii's legal history.
Posted on June 10, 2020 in ▪ Coronavirus, ▪ 42 U.S.C. § 1983 | Civil Rights, ▪ Appellate law, ▪ Due process, ▪ Floods and Flooding, ▪ Inverse condemnation, ▪ Municipal & Local Govt law, ▪ Property rights, ▪ Rent Control, ▪ Seminars, ▪ Vacation rentals | Permalink | 0 Comments
Tex App: City Ordinance Prohibiting Short-Term Rentals Unconstitutional
We've been meaning to post the Texas Court of Appeals' opinion in Zaatari v. City of Austin, No. 03-17-00812 (Nov. 27, 2019) for some time.
The City of Austin adopted an ordinance that, among other things, prohibited short term rental of a residence that is not also owner-occupied, barred certain activities (such as weddings) on other properties, and permitted City officials to enter such properties to ensure compliance with the regulations. Property owners challenged the ordinance, and the State of Texas intervened as a plaintiff. The trial court granted the City summary judgment.
The court of appeals reversed:
The ordinance provision banning non-homestead short-term rentals significantly affects property owners' substantial interests in well-recognized property rights while, on the record before us, serving a minimal, if any, public interest. Therefore, the provision is unconstitutionally retroactive, and we will reverse the district court's judgment on this issue and render judgment declaring the provision void. The ordinance provision restricting assembly infringes on Texans' fundamental right to assemble because it limits peaceable assembly on private property. Therefore, because the City has not demonstrated that the provision is narrowly tailored to serve a compelling state interest, the provision violates the Texas Constitution's guarantee to due course of law, and we will reverse the district court's judgment on this issue and render judgment declaring the provision void.
The good stuff starts on page 16 of the slip opinion, where the court concluded that the ordinance is unconstitutionally retroactive. The owners have a settled property right to rent their properties, and the ordinance "eliminate[d] well-established property rights that existed before the ordinance's adoption." Slip op. at 17. The City did not show a compelling interest in regulating these properties, but even if it had done so, on balance the settled expectations of property owners would have outweighed the government's interest.
The right to use property includes the right to rent it, and although it may be regulated to some extent, the City even admitted that "Austinites have long exercised their right to lease their property by housing short-term tenants." Slip op. at 22. The ordinance resulted in a total elimination of that right.
The owners and the State also raised a takings claim, but "having determined that [the ordinance] is unconstitutionally restrictive, we need not address the State and the Property Owners' remaining constitutional challenges to that same section." Slip op. at 23.
Check it out. The entire opinion is worth reading.
Zaatari v. City of Austin, No. 03-17-00812-CV (Tex. Ct. App. Nov. 27, 2019)
Posted on December 23, 2019 in ▪ Due process, ▪ Regulatory takings, ▪ Vacation rentals, ▪ Vested rights | Permalink | 0 Comments
Latest Ep, Eminent Domain Podcast: Short-Term Rentals, Tiki Island, The Castle, Penn Central
Last week, along with Bob Grace, I (Robert (don't-call-me-Bob) Thomas), was a guest on Clint Schumacher's Eminent Domain Podcast. Stream it above, or download it here.
Clint and I had a wide-ranging discussion that centered on the recent trend of limiting short-term rentals, the legal pushback, and (of course) takings. We discussed the memorably-captioned Tiki Island case from Clint's home state of Texas. Penn Central, naturally. Vested rights. Mrs. Murphy exceptions (although those deal with discrimination in rental housing). First Amendment stuff. The upcoming ALI-CLE Eminent Domain and Land Valuation Litigation Conference in Nashville (Jan 23-25, 2020), at which both Clint and Bob are speaking. And The Castle (which might not only be our favorite eminent domain movie, but our favorite movie period).
Not only is Clint presenting at our Ethics program in Nashville in January, he will -- as he did in Palm Springs -- be bringing the Eminent Domain Podcast mobile unit, and will be doing the podcast from the Conference. Drop by and say hello and be a guest!
About the only thing that's not perfect about the Eminent Domain Podcast is that it isn't more frequent. But we understand, Clint. As they say, good lawyers are always busy. Just keep 'em coming.
Posted on September 23, 2019 in ▪ Eminent Domain | Condemnation, ▪ Land use law, ▪ Municipal & Local Govt law, ▪ Penn Central, ▪ Property rights, ▪ Regulatory takings, ▪ Seminars, ▪ Vacation rentals, ▪ Vested rights, ▪ Zoning & Planning | Permalink | 0 Comments
New Land Use Law Blog To Follow: Merriam's Corner ("Life, Liberty, and the Pursuit of Land Use")
Land users and dirt lawyers know Dwight Merriam. (And if you don't, you are not really a land user, are you?)
He's won landmark cases (has even beaten Yours Truly in one of those cases way back in the day). Written tons of articles and books. Edits Rathkopf. Contributes to Nichols. Mentored multiple generations of land use lawyers (me included). All while serving his country in the U.S. Navy.
Here's your chance to tap directly into the source. Dwight has (finally) started a blog, Merriam's Corner, about the topics we all love.
So sign up and follow. Listen in as Dwight thinks out loud for our benefit.
Welcome to the blog world, Mr. Merriam.
Posted on August 6, 2019 in ▪ Agriculture, ▪ Eminent Domain | Condemnation, ▪ Environmental law, ▪ Land use law, ▪ Municipal & Local Govt law, ▪ Property rights, ▪ Public Use | Kelo, ▪ Redevelopment, ▪ Regulatory takings, ▪ Rent Control, ▪ RLUIPA | religious land use, ▪ Vacation rentals, ▪ Zoning & Planning | Permalink | 0 Comments
Lawprof: "Does Legalizing Uber and Lyft 'Take' The Property Of Taxi Companies?"
But the longer answer which lawprof Ilya Somin discusses in this short podcast is worth listening to. Check it out.
Here's the summary:
Over the last few years, taxi companies in several cities have brought lawsuits claiming that legalizing ride-share services such as Uber and Lyft violates the Takings Clause of the Fifth Amendment, because it expropriates their supposed property right to a monopoly of the taxi business. Courts have so far rejected these arguments. But they raise broader issues about the nature of property rights, and what kinds of government actions qualify as a taking. Confusion about these matters goes well beyond this specific set of cases. Could treating government-created monopoly privileges as property rights imperil valuable innovations and reforms in many parts of the economy?
We follow the issue, mostly from an academic standpoint (we've yet to take on one of these cases, but find the issues fascinating). We penned an essay on the takings issues in the U. Hawaii Law Review suggesting that the courts' focus on the foundational "property" question should not be the analytical center of these cases. Rather, they should examine the expectations which the owners of taxi medallions possess, instead of isolating a particular "stick" (does an owner have a property rights in a lack of competition," a question which suggests its own negative answer).
This situation may be a case of "nothing new under the sun," because it reminds us of that old war horse of a case, Charles River Bridge v. Warren Bridge, 36 U.S. (11 Pet.) 420 (1837), where the Supreme Court held that a state-granted charter to build and operate a toll bridge did not prohibit the state from allowing another nearby bridge that made the first bridge's charter rights less valuable.
"Property" Investment-Backed Expectations in Ridesharing Regulatory Takings Cases
Posted on May 22, 2019 in ▪ Articles and publications, ▪ Municipal & Local Govt law, ▪ Property rights, ▪ Regulatory takings, ▪ Vacation rentals | Permalink | 0 Comments
Video: HSBA Real Property Section Annual Litigation Update With Kugle And Murakami
As promised, here's the video of our last weeks' presentation by our colleagues Greg Kugle and Mark M. Murakami at the Hawaii State Bar Association's Section of Real Property & Financial Services Section's annual Real Property Litigation Update.
Mark and Greg put on this session every year, and it is a real crash course in the latest and greatest developments in this area of law locally, and nationally.
We shot it guerrilla-style on an iphone, so no comments about shaky video, please.
Go here for the handout with links to the cases they discuss.
Posted on October 22, 2018 in ▪ Administrative law, ▪ Environmental law, ▪ Inverse condemnation, ▪ Land use law, ▪ Municipal & Local Govt law, ▪ Regulatory takings, ▪ Vacation rentals, ▪ Zoning & Planning | Permalink | 0 Comments
HBSA Real Property Section: Annual Litigation Update With Kugle And Murakami
Get ready, be sure to come: tomorrow, Friday, October 19, 2018, our Damon Key partners Greg Kugle and Mark M. Murakami will present their annual tour-de-force session on the past year in real estate and related litigation in Hawaii and elsewhere.
As the note to Real Property Section members notes:
Gregory Kugle and Mark M. Murakami will discuss recent decisions from the Hawaii Supreme Court and Intermediate Court of Appeals, as well as noteworthy cases from the mainland, relating to real estate matters.
Title: Real Estate Litigation Update 2018
Presenters: Gregory Kugle and Mark M. Murakami
Date/Time: Friday, October 19, 2018 at 12:00 - 1:00 p.m.
Place: HSBA Conference Room (1100 Alakea Street, 10th Floor, Honolulu, Hawaii 96813)
Cost: No charge to RPFSS members
Please note that no reservations are needed or will be taken. Seating is limited and will be on a first-come, first served basis, so come early to guarantee yourself a seat!
RPFSS members may participate via teleconferencing by calling 1-808-670-3914 [local] or 1-855-853-0606 [toll free]. No passcode is needed. As a courtesy to all, please remember to mute your phone after you connect, except when asking questions.
This Brown Bag presentation qualifies for 1 CLE Credit through the HSBA. To register for attending in person, please click HERE.
Sign up. Go. Well worth it.
Real Estate Litigation Update - 2018 (Kugle and Murakami)
Posted on October 18, 2018 in ▪ Appellate law, ▪ Due process, ▪ Environmental law, ▪ Inverse condemnation, ▪ Land use law, ▪ Municipal & Local Govt law, ▪ Regulatory takings, ▪ Seminars, ▪ Vacation rentals, ▪ Williamson County | Ripeness, ▪ Zoning & Planning | Permalink | 0 Comments
HAWICA: Vacation Rental Home Is "Public Accommodation," And Can't Discriminate Based On Sexual Orientation
Here's one from the Hawaii Intermediate Court of Appeals, Cervelli v. Bufford, No. CAAP-13-896 (Feb. 23, 2018), in which the court considered whether homeowners who rented out rooms in their home to the public, but refused to do so to a lesbian couple, violated Hawaii's public accommodation laws, or were sheltered from the statute by the Free Exercise Clause and other constitutional provisions.
In short, the court held they could be held liable, even though it is their home, first concluding that renting out a room in your home qualifies as offering a public accommodation, even though it is your residence. The owners advertise and offer rooms to the general public on their website and through third-party websites, rent to a large number of people (up to 200 nights per year), and pretty much takes all comers "aside from same-sex couples and smokers." Slip op. at 11.
The potential renters here inquired if a room was available, were told it was, and then informed the property owner that they were a same-sex couple. After which the owner denied accommodation. The only reason provided was the same-sex relationship.
The court first concluded that Hawaii's anti-discrimination statute governed this case even though it involved a home in which the owners resided, because it covers things like hotels, motels, and inns, and also covers establishments "that provide[] lodging to transient guests," which would include a home. Or at least not automatically exclude a home.
The most interesting portion of the opinion -- the analysis of the property owners' Free Exercise and other constitutional defenses -- begins on page 18 of the slip opinion. The owners asserted that as "strong Christians," they were opposed to renting a room in their home to a couple in a same-sex relationship and had a constitutional right to refuse to do so. The court acknowledged a homeowner's right to be left alone and to privacy and free association and religion, but concluded that the owners "opened up" their home to over 100 customers per year, for money, and thus had effectively forfeited those rights in the rooms. (In more technical terms, the court concluded that even applying strict scrutiny, the State has a compelling interest in prohibiting discrimination on sexual orientation, and that the owners' interest do not outweigh that.) The court disposed of the remainder of the owners' constitutional claims on similar grounds.
The opinion doesn't discuss the Masterpiece Cakeshop case now pending before the U.S. Supreme Court, which presents a similar, but not identical issue. Unlike that case, the Cervelli case doesn't involve claims that the proprietor is an "artist" and is being required to perform some unique service.
The long and the short of this opinion seems to be that if you use your home like a hotel, you are going to be treated like a hotel: "In other words, the success of Aloha B&B's business requires that [the owners] not be left alone." Slip op. at 20. We think that pretty much sums it up.
Cervelli v. Bufford, No. CAAP-13-0000806 (Haw. Ct. App. Feb. 23, 2018)
Posted on February 23, 2018 in ▪ Equal Protection, ▪ Land use law, ▪ Vacation rentals, ▪ Zoning & Planning | Permalink
5th Annual Hawaii Land Use Litigation Update - Hawaii State Bar Association
For those of you who want to listen only,
stream the audio below, or download the mp3 here.
Every year, our partners (and land use and property law mavens) Greg Kugle and Mark M. Murakami present a one-hour tour-de-force update on litigation essentials in their field of practice to the Hawaii State Bar Association's Real Property and Financial Services Section.
Links to the cases they discussed today (and more) are in the handout and below.
Watch, listen, and learn.
2017 Litigation Update - Hawaii State Bar Association Real Property & Financial Services Section 11-17-2017...
Posted on November 17, 2017 in ▪ Appellate law, ▪ Eminent Domain | Condemnation, ▪ Environmental law, ▪ Inverse condemnation, ▪ Just Compensation | Appraisal, ▪ Land use law, ▪ Municipal & Local Govt law, ▪ Penn Central, ▪ Property rights, ▪ Rail, ▪ Redevelopment, ▪ Regulatory takings, ▪ Seminars, ▪ Vacation rentals, ▪ Vested rights, ▪ Water rights | Public trust, ▪ Williamson County | Ripeness, ▪ Zoning & Planning | Permalink | 0 Comments
HAWICA Rejects Planning Department's Formalistic Definition Of "Applicant" In Vacation Rental Case
One for you land users. We're not going to analyze the Hawaii Intermediate Court of Appeals' published opinion in Robert D. Ferris Trust v. Planning Comm'n of the County of Kauai, No. CAAP-15-0000581 (Aug. 9, 2016) in too much detail, because our Damon Key colleagues Greg Kugle and Chris Leong represent the prevailing appellant. But here's a short summary, after which you can read the opinion itself.
The narrow issue in the case involves the definition of the term "applicant" in two different sections in the County's zoning ordinance. The underlying issue is one that's hot right now across Hawaii and elsewhere: short-term or transient vacation rentals, defined in the Kauai zoning ordinance as rental for less than 6 months.
Here, the homeowner had a parcel in an agricultural district, with a single-family residence on the lot. It began renting the home to vacationers in 2003, prior to the County's adoption of an ordinance prohibiting new TVRs outside of certain specially-designated districts. The ordinance also required existing lawful TVRs to register, after which the owner or operator was required to obtain a nonconforming use certificate within a certain time. The County followed up with another ordinance "targeting the grandfathering provision established by" the earlier ordinance. Slip op. at 2.
The owner registered and filed a nonconforming use application. But the Planning Department repeatedly informed it that the application was not complete, and ultimately focused on the fact that the property was condominiumized and the owner thus needed the consent of at least 75% of the owners of the lot in order to apply. A separate ordinance defined "applicant" as someone who possesses a "controlling interest" in the subject property, and according to the Department, it was not sufficient that the applicant was the "owner, operator, or proprietor" of the TVR as set forth in the registration ordinance.
Time marched on while this was being sorted out, and eventually "the Planning Department informed the Ferris Trust that the time period for applying for a nonconforming use certificate ended on August 8, 2011, and asked the Ferris Trust's counsel to advise their client to cease and desist from further use of land designated as agricultural from further use as TVRs." Slip op. at 3. The Trust appealed up the administrative chain to the Planning Commission and after a contested case before a hearings officer, the Commission denied the appeal. On to circuit court under the Administrative Procedures Act. That court affirmed the Commission.
The ICA saw it differently. The issue was whether the Trust could apply for a nonconforming use certificate despite it not having a controlling interest in the property, even though as "owner, operator, or proprietor" of the TVR, it was required by the TVR ordinance to apply for the certificate. The ICA began by noting that lawfully existing uses ("grandfathering") are grounded in constitutional and vested rights principles, and subsequently-adopted restrictions cannot limit a property owner's ability to continue with a preexisting use. The court concluded:
[p]ersons with less than a a seventy-five percent ownership interest may be able to establish vested right to prior lawful conforming uses. Therefore, precluding such persons from even applying for a nonconforming use certificate would be inconsistent with the purpose of the ordinance to identify those engaged in the prior lawful use of their property as a transient vacation rental and allow them to apply to continue that use.
Slip op. at 10-11. Limiting the ability of the Trust to apply as the County argued would raise "serious constitutional questions." Slip op. at 11.
The court applied the avoidance principle to read the ordinances to allow the Trust to seek the required permit, because that would allow the court to avoid those tough questions. Thus, because it was an "operator," the Trust qualified as an applicant, notwithstanding that it did not have a "controlling interest" in the property.
Robert D. Ferris Trust v. Planning Comm'n of the County of Kauai, No. CAAP-15-0000581 (Haw. App. Aug....
A Zoning Due Process Violation From The Land Of Euclid: Owner Can't Lose Nonconforming Use By Actions Of Tenant
HAWSCT: Agencies Have No Duty To Keep Their Records Accurately
HAWSCT: No "Cross-Appeal" In Administrative Appeals
Tiki Island's Prohibition Of Vacation Rentals A Penn-Central Taking (For Now)
Posted on August 9, 2016 in ▪ Administrative law, ▪ Appellate law, ▪ Land use law, ▪ Municipal & Local Govt law, ▪ Property rights, ▪ Regulatory takings, ▪ Vacation rentals, ▪ Vested rights, ▪ Zoning & Planning | Permalink | 0 Comments
Guess What: Hawaii Housing Is Expensive!
Two stories to read, in tandem:
In the ultimate dog-bites-man story, yesterday's Honolulu Star-Advertiser headline reads "Home demand outweighs supply." Well no kidding. As one fellow quoted in story said,"This is the most overstudied subject in the history of mankind ... You don't need a study to know what the numbers are. It's time to stop studying housing and start doing housing." The story is partially behind a paywall, but the lede sums it up: "Hawaii needs up to 66,000 homes if it expects to satisfy demand for housing over the next decade." Increasing demand coupled with restrictive supply means, guess what - high prices and shortages. What's responsible for the lack of housing? There's land on which to build, but it's infamously difficult to develop. As Professor David Callies wrote recently, Hawaii has an "increasingly well-known penchant for lengthy, often decade-long land use permitting processes" and a "climate that increasingly discourages both local and foreign investment in land development, because it is widely perceived as too risky for the private sector to undertake." This results in "housing that is affordable at any but the most astronomical levels[.]"
"Affordable Housing Maui Style" - from newgeography.com via Professor Gideon Kanner. The author reports on a recent visit to the Valley Isle where he discovered that "[t]he cost of even the most modest homes and apartments are off the charts expensive. Property is pegged to what wealthy outsiders from the mainland and abroad are willing and able to pay rather than what the local population can afford."
Do we still wonder why more and more are casting their futures by looking beyond our fair shores?
Minnesota Supreme Court Orders Power Company To Buy The Farm - Literally
Pacific Business News Report On Eminent Domain And The Honolulu Rail
Pacific Business News Details The Rail's Impact On Honolulu Property
Posted on April 8, 2015 in ▪ Land use law, ▪ Vacation rentals, ▪ Zoning & Planning | Permalink | 0 Comments
Thankfully, the only "Tiki Island" we have in Hawaii is a miniature golf course. Because the name "tiki" should be reserved for such things, or for kitschy bars, or Trader Vic-knockoffs.
And please, honest-to-goodness real municipalities should never be named Tiki Island. No matter how nice they appear to be. Just no.
(Martin Denny, by the way, gets a pass - rock on, Mr. Denny.)
But there it is, the Village of Tiki Island, Texas, population 968, "a waterfront community in Galveston County consisting of about 960 homes, with approximately 40% full-time occupants, and 60% part-time occupants."
Something tells us that TI, TX's smallish population and the resident-to-part-timers ratio had something to do with the fact that in 2014, the Village adopted an ordinance prohibiting the short-term rental of residences, an activity that apparently had been ongoing for some time prior. Homes which had been renting before 2011 were "grandfathered," and the ordinance only applied to those who started renting after that date, and as you might expect, this resulted in a lawsuit by homeowners who were subject to the new prohibition who asserted that it was a taking, among other things.
They filed suit in a Texas court to enjoin the ordinance. The trial court agreed, and temporarily enjoined enforcement of the ordinance with respect to the plaintiffs who were actually renting their properties.
The Village appealed, and in Village of Tiki Island v. Ronquille, No. 01-14-00823-CV (Mar. 12, 2015), the Texas Court of Appeals affirmed. It's a very long opinion (53 pages), and unless you want the details about whether the correct parties were named in the appeal, the timing of the appeal, and the like, you need not read all of it. Short version: the Village missed the deadlines for an accelerated appeal from an interlocutory order with respect to all but one of the plaintiffs, so the court of appeals lacked jurisdiction over those appeals, and considered the takings issue only as to one homeowner.
The interesting part begins on page 24 of the slip opinion, the court's analysis of the Village's argument that the homeowner didn't properly plead or prove a regulatory taking. The court concluded that her complaint adequately alleged that her prior and current use of the property (and not just future uses):
Hill pleaded that (1) she researched the permissible uses of her house before committing to buy it, ascertaining that short-term rentals were permissible, (2) she relied upon Village officials assurances that short-term rentals were permitted, (3) the ability to rent short term was a major part of her decision to purchase her house, (4) she engaged in short-term rentals before Ordinance No. 05-14-02 was passed, (5) she is contractually obligated for future short-term rentals, (6) the ability to rent short-term enhances the value of her property, and (7) the prohibition on short-term rental decreases the value of her property. In other words, unlike in Mayhew, Hill challenges the Village's interference with her prior and current existing use of her property, not just proposed future uses.
The court also concluded (starting on page 30) that the homeowner introduced enough evidence supporting her takings claim to obtain the injunction. The key legal factors were the economic impact of the short-term rental prohibition on the homeowner, and her investment-backed expectations, and the court held that she "presented evidence that the enactment of Ordinance No. 05-14-02 had an economic impact on the value of her property, and that she had a reasonable, investment-backed expectation that she could engage in short-term rentals." Slip op. at 40.
The court rejected the Village's argument that her home was worth more than when she bought it (therefore the ordinance did not impact her adversely), and that her expectations were only that the home could be used for what it can be used for post-ordinance: a residence (and not a rental property). The homeowner introduced evidence that renting was legal when she bought the property, that the demand for short-term rentals is strong, that she made substantial improvements to the home to make it rentable, and that in the first nine months of 2014, she earned $25,000 in rental income. And even though the homeowner did not introduce evidence about the use of the house prior to her purchase, "the record does reflect that short-term rentals have long been done in Tiki Island, and that [the plaintiff] was doing short-term rentals for seven years before Ordinance 05-14-02 was passed." Slip op. at 36.
Hill has been renting her Tiki Island home short-term since 2007. She bought it as an investment for the purpose of rentals, and made substantial improvements to the property. Tiki Island's 2014 ordinance banning short-term rentals grandfathered certain identified properties that were already engaged in short-term rentals as of 2011. It is not evident from the record why Hill's use of her home for short-term rentals was not grandfathered, as she was engaged in short-term rentals before the 2011 grandfathering cut-off. The Village's excluding Hill from this grandfathered status, however, foreclosed Hill's existing investment use of her property without an avenue for recoupment. We thus hold that she has identified a vested right for purposes of conferring the trial court with jurisdiction to enter a temporary injunction in her favor.
Bottom line: no appellate jurisdiction over most of the appellees so the injunction remains in place for them, and injunction affirmed for the other homeowner. Overall a good result for them. We'll see if the court rules the same way when the permanent injunction hearing comes up.
Village of Tiki Island v. Ronquille, No. 01-14-00823-CV (Tex. App. Mar. 12, 2015)
Virginia Supreme Court Oral Arguments: Does A Precondemnation Value Statement Come In?
Condemnor's Higher Initial Appraisal, Offer, And Deposit Admissible
Posted on March 24, 2015 in ▪ Appellate law, ▪ Inverse condemnation, ▪ Penn Central, ▪ Regulatory takings, ▪ Vacation rentals, ▪ Vested rights | Permalink | 0 Comments
Materials From State Bar Association Appellate Section Presentation: Admin Law Appeals
Here are the written materials from today's HSBA Appellate Section presentation on administrative law and appeals in Hawaii courts.
A video of the presentation is posted above -- it may be a bit dark, but no matter: all you really need is the sound, anyway. Listen to the audio-only session here:
GWK-RHT-HSBA-appellate-admin-appeals-1-13-2014
Administrative Appeals in Hawaii Courts: How Do You Get There, and How Do You Get Out? (Hawaii State Bar As...
Posted on January 13, 2014 in ▪ Administrative law, ▪ Appellate law, ▪ Land use law, ▪ Municipal & Local Govt law, ▪ Seminars, ▪ Vacation rentals, ▪ Zoning & Planning | Permalink
Hawaii Federal Court: Kauai Charter Amendment Limiting Vacation Rentals Is A Prohibited "Zoning Initiative"
Late last year, we posted the Complaint in a federal court lawsuit originating on Kauai. In that case, the owner of a property that has been designated for resort development for 35 years asserted that the adoption of a Charter amendment by the County's voters and a follow-on ordinance adopted by the County Council that together created a new land use classification ("transient accommodation unit"), and severely limit the number of TAU's was an attempt to restrict the number of visitors and part-time residents.
The Complaint contains three major allegations: (1) the measures are arbitrary and capricious and violate substantive due process as an attempt to limit visitors, (2) they violate the Hawaii Zoning Enabling Act (Haw. Rev. Stat. § 46-4, the state statute delegating zoning authority to the counties in certain areas for all you land use nerds), which prohibits adopting of zoning ordinances by initiative, and (3) the Charter measure violated the Kauai Charter's requirement that the ballot question contain an objective summary of the measure.
In an order filed two weeks ago, the District Court addressed the parties' cross-motions for summary judgment on the latter two counts (neither the plaintiff nor the defendants sought judgment on the substantive due process claim).
The court concluded that the Charter amendment adopted by the voters was, in reality, a prohibited zoning initiative. The court relied on the rationale of Kaiser Hawaii Kai Dev. Co. v. City & County of Honolulu, 777 P.2d 244 (Haw. 1989), a case in which we successfully argued that § 46-4 prohibits a municipality from adopting a zoning ordinance via the initiative process. In Kaiser Hawaii Kai, the Hawaii Supreme Court held that section 46-4 delegates comprehensive zoning authority to the counties, and this requires them to exercise that power in a uniform manner, which is jeopardized by piecemeal voter-adopted measures. The District Court held:
First, although the facts of Kaiser Hawaii Kai are distinguishable from the facts of the instant case, nothing in Kaiser Hawaii Kai indicates that the legal principles which the Hawai`i Supreme Court articulated in that case are limited to initiatives to change the zoning of specific tracts of land. The legal principles in Kaiser Hawaii Kai are clear, and they are equally applicable to other instances in which counties attempt to legislate zoning issues through voter initiative. This Court also rejects Defendants' argument that Section 3.19 and Ordinance No. 912 merely enacted a permissible shift of internal authority within the County. Section 3.19 and Ordinance No. 912 created a land use classification that did not previously exist, and they established the process developers must follow in order to use their land within that classification. Section 3.19 and Ordinance No. 912 did not merely shift authority over a classification and process that already existed. This Court therefore CONCLUDES that Section 3.19 was an improper zoning initiative and, pursuant to Kaiser Hawaii Kai and Haw. Rev. Stat. § 46-4(a), Section 3.19 is invalid.
The court also held, however, that the requirement for a not-misleading ballot measure does not apply to Charter amendments. See slip op. at 47 ("Although KBV presents a logical argument that ballot materials describing a proposed Charter amendment should contain an objective summary and should neither mislead nor advocate a position, the courts are not in a position to create such a requirement.").
A couple of unanswered questions:
The Order doesn't say how the court concluded that a measure adopted as a Charter Amendment can be treated as an ordinance adopted by the initiative power. Under the Kauai Charter, "initiative" is the "power of voters to propose ordinances." That's an entirely diffferent process, with entirely different adoption requirements than initiative ordinances. For example, initiative proposals require the signatures of 20% of the number of eligible voters in the last election, while Charter amendments require 5% of registered voters in the last general election, and initiative proposals undergo an elaborate pre-election process, whereas Charter amendments, once qualified, simply go to the voters for adoption or rejection. Yet, the court treated the Charter amendment as an initiative ordinance. Did the court simply pierce the veil and conclude this was a disguised zoning initiative? Sorry, we just don't know.
In light of the above, would it have been better for the court to have concluded that Kauai voters were simply without the power to amend their Charter to create a new land use or zoning classification? That would have ended up in the same place (the Charter amendment is improper) -- but not because it's an impermissible zoning ordinance, but rather because state law prohibits the counties from creating new zoning classifications, whatever the method used. While it may be an intellectual exercise at this point, if this decision gets appealed to the Ninth Circuit, this seems like it would be an alternative gounds for affirmance.
The court also struck down the follow-on TAU ordinance adopted by the County Council, concluding that because the Charter amendment is invalid, the ordinance falls also because "[t]he Council enacted Ordinance No. 912 to implement [the Charter amendment]. See slip op. at 42. The order doesn't provide more analysis and thus we're not sure how independent council action -- while accomplished to implement what turns out to be an invalid Charter amendment -- can deemed illegal. We think that's the right result, mind you, but the conclusion does not seem to flow as an obvious point, so we would have appreciated an analysis, if only to use in our next case.
There will undoubtedly be more on this case, either in the Ninth Circuit or when the court deals with the remaining substantive due process claim. When that happens, we'll be there.
Order Granting in Part and Denying in Part Plaintiff's Motion for Summary Judgment on Counts II and III of...
Posted on July 15, 2013 in ▪ Due process, ▪ Land use law, ▪ Municipal & Local Govt law, ▪ Vacation rentals, ▪ Vested rights, ▪ Voting rights | election law, ▪ Zoning & Planning | Permalink
New Complaint Challenging Kauai's Limit On Visitor Units
An interesting new complaint filed in U.S. District Court in Hawaii, asserting claims for substantive due process, violation of the zoning enabling act, and the Kauai County Charter.
A owner of property that has been designated for resort development for 35 years is asserting that the adoption by the County's voters of a charter amendment severely limiting the number of visitor accommodation units (no more than one new unit, and other restrictions), was an attempt to restrict the number of visitors and part-time residents. The complaint asserts that the County has no legitimate interest in restricting tourists or part time residents, and that the charter amendment is a zoning regulation that cannot be adopted by the voters (recall that in Hawaii, zoning ordinances may not be adopted by initiative - thanks to a case we argued many years ago - see here and here).
We'll keep track of this one as it progresses.
Complaint, Kauai Beach Villas - Phase II v. County of Kauai, CV 12-00483-LEK (filed Aug. 27, 2012)
Posted on August 29, 2012 in ▪ Due process, ▪ Land use law, ▪ Municipal & Local Govt law, ▪ Vacation rentals, ▪ Zoning & Planning | Permalink
HAWICA: Must Pursue Administrative Process To Object To Vacation Rentals
The Hawaii Intermediate Court of Appeals issued an opinion yesterday in Pavsek v. Sandvold, No. 29179 (June 13, 2012), holding that a person complaining about a vacation rental cannot circumvent the City's enforcement procedures and the administrative appeal process by instituting an original jurisdiction lawsuit claiming that a homeowner is renting her property in violation of the City's prohibition on rentals of less than thirty days:
We hold that: (1) HRS § 46-4(a) does create a private right of action in favor of a real estate owner directly affected by an alleged LUO [Land Use Ordinance] zoning violation, but that the owner's action is subject to the doctrine of primary jurisdiction; (2) under the doctrine of primary jurisdiction, the Pavseks are required to seek an administrative determination of their claim that their neighbors have been violating the LUO before proceeding with their suit to obtain judicial enforcement of the LUO; (3) the nuisance claims raised by the Pavseks in their complaint were derived from their claim of the LUO violation and therefore are also subject to the primary jurisdiction doctrine; (4) the Circuit Court properly dismissed the claims alleging breach of fiduciary duty and unjust enrichment for failure to state a claim for relief; and (5) the Circuit's Court's remedy of dismissal with prejudice of the claims subject to the primary jurisdiction doctrine is not consistent with the remedies applicable to the doctrine.
Slip op. at 2-3 (emphasis original).
We won't be analyzing the opinion in detail, since our Damon Key colleague Greg Kugle represents the prevailing property owners, and argued the case. The briefs are posted here.
Pavsek v. Sandvold, No. 29179 (Haw. Ct. App. June 13, 2012)
Posted on June 14, 2012 in ▪ Administrative law, ▪ Land use law, ▪ Municipal & Local Govt law, ▪ Vacation rentals, ▪ Zoning & Planning | Permalink
Wednesday Round-Up
Here's what we're reading today:
Debating the Constitutinality of New York's Blight Condemnations - lawprof Ilya Somin, via Volokh.
Our colleagues at the California Eminent Domain Report on "The Anti-SLAPP, Something to Remember"
House Shelves Hawaii Vacation Rental Bill - a follow up from Honolulu Civil Beat to this story.
The good folks at Sheppard Mullin give us their view of the PPL Montana opinion.
The rent is too damn high! - Reason Foundation on "The Case Against Rent Control"
Also, here's an inverse condemnation case we're watching that the Texas Supreme Court recently agreed to review:
The Supreme Court of Texas Blog on Kopplow Dev., Inc. v. City of San Antonio, No. 11-0104: "The city built a water project that affected the use of Kopplow's property, and after being sued for inverse condemnation, the city decided to sue to condemn the land outright. The petition raises a variety of issues, including how to value the portion of the land taken."
Here are the briefs.
Here's the docket.
Posted on March 14, 2012 in ▪ Inverse condemnation, ▪ Public Use | Kelo, ▪ Regulatory takings, ▪ Rent Control, ▪ Vacation rentals, ▪ Water rights | Public trust | Permalink
Thursday Round-Up
The Ninety Day Period to Challenge a Land Use Approval is Not Extended by More General Rules Governing Administrative Mandamus - via Abbott & Kindermann's Land Use Blog.
Supreme Court Revises Test to Establish Common Carrier Status in Condemnation Cases - more on the Edwards Aquifer case, from the Jackson Walker firm in Texas.
Eminent Domain & Land Use in Hawaii - May 12, 2012 seminar in Honolulu.
Res judicata did not bar circuit court's review of inverse condemnation claim - via the Michigan Township Law Blog.
Hawaii Legislature: the gift that keeps on giving. The Senate passed the bill that would require "nonresident" property owners to use a real estate broker to rent their property as a short term (vacation) rental. Yes, really.
Civil Beat op-ed: Reality Check Needed On Reapportionment Plan.
Posted on March 8, 2012 in ▪ Eminent Domain | Condemnation, ▪ Inverse condemnation, ▪ Land use law, ▪ Municipal & Local Govt law, ▪ Seminars, ▪ Vacation rentals, ▪ Voting rights | election law | Permalink
"Nonresident" Property Owners Must Employ Property Managers For TVRs?
Check this out: the Hawaii Legislature is considering two bills (HB1707 and SB2089) that will require "nonresident" property owners who rent their property for thirty days or less (transient vacation rentals) to use a licensed real estate broker to rent the property, and to employ a property manager to operate it. "Nonresident owner" is defined as an out-of-state owner or someone who lives "on a different island" from their rental property.
Not surprisingly, much of the testimony in favor of these measures has been submitted by the counties (these bills purportedly would make it easier to collect TVR taxes), and by property managers and real estate agents.
Putting aside any questions of whether this is good policy or not, think there might be any problems with this?
Posted on February 20, 2012 in ▪ Land use law, ▪ Municipal & Local Govt law, ▪ Vacation rentals, ▪ Zoning & Planning | Permalink
It's Others' Property, You Just "Own" It*
In Landlord's Uphill Fight to Ease Rent Restrictions, The New York Times reports on the Harmon cert petition (we posted the petition and the amici briefs in that case here), a challenge to New York City's rent control ordinance.
We won't rehash our thoughts on the case, but wanted to point out what we thought was the most revealing passage from the Times article:
Mr. Harmon said he had appealed to his assemblywoman, Linda B. Rosenthal, a strong supporter of rent regulations. Ms. Rosenthal said Mr. Harmon had asked for an exception to rent regulations for his building, which she found untenable because it would, she said, extend to thousands of other people in "the vanishing middle class."
"I understand he thinks he could make more money, that he is being deprived," she said. "But I have so many constituents who would willingly trade his problems for theirs."
As for luck, she said, Mr. Harmon was "lucky enough to inherit a town house."
She said her views had nothing to do with the fact that she lives in a rent-regulated apartment, though she added, "If I didn't, I probably wouldn't be representing tenants in this district because I couldn't afford to live in the city."
You see, rent control is designed to even out the way that the Fates distribute luck (especially good luck), and to level the playing field for those who would be willing to "trade up" their problems for the problems of others. We think it sounded better in the original German: "Jeder nach seinen Fähigkeiten, jedem nach seinen Bedürfnissen!"
*with apologies to Dean Martin, who apparently originated the quote about Frank Sinatra: "It's Frank's world, we just live in it."
Posted on December 22, 2011 in ▪ 42 U.S.C. § 1983 | Civil Rights, ▪ Land use law, ▪ Municipal & Local Govt law, ▪ Property rights, ▪ Regulatory takings, ▪ Vacation rentals | Permalink
What's That Definition Of "Insanity" Again?
No less a light than Albert Einstein is reported to have said that the "definition of insanity is doing the same thing over and over again and expecting different results." That quote has always seemed more apocryphal than accurate to us, but it's a good definition regardless of who first uttered it.
Exhibit "A" appended to that definition might be New York City's "emergency" housing Rent Stablization Law, adopted for the first time in 1969 and renewed eleven times since. The RSL controls how much rent the owners of rent-stablized apartments may charge their tenants (you know, to keep poor folk like Faye Dunaway in their apartments). The city's justification for the RSL is to deal with a series of housing "emergencies" (initially, the "effects of war and the aftermath of hostilities," and then any rise in the city's vacancy rate above 5%), and to allow a "transition from regulation to a normal market of free bargaining between landord and tenant" while encouraging the new construction of apartments.
But in the 40-plus years since the RSL's initial adoption (and serial re-adoptions) the vacancy rate has never been north of 5%, and the promised transition to a free market and new construction didn't happen either.
The owner of an apartment building sued in federal court, asserting that the RSL violates due process and is an unconstitutional taking. The District Court predictably dismissed, and the Second Circuit predicatably affirmed. We say "predictably," because as Richard Epstein notes, "[t]he court's short and uninspired opinion was undeniably correct as a matter of current constitutional law. But for that very reason, it was also hopelessly defective as a matter of constitutional theory."
In October, the property owner filed a cert petition. The respondents declined to file briefs in opposition, and the Court was originally scheduled to consider the petition in Friday's conference. But on December 5, the Court requested responses, due January 4, 2012. The HuffPo report "New York City Landlord Takes Rent Regulation Fight To Supreme Court" wondered why the Court would ask for opposition briefs if the law is as clear as Professor Epstein says it is (it is), and speculated that perhaps the cert pool memo identified an issue that at least one Justice found of interest. Of course we don't know what might have spurrred the Court's request, but in scanning the petition and the three amicus briefs submitted in support (see below for all three), one really stood out by making a very interesting argument. The amicus brief filed by two property owner organizations argued that the RSL's 40-year history of failing to accomplish its stated goals deprives it of its "rational basis" to which reviewing courts must defer:
This is a "back to the future case." The federal courts below failed to recognize the wisdom of hindsight available to them when considering whether to defer to the judgment of the City. Although transitioning from a regulated market to a free market while encouraging new construction may be a legitimate purpose, nearly half-a-century of history reveals that the RSL did not work, does not work, and will not work. Every three years, when the City again declares a housing emergency, it also acknowledges, as it must, that the RSL has again failed. The City cannot rationally believe that the RSL ever will achieve its goal. It is a sisyphean task doomed to failure and frustration that the RSL has laid on half the City's landlords. Enough is enough. Accordingly, this Court has a unique opportunity in this case to define the limits of judicial deference when there is a compelling history that a governmental program simply does not work.
Brief at 7. The brief highlights the Supreme Court's eminent domain trilogy (Berman, Midkiff, and Kelo), and argues "it is now apparent that the legitimate purposes of government action involved in those cases did not come to fruition in whole or in part. If the courts in Berman, Midkiff, and Kelo had the wisdom of hindsight available to them when considering whether to defer to the judgment of local government, they might have been decided differently." Br. at 10-11. The brief asserts that in those cases, the projected benefits of the takings were "colossal failure[s]." Br. at 13. To that list, the brief could have added the gas station rent control measure in Lingle v. Chevron U.S.A. Inc., 544 U.S. 528 (2005), which was ostensibly designed to lower gas prices, but did no such thing.
The brief makes sense, and seems designed to appeal to Justice Kennedy, who asserted in his Lingle concurring opinion that a regulation might be "so arbitrary or irrational as to violate due process. ...The failure of a regulation to accomplish a stated or obvious objective would be relevant to that inquiry."
But it's still a long shot in terms of constitutional law because a court applying the "rational basis" test as currently formulated will not likely care there's proof a government plan won't actually work, or that there's proof it hasn't worked. Because you never know, it might work. Cf. Einstein. As Gideon Kanner pointed out, the rational/conceivable basis test as currently applied by the courts means that judges simply will not examine the government's rationale for adopting a law:
In my post-Midkiff lectures, I have been using as an example of the absurdity inherent in this judicial formulation a hypothetical taking for senior housing for elderly Martians living among us. Would that pass muster as a "public use"? Hyperbole, you say? Be careful. In a prime example of Oscar Wilde's dictum that life imitates art, I offer for your consideration the pertinent part of the transcript of an oral argument before the U.S. Court of Appeals for the Ninth Circuit. There, the U.S. Justice Department asserted that, if Congress were to enact laws for the benefit of unseen and undetected "space aliens" among us, the courts would have no alternative but to approve it as consistent with the Constitution:
JUDGE FLETCHER: . . . Is it conceivable that space aliens are visiting this planet in invisible and undetectable craft?
MR. YELLIN: Is it conceivable?
JUDGE FLETCHER: That's my question.
MR. YELLIN: Yes, it's conceivable.
JUDGE FLETCHER: And that would be a basis for sustaining Congressional legislation, if . . . the person sponsoring the bill said, "Space aliens are visiting us in invisible and undetectable craft, and that's the basis for my legislation," we can't touch it?
MR. YELLIN: If Congress made a finding of that sort?
MR. YELLIN: Your Honor, I think if Congress made a finding of that sort, I think, Your Honor, it would not be appropriate for this Court to second guess that.
JUDGE FLETCHER: Okay, in other words, "conceivable" is "any piece of nonsense is enough."
Gideon Kanner, "Unequal Justice Under Law": The Invidiously Disparate Treatment of American Property Owners in Takings Cases, 40 Loyola L.A. L. Rev. 1065, 1080-81 & n.68 (2009).
Oh yeah, the government won that case.
The Harmon case seems like a good vehicle by which to drive home the concept that the courts need not wear blinders in property cases any more than they do in cases involving other fundamental rights, and the RSA's amicus brief makes the point well; but given the state of the law, we're not holding out for a change of heart by the cert pool clerk.
Here are the other two amicus briefs in the case:
Brief Amicus Curiae of Atlantic Legal Foundation and Center for Constitutional Jurisprudence in Support of Petitioners
Brief Amicus Curiae of Pacific Legal Foundation, Cato Institute, and Small Property Owners of San Francisco Institute in Support of Petitioners James D. Harmon, Jr., and Jeanne Harmon
We'll post the BIO when it is available.
Brief Amici Curiae Rent Stabilization Assn of New York & Small Property Owners of New York in Support of Pe...
Posted on December 11, 2011 in ▪ 42 U.S.C. § 1983 | Civil Rights, ▪ Appellate law, ▪ Municipal & Local Govt law, ▪ Property rights, ▪ Regulatory takings, ▪ Vacation rentals | Permalink
Cal App: City May Enter Rental Property To Make Inspections
The City of Hayward, California, was concerned that residential rentals within its borders were "decent, safe, and sanitary," and by ordinance required the owners or tenants of such units to allow city officials to inspect them. If an owner or tenant refused, the "Enforcement Official" was authorized to procure an "inspection warrant" and levy a monetary fine on the property owner.
An association of rental owners sought a writ of mandate, challenging the ordinance because it violated the Fourth Amendment, among other reasons. The trial court granted the writ and held the ordinance facially invalid because it compels a property owner to provide access to a tenant's residence without tenant consent, and violates the substantive due process rights of the property owners because it levies a monetary penalty on a property owner even when the tenant is the one refusing to allow inspection.The court enjoined enforcement of the ordinance.
The city then amended it to require the owner to make a "good faith effort to obtain the consent of the tenant" for an inspection, and asked to discharge the writ (welcome to California practice) because the amendment addressed the court's problems. Although it overruled most of the property owners' objections, the court agreed that the requirements that a property owner in good faith seek the tenant's permission and be present at the inspection made the property owner an "involuntary agent" of the government, and that the fines made an owner responsible for the inaction of a tenant.
The Court of Appeal reversed. In Rental Housing Owners Ass'n of Southern Alameda County, Inc. v. City of Hayward, No. A128168 (Sep. 30, 2011) (published Oct. 25, 2011), the court concluded that the city's ordinance is not facially invalid. The court held that property owners were not forced to be agents of the government, since under California law an agency relationship is created only with mutual assent, and the "good faith" requirement did not result in any kind of agreement between the owners and the government. Slip op. at 9-10.
Nor did the good faith requirement violate the Fourth Amendment. Property owners do not have standing to assert a tenant's rights against unreasonable searches and seizures, and in any event, the ordinance does not allow the city to enter a residence without either consent or a warrant. The court also rejected the contention that the ordinance conflicted with the landlord-tenant code, a state law establishing the conditions under which a property owner may enter leased premises to inspect and repair. The court concluded that the ordinance only set the terms by which the city inspector could enter a residence, and does not affect a landlord's.Slip op. at 10-11.
Finally, the court rejected the substantive due process argument. The property owners asserted that the fine provision lacked a "conditional nexus between a recalcitrant tenant's non-cooperation and a consequential monetary sanction against the owner." Slip op. at 13. Because the ordinance does not contemplate fining an owner for a tenant's refusal to allow inspection in every case ("or even in a vast majority of cases"), a facial challenge could not be sustained. Slip op. at 13. In other words, because there may be some circumstances where the owner could not be fined, or there may be situations where the city may not choose to impose it, the ordinance was not facially invalid. The court did not mention the possibility that the fine provisions could be challenged "as applied" to a particular circumstance in a future case, although it did not mention that.
Rental Housing Owners Ass'n of Southern Alameda County, Inc. v. City of Hayward, No. A128168 (Sep. 30, 2011...
Posted on October 27, 2011 in ▪ Due process, ▪ Land use law, ▪ Municipal & Local Govt law, ▪ Property rights, ▪ Vacation rentals | Permalink
Oral Argument Recording In HAWICA Case: Can Complainer Avoid The Administrative Process By An Original Jurisdiction Lawsuit?
As we noted in this post, last week the Hawaii Intermediate Court of Appeals heard arguments in Pavsek v. Sandvold, No. 29179. In that case, the court is considering whether a complainer can circumvent the City's enforcement procedures and the administrative appeal process by instituting an original jurisdiction lawsuit claiming that a homeowner is renting her property in violation of the City's prohibition on rentals of less than thirty days.
We didn't live blog the argument or analyze the issues because our firm represents one of the appellees (my Damon Key partner Gregory Kugle argued the case).
Here's the streaming audio:
ICAOA_011211_29179
Or you can download it here (caution, it's a 85mb mp3).
Well worth a listen.
Posted on January 17, 2011 in ▪ Appellate law, ▪ Land use law, ▪ Vacation rentals | Permalink
HAWICA Oral Argument: Can Complainer Avoid The Administrative Process By An Original Jurisdiction Lawsuit?
Starting at 10:00 a.m. on Wednesday, January 12, 2011, the Hawaii Intermediate Court of Appeals will hear oral arguments in Pavsek v. Sandvold, No. 29179. In that case, the court is considering whether a complainer can circumvent the City's enforcement procedures and the administrative appeal process by instituting an original jurisdiction lawsuit claiming that a homeowner is renting her property in violation of the City's prohibition on rentals of less than thirty days.
We won't be analyzing the issues or live blogging the arguments because our firm represents one of the appellees (my Damon Key partner Gregory Kugle will be arguing on Wednesday), so here's the summary of the case from the Judiciary web site:
Plaintiff-Appellants Joseph Pavsek and Ikuyo Pavsek (the Pavseks) appeal from the final judgment entered by the Circuit Court of the First Circuit (circuit court) in favor of Defendant-Appellees Todd Sandvold, Juliana Sandvold, Kent Sather, Joan Sather, Waialua Oceanview LLC, Hawaii Beach Homes, Inc., Hawaii Beach Travel, Inc., and Hawaii on the Beach, Inc. (Appellees). The Pavseks own residential property on Oahu's North Shore and Appellees own or manage property that is on the same street as the Pavseks' property. The Pavseks filed a complaint against Appellees alleging, among other things, that Appellees have been using the properties Appellees' own or manage as transient vacation units and/or bed and breakfast homes in violation of the City and County of Honolulu (City) Land Use Ordinance. The circuit court granted the Appellees' motions to dismiss the Pavseks' complaint and entered final judgment in favor of Appellees.
On appeal, the Pavseks argue that the circuit court erred in dismissing their complaint by ruling that: 1) the Pavseks had no direct statutory right to seek an injunction to enforce the City's zoning ordinance under Hawai`i Revised Statutes § 46-4(a) (Supp. 2009); 2) the Pavseks had failed to name the City as an indispensable party; 3) the Pavseks have failed to state a claim for nuisance; 4) the Sandvolds owed the Pavseks no fiduciary duties regarding a jointly-owned easement; and 5) the Pavseks cannot maintain a claim for unjust enrichment.
Here are the briefs in the case:
Opening Brief (Pavsek)
Answering Brief (Sandvold-HBH)
Answering Brief (Sather)
Answering Brief (Waialua OceanView, HBT, HOB)
Reply Brief (Pavsek)
The ICA will be convening in the Supreme Court courtroom, 417 South King Street, Honolulu. We'll link to the oral argument recording once it becomes available.
Posted on January 11, 2011 in ▪ Administrative law, ▪ Appellate law, ▪ Land use law, ▪ Vacation rentals | Permalink
Is POTUS' Hawaiian Vacation Rental "Illegal?" Here's Official City Policy
Honolulu Civil Beat reports this exclusive "Obama's Winter White House an Illegal Rental" (complete CB stories are usually behind a paywall, but they've posted this one in its entirety). According to the Civil Beat story:
President Barack Obama's two-week stay at his Hawaii Winter White House was illegal under a long-standing Honolulu ban on short-term rentals.
Obama did not break the law by staying at the house, but the property owner who rented his house to the Obamas does not have the permit that would allow a stay of fewer than 30 days.
"They were here for about two weeks, approximately, but I don't want to get into the contractual issues," Weinberg said. "They don't have to rent it for 30 days but you have to leave a 30-day window. I had to make sure that during that period, either 15 days after them or 15 days before them, I can't rent it. And that was the case with (the Obamas)."
Weinberg's explanation is one that's commonly offered, but that still represents an illegal renting practice. Since the 1980s, Honolulu's land-use ordinance has required anyone renting property for a period of "less than 30 days" to obtain a permit to do so. The law was crafted to discourage a spike in short-term vacation rentals, which had residents in many communities complaining of wild parties and other neighborhood disruptions. The city hasn't issued any new permits in two decades. For years, the question of whether the city should again issue permits has generated controversy.
"When someone takes the 30-or-more-days contract but 'leaves early,' and rents it for 15 days, they can't do that," Friedel told Civil Beat at the time. "It's not legal. And they're doing it all the time. They're lying through their teeth, and it's what makes enforcement so difficult."
This issue has hit the press before, as noted in the San Francisco Chronicle story ("Obamas staying at Kailua Beach on vacation"), and in this piece from the Honolulu Star-Bulletin ("Obama's rental home in Kailua is legal, city says").
The short-term rental (aka "transient vacation rental") issue is not quite so simple, and may not lend itself to obvious answers. For example, despite the City now apparently asserting that the rental to the Obamas is "illegal," in the Star-Bulletin article, the then-Deputy Director (now Director) of the Department of Planning and Permitting asserted otherwise:
As it turns out, Obama's beachfront rental is legal, according to the city.
Obama's rental is "a typical, albeit luxurious, single-family home in a residential zoning district," said David Tanoue, deputy director for the city Department of Planning and Permitting, which oversees rental units.
"This particular residence has never been cited by the DPP for illegal transient vacation unit rentals," Tanoue said.
And despite a change of ownership of the property earlier this year, it does not appear that the situation has changed all that much from that recounted in the article.
So what is the City's position? Here's about as "official" as you can get, a Position Statement filed by the City in the Zoning Board of Appeals in a 2007 case, which states:
Petitioners properly obtained an agreement from [the tenant] to occupy the dwelling for the minimum thirty (30) days, thus complying with the [Land Use Ordinance]. However, the Director's interpretation of the TVU restriction is that no other persons may occupy the dwelling within the same thirty (30) days including family and friends regardless of the [tenant]'s leaving before the thirty (30) days is completed.
See page 3 of the Position Statement appended to the ZBA's written order (page 8 of the pdf). The ZBA upheld the Director's policy, concluding that when the property owners' families occupied the houses after the tenants abandoned them, the property owners violated the restriction on rentals less than thirty days term. A few pages later, the Director clarified further:
The Director interprets the LUO to preclude the occupancy of a residential dwelling for less than thirty days when the property owner is receiving some sort of compensation. Because Petitioners choose to receive compensation from others for occupancy of their property, they must comply with the minimum thirty days. Thus, the LUO allows a land owner to rent their property for thirty (30) day blocks, and theoretically, may rent their property to separate individuals or party twelve times per year. The Director further interprets the LUO as not requiring that those renting for thirty (30) days be required to actually occupy the dwelling for the full thirty (30) days. Because there is no way of forcing a person or party to stay the full thirty (30) days, the Director's interpretation is that no other person or party occupy the property for that same thirty day.
See page 6 of the Position Statement.
Posted on January 5, 2011 in ▪ Land use law, ▪ Property rights, ▪ Vacation rentals | Permalink
11th Circuit: Ixnay On The Vacay Rental Lawsuit
Not much new in Numont v. State of Florida, No. 04-13610 (11th Cir., July 2, 2010) (per curiam). There, property owners sued to enjoin a Monroe County (aka the Florida Keys) ordinance that prevents "vacation rentals." The opinion makes short work of two issues.
First, the court disposed of the claim that the ordinance was not properly adopted because it underwent "substantial or material" changes during the adoption process. The federal court certified the question to the Florida Supreme Court, which answered that the changes made conformed to the public notice, the ordinance was properly adopted.
Second, the property owners' takings claim was not ripe since they conceded they had not sought relief in state court. The court rejected the property owners' claim that doing so would be futile because the ordinance was "part of a larger regulatory effort to ban vacation rentals, an effort that they had challenged twice in Florida state courts." Slip op. at 6. Still gotta try, held the court.
Speaking of vacation rentals, according to "Paris Aims to Curb Apartment Rentals to Tourists" (NY Times), the crackdown isn't just in Florida.
Posted on July 6, 2010 in ▪ Land use law, ▪ Vacation rentals, ▪ Williamson County | Ripeness | Permalink
The Dark Side of Zoning
An interesting op-ed piece in Sunday's Honolulu Star-Bulletin, "Thank zoning laws for your peaceful home," extols the virtues of zoning:
It has now been more than 85 years since the residents and city council of the little village of Euclid, Ohio, found that their quiet neighborhoods, where their children played, where they walked their dogs and spent their quiet hours after a hard day's work, had no legal government protection from what could be built next door; not from a horse stable, a cement factory or even a slaughterhouse. So to their credit, Euclidian zoning was born, and upheld by the courts as a reasonable protection for residential areas.
The case the author is referring to, of course, is Village of Euclid v. Ambler Realty Co., 272 U.S. 365 (1926), the case in which the U.S. Supreme Court first upheld the segregation of land uses in an Ohio suburban town into districts against a substantive due process challenge. Law students study the case, land use lawyers and planners know it intimately, and "Euclidean" zoning has become the shorthand for district-based single use zoning.
Overall the author's points are valid, as zoning has become so well accepted as the norm that its general validity is not often questioned. (Only one major U.S. city -- Houston, Texas -- has no formal zoning code, although it does have land use and other regulations governing the use of property.) However, before thanking Euclid and zoning for too much, a couple of points should be clarified, because zoning has a dark side which has been present since its inception.
First, the contention that before zoning, the residents of Euclid had no legal protection against a slaughterhouse or cement factory being located next door is not quite right: the law of public and private nuisance allowed (and still allow) property owners to go to court to prevent uses of property that injure their own property. At common law, no one had the right to make use of their property in such a way to injure their neighbors. The government's police powers could also be used to protect against nuisances. See, e.g., Hadachek v. Sebastian, 239 U.S. 394 (1915).
Second, the nuisance principle played an important part in convincing a very conservative Supreme Court to produce a surprisingly Progressive decision. After all, Euclid was decided during a time in which the Court routinely struck down all sorts of government regulations on the basis that they violated economic rights or the freedom to contract. Given the Court's philosophical leanings, it was even more surprising that the Euclid decision was authored by one of the "Four Horsemen," Justice Sutherland. These Justices were apparently convinced to treat zoning as a form of nuisance prevention. What was the "nuisance" being prevented? Apartments. Specifically, apartments near single family homes.
In a carefully worded after-the-deadline amicus brief filed by Alfred Bettman (who just happened to be a good friend of Chief Justice Taft) on behalf of the National Conference on City Planning, he argued that zoning was simply the "modern mode" of nuisance law, and thus validly could keep "residential" uses separate from apartments which are "disorderly, noisy, slovenly, blighted and slum-like districts" in the same fashion as nuisance law.
In those days, "slums" and "tenements" were code words for "immigrants" and "minorities," and it should not be a big jump to see how the conservative Justices received what we would today call the "meta-message" loud and clear: if you uphold zoning, we can keep "those" kind of people away from "our" kind of people. With those of roots, it should be no surprise that in the intervening 85 years, zoning has sometimes been to keep "undesirables" out of the neighborhood, to validate NIMBYism, or even as a weapon for out-and-out racial discrimination and segregation of races and classes. The district judge had invalidated Euclid's ordinance for the latter reason, but was reversed by the Supreme Court.
Interesting historical note: the first vote by the Court was 5-4 to affirm the district court's decision, but after Bettman contacted Chief Justice Taft and suggested that his brief was important enough to be filed after the deadline (and after oral argument), the case was reargued, this time with a different result. I guess back then, this is what was meant by "friend of the court." Today, we'd call it an ex parte contact.
If you want the Bettman brief, let me know and I will send you a copy. Professor Gideon Kanner posts his thoughts on the case here. For more about the Euclid case, pick up a copy of The Zoning of America: Euclid v. Ambler, available from Amazon.
Posted on December 14, 2008 in ▪ Land use law, ▪ Property rights, ▪ Vacation rentals | Permalink
Oral Argument Scheduled in Ninth Circuit Maui Vacation Rental Appeal
The Ninth Circuit has scheduled oral arguments in Maui Vacation Rental Association, Inc. v. County of Maui, No. 08-15251, the Ninth Circuit appeal from the Hawaii district court's dismissal of MVRA's complaint which sought to declare Maui's shut down of vacation rentals illegal. The court will hear argument on November 21, 2008, at 9:00 a.m. in Honolulu.
The issues in the case are spelled out in the briefs:
Opening Brief of MVRA
Answering Brief of the County of Maui
Reply Brief of MVRA
The case and the issues have also been reported in the media:
Los Angeles Times: Maui: Vacation rentals and B&Bs shut down and 50 illegal Maui B&Bs & vacation rentals shut down
San Francisco Chronicle: Maui County closes unlicensed bed and breakfasts and vacation rentals
The Maui News: Vacation rental suit dismissed in federal court
Honolulu Star-Bulletin: Maui B&Bs face 'crisis'
inversecondemnation.com: Federal Court Dismisses Vacation Rental Due Process Claims -- Details (with links to the District Court's opinion, MVRA's complaint, and the briefs in the district court)
Posted on September 4, 2008 in ▪ Appellate law, ▪ Due process, ▪ Land use law, ▪ Property rights, ▪ Vacation rentals, ▪ Vested rights | Permalink | 0 Comments
Ninth Circuit: City's (Alleged) Failure to Enforce the Zoning Code Is Not A Substantive Due Process Violation (Oh, And Armendariz is Still Overruled)
In Shanks v. Byrd, No. 06-35665 (Aug. 27, 2008), the Ninth Circuit held that a municipality's alleged failure to enforce its zoning laws was not a violation of the Fourteenth Amendment.
Developers who convert homes into student residents apparently did not obtain all of the appropriate permits from Spokane, Washington to remodel a portion of a house in the city's Mission Avenue Historic District. The city issued a building permit, but the Spokane zoning code requires additional permissions when historic landmarks are involved, and the developers did not seek or obtain a "certificate of appropriateness" or an "administrative special permit" from the city's Historic Landmark Commission. The city did not object, and took no steps to require the permits.
A group of neighbors and community organizations sued the property owners and the city, alleging the city's failure to enforce the zoning code was a violation of their due process rights and a violation of a federal civil rights statute (42 U.S.C. § 1983), and violated the National Historic Preservation Act and the Spokane zoning code. The district court dismissed the complaint for failure to state a claim, and the Ninth Circuit affirmed.
Relying on Armendariz v. Penman, 75 F.3d 1311 (9th Cir. 1996), the city first claimed the due process claims were preempted by the Takings Clause. The city asserted that the plaintiffs' claims that the city's action in not enforcing the zoning code caused a diminution in the value of the plaintiffs' property was a "takings" claim that must be asserted under the Fifth Amendment. The court rejected the argument, noting that Armendariz was overruled in Crown Point Dev., Inc. v. City of Sun Valley, 506 F.23d 851 (9th Cir. 2007) (a decision we discussed here and here):
Expressly repudiating Squaw Valley's suggestion that a "substantive due process challenge brought in the context of regulating use of real property might not be viable," we recently held that "the Armendariz line of cases no longer can be understood to create a blanket prohibition of all property-related substantive due process claims."
Slip op. at 11834 (citing Action Apartment Ass'n, Inc. v. Santa Monica Rent Control Bd., 509 F.3d 1020, 1025 (9th Cir. 2007)). The court noted that the plaintiffs were not seeking just compensation, but an invalidation of the land use action that was alleged to be "arbitrary and capricious."
The court disposed of the substantive due process claim by first determining that the developers were not acting under color of state law, and the city had done nothing -- except, perhaps, failing to protect the plaintiffs from the negative consequences of the development -- that could be said to be "state action." Slip op. at 11836. Further, the court held that the failure to enforce the law was not "egregious official conduct" or an "abuse of power." Id. at 11837. "There is no evidence of a sudden change in course, malice, bias, pretext or indeed, anything more than a lack of due care on Spokane's part." Id. at 11838.
Addressing the procedural due process claim, the Ninth Circuit held that the plaintiffs did not have a protected property interest in the proper application of the city's zoning code, because the code does not contain mandatory language constraining the city's conduct:
Logan Neighborhood does not have a legitimate claim of entitlement to the denial of the Dressels' permit in accordance with the historic preservation provisions.
Id. at 11841. The Ninth Circuit summarily rejected the plaintiffs' NHPA argument because that statute does not create a private right of action. The court also rejected the plaintiffs' state law claims for lack of a substantial federal question.
Read the full decision here. Our thanks to Honolulu attorney Andy Beaman for alerting us to this case.
Posted on August 27, 2008 in ▪ 42 U.S.C. § 1983 | Civil Rights, ▪ Due process, ▪ Land use law, ▪ Property rights, ▪ Regulatory takings, ▪ Vacation rentals | Permalink | 0 Comments
Zoning Inspectors Need A Warrant
An interesting Sixth Circuit case summarized on Law of the Land by Professor Patty Salkin, Jacob v. Township of West Bloomfield, 531 F.3d 385 (6th Cir. July 3, 2008), which held that zoning inspectors are required by the Fourth Amendment's search and seizure clause must obtain a warrant if the zoning ordinance they are purporting to enforce can lead to criminal prosecution.
I won't go into the details of the decision since Professor Salkin analyzes the case here, but the case is important since many zoning ordinances are criminal or quasi-criminal in nature. The primary penalties for violation of Maui County's zoning ordinance, for example, are criminal, with the administrative enforcement process serving as an alternative -- or additional -- process.
In Jacob, the property owner was actually prosecuted criminally, but the court held that this was not the determinative factor, and that a zoning inspector is not subject to the warrant requirement only if she is conducting a search for "purely administrative purposes." Slip op. at 4. The mere threat of criminal prosecution is enough to trigger the need to obtain a warrant. The court spelled out other factors that led to the conclusion that a warrant should have been obtained:
Defendant specifically targeted his investigation at Plaintiff after receiving a complaint about the conditions of Plaintiff's property, and he continued to single-out Plaintiff for continuing intrusions as Plaintiff failed to comply with the land use ordinance. Defendant did not search Plaintiff as part of a "routine inspection that is part of a periodic or area inspection plan." Similarly, Plaintiff testified that he would frequently discover Defendant searching his property without any advance warning whatsoever; in other words, Defendant's investigations were "conducted by surprise."
Slip op. at 4-5 (citation omitted).
Posted on August 14, 2008 in ▪ Land use law, ▪ Property rights, ▪ Vacation rentals | Permalink | 0 Comments
Zoning Can Regulate Use Of Property, Not Ownership
A noteworthy case from the North Carolina Court of Appeals about the limits of Euclidean zoning. Although the decision was issued in March 2008, it seems no one else has posted on the case, so we will.
In City of Wilmington v. Hill, 657 S.E.2d 670 (N.C. Ct. App. 2008), the court struck down a local ordinance that required the owner of a garage apartment to reside either in the main residence or the apartment. When his permit to build a garage apartment was denied and he was cited for violation of the ordinance, the property owner asserted the owner-occupancy requirement was an unconstitutional regulation of his ownership of the property.
Relying on Graham Court Assoc. v. Town of Chapel Hill, 281 S.E.2d 418 (N.C. Ct. App. 1981), the court held that while the zoning power extends to regulating the use of property, it does not allow the government to control "the manner in which property is owned." In that case, the court held that the government had no legitimate reason to deny a permit to convert an apartment complex from unitary ownership to condominiums in a zoning district where multi-family residential use was an allowable use, because "[t]he change in ownership from a single owner to multiple owners did not alter the property's character as to multi-family residential use."
The Broadus court applied that rule to the owner-occupancy requirement for garage apartments, and held the requirement had "no foundation in reason and bears no substantial relation to the public health, the public morals, the public safety or the public welfare in its proper sense." The court declined to follow Anderson v. Provo City Corp., 108 P.3d 701, 706 (Utah 2005) and Kasper v. Town of Brookhaven, 142 A.D.2d 213, 220-21 (N.Y. 1988), which upheld owner-occupancy requirements from constitutional challenges. The court noted these decisions are from other jurisdictions and it had no obligation to follow them, especially in light of the Graham Court rule:
In the instant case, the property in question is located in a district that is zoned for single-family residences; however, garage apartments are permitted as an accessory use, incidental and subordinate to the principal use as a single-family residence. See WLDC § 18-179 (2005). Garage apartments also are allowed in certain multi-family districts in connection with conforming single-family residences within the district. See WLDC § 18-285 (2005). Plaintiff only is entitled to regulate the use of defendant's single-family residence with the accessory use of a garage apartment, not the ownership.
(emphasis original). Thanks to my Damon Key colleague Greg Kugle for sending this case my way.
Posted on July 25, 2008 in ▪ Due process, ▪ Land use law, ▪ Property rights, ▪ Vacation rentals | Permalink | 0 Comments | TrackBack (0)
Reply Brief in Ninth Circuit Maui Vacation Rental Appeal
Today we filed the Reply Brief (925kb pdf) in Maui Vacation Rental Association, Inc. v. County of Maui, No. 08-15251, the Ninth Circuit appeal from the Hawaii district court's dismissal of MVRA's complaint which sought to declare Maui's shut down of vacation rentals illegal.
I won't go into the details, since the Reply Brief spells out the arguments. It responds to the arguments in the County of Maui's Answering Brief, posted here. MVRA's Opening Brief, as well as links to media coverage of the case and issue, is posted here.
Posted on June 23, 2008 in ▪ Appellate law, ▪ Due process, ▪ Land use law, ▪ Property rights, ▪ Vacation rentals, ▪ Vested rights | Permalink | 0 Comments | TrackBack (0)
County of Maui's Brief in Ninth Circuit Vacation Rental Appeal
The County of Maui has filed its Answering Brief in Maui Vacation Rental Association, Inc. v. County of Maui, No. 08-15251, the Ninth Circuit appeal from the Hawaii district court's dismissal of MVRA's complaint which sought to declare Maui's shut down of vacation rentals illegal.
Our Opening Brief for MVRA is posted here, along with information about the issues in the case, which include what is necessary to plead a due process property interest, and what are elements of a claim for estoppel and vested rights under Hawaii law.
Posted on June 4, 2008 in ▪ Appellate law, ▪ Due process, ▪ Land use law, ▪ Property rights, ▪ Vacation rentals, ▪ Vested rights | Permalink | TrackBack (0)
Opening Brief Filed in Ninth Circuit Maui Vacation Rental Appeal
Today we filed the Opening_Brief (250kb pdf) in Maui Vacation Rental Association, Inc. v. County of Maui, No. 08-15251, the Ninth Circuit appeal from the Hawaii district court's dismissal of MVRA's complaint which sought to declare Maui's shut down of vacation rentals illegal.
I won't go into details of the case since the brief spells out the facts and arguments, but here are some prior posts on the case, and links to media coverage:
Posted on May 5, 2008 in ▪ Appellate law, ▪ Land use law, ▪ Property rights, ▪ Vacation rentals, ▪ Vested rights | Permalink | 0 Comments | TrackBack (0)
Order in Florida Short Term Rental Case
Here's the written order (1.8mb pdf) in Milo v. City of Venice, Case No. 2008 CA 552 SC (Mar. 17, 2008), the Florida case invalidating a municipality's restrictions on short term rentals that I posted earlier. The case arose after the city's planning director determined that the local zoning ordinance restricted short term rentals in "residential" districts.
The ruling is, of course, specific to Florida law, but there are two points worth noting:
The court held that short term rental is not a "business" use. "Indeed many rental properties, regardless of the duration of the rental term, are for profit ventures and could therefore be characterized as 'businesses.'" Slip op. at 6. The local code also permits temporary residences without limitation.
Despite the rule that courts generally should defer to an agency's interpretation of regulations it administers, the court noted the rule that "[z]oning regulations are in derogation of private ownership rights and should be construed broadly in favor of property owners absent a clear intent to the contrary." Slip op. at 5. The court held that the municipality's failure to clearly define the term of tenancies in its code was fatal.
Posted on March 21, 2008 in ▪ Due process, ▪ Property rights, ▪ Vacation rentals | Permalink | 0 Comments | TrackBack (0)
Florida Court Invalidates Short Term Rental Restrictions
According to this report, a Florida state court has invalidated a municipality's attempt to regulate short-term rentals:
Milo [the property owner] bought more than a dozen homes on or near the island beginning in 2005 and started renting them out on a daily and weekly basis, something the city thought was addressed in -- and forbidden by -- its zoning ordinance.
[The court] didn't see it that way. In his seven-page decision, he said the city zoning code lacked key definitions and relied too heavily on state statutes -- statutes that weren't adequately referenced in its zoning code -- when making its case against Milo.
City officials thought they had a solid case, based on current code language and state rules that Planning and Zoning Director Tom Slaughter said in 2006 stipulate "the duration and frequency of rental of a single-family dwelling unit within the RSF (residential, single family) is restricted to not more than three rentals in a calendar year for periods of less than 30 days or one calendar month, whichever is less."
Download the complaint here. Milo v. City of Venice, Case No. 2008 CA 552 SC (filed Jan. 11, 2008).
Associated Press: "Hawaii: Tourists Make Lousy Neighbors"
In a story titled "Hawaii: Tourists Make Lousy Neighbors," the Associated Press summarizes the "transient vacation rental" issue that's been making waves on Oahu, Maui, and Kauai. Only one county, the Big Island of Hawaii, does not actively regulate vacation rentals. Not a very encouraging headline for an economy dependent upon tourism and welcoming visitors.
On a related note, Charley Foster at Planet Kauai expands on the inversecondemnation.com link to a story about the recent legal challenge to Sedona, Arizona's ban on short term rentals. Charley adds a collection of links to case studies of how vacation rentals have been treated in other jurisdictions. Check it out here.
Posted on March 7, 2008 in ▪ Land use law, ▪ Property rights, ▪ Vacation rentals | Permalink | 0 Comments | TrackBack (0)
Legal Challenge to Sedona, Arizona Short-Term Rental Ban
As reported here, a lawsuit was filed in Arizona state courts seeking to invalidate Sedona, Arizona's prohibition on short-term rentals (less than 30 days):
Approximately 450 short-term rental properties in Sedona have been impacted by the new Ordinance making it illegal to advertise short-term rentals, and the Code prohibiting short-term rentals.
This ordinance was enacted by the city council Jan. 22 to put teeth into the Code, on the books since 1995, which made it illegal to rent properties for less than 30-days
The tail end of the article lists the claims asserted by the plaintiffs, which include vested rights, selective enforcement, and other constitutional and statutory claims.
Posted on March 6, 2008 in ▪ Land use law, ▪ Property rights, ▪ Regulatory takings, ▪ Vacation rentals, ▪ Vested rights | Permalink | 0 Comments | TrackBack (0)
Maui Vacation Rental Ban in the News
The San Francisco Chronicle posts "Maui County closes unlicensed bed and breakfasts and vacation rentals," with background on the issue and the pending Ninth Circuit appeal.
In what is becoming a divisive battle - both in court and in residential neighborhoods - the owners of the B&Bs and rental homes charge that the new leadership of Maui County, which encompasses all three islands, has broken promises made by their predecessors to allow unlicensed properties to remain open, pending an overhaul of the cumbersome licensing process.
County inspectors began their crackdown last July, when about 20 properties were ordered to close, mainly in the Upcountry and North Shore areas of Maui.
Complete story here. Check out the public comments on the story here.
Disclosure: I represent the Maui Vacation Rental Association in its Ninth Circuit appeal.
Posted on February 23, 2008 in ▪ Property rights, ▪ Vacation rentals, ▪ Vested rights | Permalink | 0 Comments | TrackBack (0)
Land Use Seminar: February 20, 2008
There's still time to register for the "Advanced Land Use and Zoning Law" seminar to be held on Wednesday, February 20, 2008 at the Ala Moana Hotel in Honolulu.
Topics include vacation rentals, big box zoning, affordable housing exactions, landowner liability for rockfalls, an environmental law update, and a summary of recent key decisions from Hawaii and other jurisdictions on land use and related issues. The faculty is comprised of my Damon Key Land Use Practice Group colleagues Greg Kugle, Mark Murakami, Robert Harris, and Noelle Catalan. I'll be covering the topic "U.S. Supreme Court, Regulatory Takings, and Eminent Domain Update."
Full agenda and registration information here. Hope you can make it -- if you do, stop by and say hello.
Posted on February 13, 2008 in ▪ Administrative law, ▪ Land use law, ▪ Property rights, ▪ Public Use | Kelo, ▪ Seminars, ▪ Vacation rentals | Permalink | 0 Comments | TrackBack (0)
Land Use Round Up
A collection of interesting stories and posts regarding land use law:
West Hawaii Today reports on a brewing dispute over the definition of land uses. When is a use of land that involves golf balls and golf clubs not a "golf course?" "Golf course comes under fire -- by definition" (free registration may be required).
UH Law Professor Carl Christensen guest blogs on PropertyProf Blog about the recent Hawaii Supreme Court decision in Office of Hawaiian Affairs v. Hous. & Community Dev. Corp. of Hawaii, No. 25570 (Jan. 31, 2008). In that case, the court held that the "Apology Resolution," whereby Congress apologized for the U.S.'s role in the overthrow of the Hawaii monarchy, has the force and effect of substantive law.
Ilya Somin posts his thoughts on the Kelo follow-up case from the Second Circuit, Goldstein v. Pataki, here. The comments that follow the post are also worth reviewing. My thoughts are here.
Wait a Second! (the blog of civil right cases from the Second Circuit) posts a summary of the Goldstein case here.
Economic development takings analysis: John Ross of the Institute for Justice posts his commentary "Restricting eminent domain no hindrance to development" about the IJ's study showing that eminent domain reform has not limited the redevelopment ability of government.
Posted on February 8, 2008 in ▪ Appellate law, ▪ Land use law, ▪ Property rights, ▪ Public Use | Kelo, ▪ Vacation rentals | Permalink | 0 Comments | TrackBack (0)
The Maui News reports "Vacation rental group planning to appeal ruling" --
The Maui Vacation Rental Association will appeal U.S. District Judge Michael Seabright's dismissal of its suit against Maui County to the 9th Circuit Court of Appeals.
President David Dantes said Wednesday that the association had retained a land use legal specialist, Robert Thomas of the Honolulu firm Damon Key Leong Kupchak Hastert, to handle the appeal.
He said that if the association wins its point and if the appeals court in California should remand the case to the Honolulu court, the association might have Maui lawyer James Fosbinder handle the renewal of the suit.
Seabright dismissed most of the association's claims but left open an option of amending the complaint to allege civil rights violations.
Complete article here. We posted about this case earlier here.
Posted on January 10, 2008 in ▪ Due process, ▪ Land use law, ▪ Property rights, ▪ Vacation rentals | Permalink | 0 Comments | TrackBack (0)
NY Times Catches a Recurring Vibe
In a story dated December 30, 2007 in the New York Times Travel section, "Not in My Tropical Backyard," Christoper Pala ties together several seemingly-unrelated threads: the Hawaii Superferry, development on Molokai, the Hokulia project on the Big Island, and expanded resort development on Oahu's North Shore. The only issue that seems to have been left out is the question of vacation rentals. The unstated thesis seems to be that these events are spurred, in large part by "backlash" against tourists and related development, but that seems like only part of the vibe -- and it may be more the "drawbridge protectionism" discussed in this post, and a perception that we're nearing capacity and things just aren't the way we remember them, than a specific anti-tourism or anti-outsider sentiment.
Posted on December 30, 2007 in ▪ Development agreements, ▪ Environmental law, ▪ Land use law, ▪ Property rights, ▪ Vacation rentals | Permalink | 0 Comments | TrackBack (0)
Federal Court Dismisses Maui Vacation Rental Due Process Claims -- Details
The US District Court for the District of Hawaii dismissed most of the counts of the Maui Vacation Rental Association's complaint against the County of Maui. The court held that MVRA had the right to bring suit on behalf of its members, but dismissed -- without leave to amend -- the substantive and procedural due process claims, the breach of contract claim, the breach of implied covenant of good faith and fair dealing claim, the equitable estoppel claim, and the illegal customs and policies claim. The court also dismissed the equal protection claim, but allowed MVRA to amend its complaint.
Here's the court's written order. (The court's summary order also mentioned a "First Amendment" claim, but no such claim is mentioned in the written order.)
County Fails to Process 90% of Applications
Vacation rentals outside of the "Hotel" zones are generally prohibited. Those vacation rentals that were not operating on their zoning lot before the prohibition must seek a permit from the County. The County, however, has a huge backlog of permit applications, some stretching back for years, and the court noted that of the 80 applications for permits, only 8 have been granted, and up to 70 were never even processed by the County. The County also advised property owners that they should not bother to apply for permits since new regulations were in the works.
County's Nonenforcement Assurances
These new regulations were chimerical and never materialized, but for years the County had an official policy of not enforcing the ban. In 2001, that policy culminated in a written agreement with MVRA, signed by the County's Planning Director, stating, among other things, that the County would not seek to enforce the prohibition against those who had filed permit applications, and agreeing they could continue to operate while their applications were under County's consideration. The Planning Director also agreed that for those who did not file applications, the County would not actively seek out violators, but would only react to complaints by third parties.
"Sorry, We Changed Our Mind"
But after a new administration (and new Planning Director) took office, the County said in effect, "we changed our mind." In July 2007, the County that all unpermitted vacation rentals -- even those who had filed an application -- would be shut down on January 1, 2008. No exceptions. MVRA then sued the County in federal court seeking declaratory and injunctive relief preventing Maui from shutting down unpermitted vacation rentals.
MVRA's Complaint
County of Maui's motion to dismiss
MVRA's memorandum in opposition
MVRA's supplemental brief in opposition
County of Maui's supplemental brief in support of motion to dismiss
More background on the lawsuit here, here (video), and here.
Court: No Permit, No Property, No Rights
The court held that the plaintiff did not possess a property interest protected from arbitrary and capricious government action because the County's laws did not require it to issue vacation rental permits. The court relied on the word "may," in the ordinances, holding that because the County could not be compelled to issue the permits, it had unfettered discretion to deny them:
The County maintains full discretion in determining whether to grant conditional permits and special use permits. A conditional permit may be recommended ... [c]onditional use permits may be issued subject to such terms and conditions deemed reasonable and necessary...
Slip op. at 27 (emphasis original). While that analysis has never made a lot of sense (shouldn't the Due Process Clause require, as a normative matter, that government not behave arbitrarily and capriciously?), a District Court can't rewrite circuit law, and the Ninth Circuit generally requires that a life, liberty, or property interest be at stake in substantive due process claims. See, e.g., Action Apartment Ass'n v. City of Santa Monica, No. 05-56533 (9th Cir. Dec. 3, 2007).
The court, however, missed the critical property interest at stake in the case. It was not the unissued vacation rental permits. Rather, the property interest possessed by the plaintiff was the County's 2001 assurances it would not enforce the vacation rental prohibition, because when the government makes assurances upon which people rely, those promises are property protected from arbitrarily and capricious backpedaling:
the consent of individual officials representing the United States cannot "estop" the United States ... it can lead to the fruition of a number of expectancies embodied in the concept of "property" expectancies that, if sufficiently important, the Government must condemn and pay for before it takes over the management of the landowner's property.
Kaiser Aetna v. United States, 444 U.S. 164, 179 (1979). It appears the court incorrectly focused on the vacation rental permits as being the only possible "property" interest at stake in the case.
Posted on December 21, 2007 in ▪ Due process, ▪ Land use law, ▪ Property rights, ▪ Vacation rentals, ▪ Vested rights | Permalink | 0 Comments | TrackBack (0)