Opinion
Review Granted Aug. 29, 1985.
Opinion on pages 1-74 omitted.
REVIEWS GRANTED
[215 Cal.Rptr. 82]Michael Heumann, Sr. Atty., and Joel Martin Levy, Staff Atty., Santa Monica, for defendant and appellant.
Latham & Watkins and Stephen L. Jones and Alex M. Johnson, Los Angeles, for plaintiffs and respondents.
KLEIN, Presiding Justice.
Defendant and appellant Santa Monica Rent Control Board (the Board) appeals from a judgment granting a writ of mandate ordering the Board to permit plaintiffs and respondents Scarborough, N.V. and Westport, N.V. (Scarborough) to proceed with the demolition and development of its property without a removal permit as required by the Santa Monica Rent Control Charter Amendment (RCCA), and denied by the Board. (Santa Monica Charter, art. XVIII, § 1803, subd. (t).)
Unless otherwise indicated, all section references are to the Santa Monica City Charter, article XVIII.
The trial court issued the writ based on its determination that the permit requirement unlawfully imposed a new condition upon Scarborough's tentative map, which map had been approved prior to the adoption of the RCCA.
Because the RCCA's requirement of a removal permit is not preempted by the Map Act and does not constitute an unlawful imposition of a new condition, the requirement is a proper exercise of the City of Santa Monica's independent police power. Therefore, the judgment is reversed.
FACTS AND PROCEDURAL HISTORY
Scarborough is one of several apartment building owners challenging the Board's application of section 1803, subdivision (t) of the RCCA to conversion of rental apartments to condominiums. Appellate review of these actions was stayed pending resolution by the California Supreme Court of two related cases which were deemed to be dispositive of many pivotal issues. These cases are Santa Monica Pines, Ltd. v. Rent Control Board (1984) 35 Cal.3d 858, 201 Cal.Rptr. 593, 679 P.2d 27 and Nash v. City of Santa Monica (1984) 37 Cal.3d 97, 207 Cal.Rptr. 285, 688 P.2d 894, appeal dismissed (1985) 470 U.S. 1046, 105 S.Ct. 1740, 84 L.Ed.2d 807. The Supreme Court has now spoken, and we are bound by its decisions. (Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 455, 20 Cal.Rptr. 321, 369 P.2d 937.) Therefore, this case is reviewed in light of these most recent decisions.
In January 1979, the Planning Commission of the City of Santa Monica (Planning Commission) approved Scarborough's tentative map for the construction of 45 condominium units on Scarborough's property located at the corner of Ocean Avenue and Palisades Street (Ocean Avenue site). At the time of tentative map approval, 22 apartment rental units existed on the property. Scarborough proposed to raze the 22 units, replace them with 45 new condominium units and build 28 replacement rental units on another site.
In April 1979, the Santa Monica electorate adopted the RCCA to the City of Santa Monica's Charter. The RCCA directs that no controlled rental unit be removed or demolished without a permit from the Board. ( § 1803, subd. (t).)
Section 1803, subdivision (t) provides as follows: "(t) REMOVAL OF CONTROLLED RENTAL UNIT FROM RENTAL HOUSING MARKET: Any landlord who desires to remove a controlled rental unit from the rental housing market by demolition, conversion or other means is required to obtain a permit from the Board prior to such removal from the rental housing market in accordance with the rules and regulations promulgated by the Board. In order to approve such a permit, the Board is required to make each of the following findings; [p ] (1) That the controlled rental unit is not occupied by a person or family of very low income, low income or moderate income. [p ] (2) That the rent of the controlled rental unit is not at a level affordable by a person or family of very low income, low income, or moderate income. [p] (3) That the removal of the controlled rental unit will not adversely affect the supply of housing in the City of Santa Monica. [p] (4) That the landlord cannot make a fair return on investment by retaining the controlled rental unit. [p] Notwithstanding the foregoing provisions of this subsection, the Board may approve such a permit: [p] (1) If the Board finds that the controlled rental unit is uninhabitable and is incapable of being made habitable in an economically feasible manner, or [p] (2) If the permit is being sought so that the property may be developed with multifamily dwelling units and the permit applicant agrees as a condition of approval that the units will not be exempt from the provisions of this Article pursuant to Section 1801(c) and that at least fifteen (15) per cent of the controlled rental units to be built on the site will be at rents affordable by persons of low income." (Italics added.)
[215 Cal.Rptr. 83]The RCCA specifies the Board may issue a removal permit only when four factual findings are made, i.e., the unit is not occupied by moderate or low income renters, the rent is not affordable by such renters, the removal will not adversely affect the housing supply, and the landlord cannot make a fair return on investment.
The RCCA also provides, notwithstanding the above, the Board may approve such a permit if it finds the rental unit is uninhabitable and cannot be made habitable in an economically feasible manner, or, where multifamily units are involved, if the applicant agrees the units will be subject to the RCCA and at least 15 percent of the controlled rental units to be built on the site will be at rents affordable by low income renters.
In February 1980, Scarborough filed an application with the Board for a permit to remove the controlled rental units at the Ocean Avenue site, based partly on Scarborough's plan to build 28 replacement units on another site. Scarborough filed a second application in June 1980 alleging the existing units were uninhabitable and could not be made habitable in an economically feasible manner.
Following a public hearing in August 1980, the Board unanimously denied the first application because Scarborough proposed to build the replacement units on another site, and the second one because it found the units to be habitable.
Scarborough then filed a petition for a writ of mandate with the trial court. (Code Civ.Proc., § 1094.5.) The trial court granted the petition and ordered the Board to vacate its denial of Scarborough's request for a removal permit and to issue a resolution that no removal permit was required for Scarborough to proceed. The trial court concluded the application of the removal permit requirement amounted to the unlawful imposition of a new condition after tentative map approval, relying on Youngblood v. Board of Supervisors (1978) 22 Cal.3d 644, 150 Cal.Rptr. 242, 586 P.2d 556 and El Patio v. Permanent Rent Control Bd. (1980) 110 Cal.App.3d 915, 168 Cal.Rptr. 276.
CONTENTIONS
The Board contends the trial court erred in deciding that application of the removal permit requirement to the rental units on Scarborough's Ocean Avenue site resulted in the unlawful imposition of a new condition.
DISCUSSION
1. The State Subdivision Map Act (Map Act) (Govt.Code, § 66410, et seq.) does not preempt the application of the subsequently adopted RCCA's removal permit requirement.
At issue here is whether approval by the Planning Commission of Scarborough's tentative map for construction of condominiums on property containing apartment rental units precludes application of the subsequently adopted RCCA which requires a removal permit before demolition of the existing units can occur.
[215 Cal.Rptr. 84]Scarborough asserts the Planning Commission's approval is binding, and any attempt by the Board to impose additional requirements is preempted by the Map Act, in that the RCCA requirement is an effort to enforce changed planning concepts in violation of the Map Act. Scarborough cites to Santa Monica Pines wherein it states, "The map act is primarily concerned with land use planning issues; ..." (Santa Monica Pines, Ltd. v. Rent Control Board, supra, 35 Cal.3d at p. 866, fn. 6, 20 Cal.Rptr. 593, 679 P.2d 27.)
Santa Monica Pines dealt with another fact situation coming in conflict with the same RCCA removal permit requirement. There, the Board denied the building owner a vested rights exemption from obtaining a removal permit even though the RCCA was adopted after the owner had received tentative subdivision map approval to convert property to condominiums. (Id., at pp. 862-863, 201 Cal.Rptr. 593, 679 P.2d 27.) The developers argued, inter alia, that the Map Act preempts Santa Monica's attempt to regulate condominium conversions in connection with its rent control law.
A development corporation had contracted with the building owner to purchase the property under an escrow agreement conditioned on Santa Monica's "final approval" of conversion to condominiums. (Santa Monica Pines, Ltd. v. Rent Control Board, supra, 35 Cal.3d at p. 861, fn. 1, 201 Cal.Rptr. 593, 679 P.2d 27.) Both the owners and developers were appellants in the case. The appellants are collectively referred to as "developers" herein.
In rejecting the preemption argument, the Santa Monica Pines court noted that while some of the Map Act's provisions pertain to condominium conversion, none of the provisions directly conflicts with Santa Monica's condominium conversion removal permit requirements. It declared "[t]he permit requirement's purpose of effectuating the city's rent control law appears distinct from the purposes of the state legislation (which are, fundamentally, to control the design and improvement of subdivisions and to protect the buying public from exploitation [citation] ), and we do not discern in the legislation any purpose with which the removal permit requirement would 'materially interfere.' " (Id., at pp. 868-869, 201 Cal.Rptr. 593, 679 P.2d 27.)
The Santa Monica Pines court concluded that the removal permit requirement is crucial to the success of the rent control law, and held "[t]he restriction on removal from the rental housing market through condominium conversion, ..., with its evident, independent police power source and purpose, is therefore not preempted by the Subdivision Map Act." (Id., at p. 869, 201 Cal.Rptr. 593, 679 P.2d 27, fn. omitted.)
2. "On the site" replacement requirement provision valid.
Scarborough may have been issued a removal permit, were it willing to comply with the on the site replacement requirement. However, it chose to resist the RCCA, and attack it, asserting that by requiring the replacement units to be on the site, the City of Santa Monica "is attempting to impose nothing more than belated changes in its local planning--the reservation of certain areas for rental housing--on an already approved tenative tract map." Santa Monica Pines holds a city may engage in local land use regulation and its removal permit requirement is not preempted by the Map Act.
See also Birkenfeld v. City of Berkeley (1976) 17 Cal.3d 129, 130 Cal.Rptr. 465, 550 P.2d 1001; Fisher v. City of Berkeley (1984) 37 Cal.3d 644, 209 Cal.Rptr. 682, 693 P.2d 261; Nash v. City of Santa Monica, supra, 37 Cal.3d at p. 109, 207 Cal.Rptr. 285, 688 P.2d 894; People v. H & H Properties (1984) 154 Cal.App.3d 894, 201 Cal.Rptr. 687, all of which sustain properly drafted local rent control legislation as a valid exercise of a government's police power.
The "Statement of Purpose" of the RCCA sets forth that condominium conversions especially endanger "the poor, minorities, students, young families, and senior citizens," and through its rent control measures, including the removal permit process, the RCCA "attempts to provide reasonable protection to tenants." ( § 1800.)
Pursuant to the RCCA, a permit may be granted provided replacement units will be built, but at least some of the replacement units must be on the site from which the [215 Cal.Rptr. 85] rental units are being removed. Section 1803, subdivision (t)(2) spells out the requirement that at least 15 percent of the controlled rental units to be built "on the site" will be affordable by persons of low income.
The removal permit requirement is considered crucial to the success of rent control in preventing conversion of rental units to condominiums. (Nash v. City of Santa Monica, supra, 37 Cal.3d at p. 104, 207 Cal.Rptr. 285, 688 P.2d 894; Santa Monica Pines, Ltd. v. Rent Control Board, supra, 35 Cal.3d at p. 868, 201 Cal.Rptr. 593, 679 P.2d 27.) Accompanying tenant displacement also inflicts particular hardship on elderly, low and moderate income, and disabled tenants, i.e., those least able to bear it, and is a factor in support of rent control and the on the site requirement. (See Soloway, Condos, Co-ops & Conversions: For Local Officials (Nov.1979) State of California Office of Planning & Research; Day & Fogel, The Condominium Crisis: A Problem Unresolved (1981) 21 Urban Law Annual 3, 13-14; Note, Municipal Regulation of Condominium Conversions in California (1979) 53 So.Cal.L.Rev. 225, 229-230; Cal.Assem.Comm. on Aging, Interim Hearings, "Condominium Conversions & the Elderly Renter" (1978) N. 732.)
Congress has also acknowledged the harsh impact of condominium conversion on low and moderate income, elderly, and handicapped tenants in its passage of the Condominium and Cooperative Abuse Relief Act. (15 U.S.C., § 3601, et seq.). This act discourages federal lending to condominium conversion projects where low and moderate income and elderly tenants are involved. (15 U.S.C., § 3602.)
The precise on the site issue of section 1803, subdivision (t)(2) was not before the Supreme Court in Santa Monica Pines. However, Santa Monica Pines involved an overall interpretation of section 1803, subdivision (t), and held the section was not preempted by the Map Act. The on the site requirement is a valid and integral part of both section 1803, subdivision (t) and the entire RCCA, serving to counter the severe displacement burdens on low and moderate income, disabled, older and minority tenants caused by condominium conversion. Therefore, this aspect of the removal permit requirement, as well as the requirement generally, is not preempted by the Map Act.
Scarborough does not challenge the constitutionality of the on the site requirement. We therefore do not address this issue. (Nash v. City of Santa Monica, supra, 37 Cal.3d at p. 109, 207 Cal.Rptr. 285, 688 P.2d 894, held § 1803, subd. (t) a constitutional land use regulation.)
3. No unlawful imposition of a new condition resulted here.
Scarborough persists in its argument that Youngblood v. Board of Supervisors, supra, 22 Cal.3d 644, 150 Cal.Rptr. 242, 586 P.2d 556, as interpreted in El Patio v. Permanent Rent Control Board, supra, 110 Cal.App.3d 915, 168 Cal.Rptr. 276, and Santa Monica Pines, Ltd. mandates we find that requiring a removal permit would amount to an unlawful imposition of a new condition after Scarborough had already received tentative map approval prior to the adoption of the RCCA.
Youngblood involved new residential construction in a major subdivision. The court held a county could not deny Youngblood a final map because it adopted a two acre building lot requirement after approving a tentative map providing for one acre lots, a land use permitted by the then existing zoning and general plan. The developer had satisfied the conditions placed on the tentative map prior to the enactment of the new general plan. (Youngblood v. Board of Supervisors, supra, 22 Cal.3d at pp. 655-656, 150 Cal.Rptr. 242, 586 P.2d 556.)
Youngblood deals exclusively with the mapping process, the purpose of which is [215 Cal.Rptr. 86] distinct from the removal permit requirement, the latter being directed toward implementing the rent control law. (Santa Monica Pines, Ltd. v. Rent Control Board, supra, 35 Cal.3d at pp. 868-869, 201 Cal.Rptr. 593, 679 P.2d 27.) The grant or denial of a removal permit by the Board is separate from the grant or denial of a final map by the Planning Commission. As noted in Santa Monica Pines, approval of a tentative map does not imply removal of rental units was also approved. (Id., at p. 866, 201 Cal.Rptr. 593, 679 P.2d 27, fn. 6.)
The Santa Monica Pines court explained there was no dispute over the Santa Monica Pines developers' "authority to subdivide their apartment building as provided in the approved tentative map, that is, to sell fee interests in single apartment units." (Santa Monica Pines, Ltd. v. Rent Control Board, supra, 35 Cal.3d at p. 865, 201 Cal.Rptr. 593, 679 P.2d 27.) The court stated "[t]he ordinance's requirement of a removal permit is not a 'new condition' imposed on a subdivision in violation of Youngblood; it is not a restriction on the right to subdivide at all. Nor did approval of the tentative subdivision map imply that removal of units from the rental market was also 'approved.' The map act is primarily concerned with land use planning issues; it governs condominium conversions only to the extent of ensuring tenants' rights to purchase their apartments. The act leaves other aspects of conversion regulation to the local police power." (Id., at p. 866, fn. 6, 201 Cal.Rptr. 593, 679 P.2d 27.)
Scarborough's compliance with the requirements of the subdivision process assured final map approval, but did not excuse compliance with the removal permit process.
Indeed, Scarborough received and recorded final map approval, thus completing the subdivision approval process mandated by the Map Act, before the trial court considered the case.
Because final map approval is not at issue here, Youngblood is not relevant.
Rather, the facts here more closely resemble those in Hazon-Iny Development, Inc. v. City of Santa Monica (1982) 128 Cal.App.3d 1, 179 Cal.Rptr. 860. There, the developers obtained tentative map approval for conversion of rental apartments to condominiums prior to adoption of the RCCA. In each case the Planning Commission approved fewer condominium units than the number of existing rental units. (Id., at p. 4, 179 Cal.Rptr. 860.) After the adoption of the RCCA, the developers applied for building permits to do the work involved in reducing the number of units under a vested rights theory. Their vested rights claims were denied. The building permits were thereafter denied because they did not have removal permits approved by the Board. (Id., at pp. 6-7, 179 Cal.Rptr. 860.)
Hazon-Iny was one of four developers whose appeals were consolidated in that case.
The trial court denied the developers' petitions for writs of mandate to compel the Planning Commission to issue the building permits, or in the case of developer Hazon-Iny, to reinstate the previously issued permit.
On appeal, the Hazon-Iny court distinguished Youngblood and El Patio, cited by the trial court here as "controlling" and upon which the developers in Hazon-Iny also relied, noting that in those cases, no building permit was required. The fact situation in Hazon-Iny required removal and building permits, which permits are independent of the subdivision process. (Hazon-Iny Development, Inc. v. City of Santa Monica, supra, 128 Cal.App.3d at p. 10, 179 Cal.Rptr. 860.)
Referring to Youngblood and El Patio, the Hazon-Iny court said, "[b]oth cases are distinguishable from the facts before us. While it is true that the removal permit requirement did not exist when the tentative maps were approved, it is also true that the conditions of the tentative maps required reduction in the number of units. [215 Cal.Rptr. 87] These reductions necessitated building permits, and were, therefore, subject to the requirement under general law and Building Code section 301(a) [ that appellants comply with laws in effect at the time of issuance of the building permit." (Hazon-Iny Development, Inc. v. City of Santa Monica, supra, at p. 9, 179 Cal.Rptr. 860, italics added.) The court then held "the removal permit requirement was not an 'additional' condition but rather one which conceptually was included in the original conditions of the tentative map." (Id., at p. 11, 179 Cal.Rptr. 860.)
Santa Monica Building Code section 301(a), 1979 edition. See also Avco Community Developers, Inc. v. South Coast Regional Com. (1977) 17 Cal.3d 785, 132 Cal.Rptr. 386, 553 P.2d 546 (cert. den. and app. dismd. (1977) 429 U.S. 1083, 97 S.Ct. 1089, 51 L.Ed.2d 529) which held a developer must comply with the laws in effect at the time a building permit is to be issued.
The facts here are quite similar. Scarborough's approved tentative map required the demolition of the existing rental units and construction of a new building. Santa Monica law at all times pertinent required Scarborough to obtain a building permit to do each of these acts. Since the project for which Scarborough received tentative map approval required Scarborough to obtain building permits, the building permits were "conceptually" included in Scarborough's tentative map approval. Scarborough, just as the developers in Hazon-Iny, is relying on a pre-RCCA tentative tract map, the terms of which require building permits and thus also require compliance with all laws pertinent to the project, including the subsequently adopted RCCA.
Santa Monica Municipal Code (SMMC) section 8103, adopted January 25, 1977, designated the Uniform Building Code, 1976 edition and the Uniform Building Code Standards as the 1976 edition of the Building Code of the City of Santa Monica. Section 301(a) of that Building Code provides that no building or other structure may be constructed or demolished in the City without such a permit. On September 10, 1980 SMMC section 8103 was reenacted as amended to designate the 1979 edition of the Uniform Building Code Standards as the City's Building Code.
Section 302(a) of the 1976 Building Code which was in effect on the date of Scarborough's tentative map approval provided in pertinent part: "The application, plans, and specifications filed by an applicant for a permit shall be checked by the Building Official. Such plans may be reviewed by other departments of the city to check compliance with the laws and ordinances under their jurisdiction. If the Building Official is satisfied that the work described in an application for permit and the plans filed therewith conform to the requirements of this Code and other pertinent laws and ordinances, and that the fee specified in Section 303(a) has beenpaid, he shall issue a permit therefor to the applicant."
Requiring Scarborough to obtain a removal permit is not an unlawful imposition of a new condition after tentative tract map approval.
DISPOSITION
The judgment is reversed and the trial court is directed to enter a judgment denying Scarborough's petition for extraordinary writ.
LUI and DANIELSON, JJ., concur.
The language in this section has since been slightly modified.
The later version, substantially unchanged, is renumbered section 303.
Santa Monica Municipal Code enacted on July 29, 1979, provides: "On and after April 18, 1979, no department, commission, board, or agency of the City shall accept for processing or issue any new permits or applications to demolish or otherwise remove a controlled rental unit or to convert a controlled rental unit to residential use unless such City Permit or application is conditioned on securing a permit under Section 1803(t) from the Rent Control Board."
Section 4608 was reenacted without substantive change as Santa Monica Municipal Code section 4603 on April 14, 1980.