18 ATTACHMENT 1-4; 6-9 - Laserfiche WebLink

For cities, there is now only one relevant exception to Costa Ilawkins. which does not apply when "[tIhe owner has otherwise agreed by contract with a public entity in consideration for a direct financial contribution or any other forms of assistance specified in [density bonus law, commencing with Government Code Section 65915]."'4 In the absence of financial assistance or another incentive, it is questionable whether a voluntary agreement to provide rent- controlled units could be enforced.75 Inclusionary Ordinances as Rent and Price Controls. The Painter court's characterization of inclusionary zoning as a rent control could result in the characterization of controls on ownership units as price controls. If the courts begin to classify inclusionary ordinances as price controls, a different set of constitutional standards would prevail. The issue was raised in Napa but not resolved. A price control is considered constitutional so long as it is not "confiscatory, i.e., ... fails to permit a landlord a fair rate of return."3t' However, prices for inclusionary units are not based on "fair return" concepts but on prices that are affordable to moderate and lower income families. The formulas used to set affordable prices have nothing to do with land costs, prices of market- rate units, financing, construction costs, or other factors that affect the developer's rate of return. ''Civil Code Section 1954.52(6). While it would normally be assumed that a developer could agree to provide affordable rental housing as part of a development agreement,communities may want to include a term in their development agreements expressly stating that developer has agreed to limit rents in exchange for the regulatory incentives included in the development agreement. The case also raises the question of the validity of existing agreements requiring the provision of rent- controlled housing when no city incentives were provided. We will attempt to discuss this issue in our panel discussion,but there has not been time to address this issue in this paper. JB Santa Monica Beach, Ltd. v. Superior Court, [P 99Si l3 0000?I I.7'_037'_3 R 7 2000