Lambert v. City of San Francisco

Background

Owners Claude and Micheline Lambert run the Cornell Hotel in San Francisco, which has 24 residential rooms and 34 tourist rooms. They applied for a city permit to convert the remaining residential units into tourist units. San Francisco’s rules require either one-to-one replacement housing or a payment toward replacement costs under a local ordinance. City appraisals put replacement costs near $600,000; petitioners offered $100,000. The planning commission denied the conversion and the California Court of Appeal affirmed, saying the replacement rule played no role in the denial.

Reasoning

The central question was whether the city’s demand for replacement housing money could be treated as an unlawful condition that the owners refused, and whether that refusal led to a taking or an unjust denial. The Supreme Court declined to review the state court’s decision. Justice Scalia’s dissent, joined by two Justices, says the record shows the commission compared the Lamperts’ offer to other cases ($10,000–$15,000 per room) and treated the low $3,226-per-room offer as insufficient, so review should have been granted to apply the court’s earlier tests (Nollan and Dolan — cases requiring a connection and rough proportionality between permit conditions and public harms).

Real world impact

Because the high court refused review, the California ruling and the city’s permit denial and replacement-fee approach remain in place for these owners. Other property owners challenging similar conversion fees may find it harder to get national review. The denial leaves unresolved whether denying permits after a property-owner refuses an unlawful money demand can itself be treated as a taking.

Dissents or concurrances

Justice Scalia would have granted review and argued the state court’s reasoning is inconsistent with federal protections; he warned local officials may evade those protections by invoking routine zoning reasons when they deny permits.