Lambert v. City of San Francisco

Background

Claude and Micheline Lambert own the Cornell Hotel in San Francisco, which contained 24 residential units and 34 tourist units. After struggling to rent the residential units, they asked the city planning commission for permission to convert those rooms to tourist use. Two local rules mattered: the Planning Code’s rules about changing hotels and the Residential Hotel Unit Conversion and Demolition Ordinance (HCO), which requires either one-for-one replacement housing or payment toward replacement costs. The city obtained appraisals near $488,584 and $612,887 and set the fee at $600,000; the owners offered $100,000 and the commission denied the permit. The owners sued, arguing the fee violated the limits set in Nollan and Dolan, which require a connection and rough proportionality between permit conditions and public harms.

Reasoning

The central question is whether the city’s demand for replacement housing money was an unlawful condition that must be tied to the public harm it addresses and be proportionate. The California Court of Appeal affirmed the denial, saying the HCO did not drive the commission’s decision and that the commission relied on ordinary planning concerns like neighborhood compatibility, traffic, and housing availability. Justice Scalia’s dissent disputes that account, noting the record shows the commission compared the owners’ $100,000 offer to larger fees charged in other cases and treated the low offer as insufficient to mitigate housing loss. He argued the case warranted Supreme Court review to apply Nollan and Dolan.

Real world impact

Because the Supreme Court denied review, the lower-court outcome stands: the owners remain without the conversion permit and the fee dispute remains unresolved at the national level. The denial leaves in place local officials’ use of replacement-fee requirements in similar conversion cases, at least for now, and means the constitutional question raised was not decided by the high court.

Dissents or concurrances

Justice Scalia, joined by Justices Kennedy and Thomas, dissented from the denial of review and would have granted review and scheduled argument, expressing concern that state courts may be evading the Nollan-Dolan standards.