2910 Ga. Ave. LLC v. Dist. of Columbia

234 F.Supp.3d 281

2910 GEORGIA AVENUE LLC, Plaintiff,

v.DISTRICT OF COLUMBIA, et al., Defendants.

Civil Action No. 12–1993 (CKK)

United States District Court, District of Columbia.

Filed February 14, 2017

Matthew Michael Wright, James H. Hulme, Arent Fox LLP, Washington, DC, for Plaintiff.

Andrew Carl Eberle, Edward Paul Henneberry, Jr., William D. Burk, Office for the Attorney General for the District of Columbia, Washington, DC, for Defendants.

MEMORANDUM OPINION

COLLEEN KOLLAR–KOTELLY, UNITED STATES DISTRICT JUDGE

Plaintiff 2910 Georgia Avenue LLC filed suit against the District of Columbia, Mayor Muriel Bowser, and Polly Donaldson in her official capacity as Director of the Department of Housing and Community Development ("DHCD"),¹ alleging that the application of the District's Inclusionary Zoning Program ("IZ Program") to the development of a 22–unit condominium building near Howard University constituted an unconstitutional taking and violated Plaintiff's due process and equal protection rights. Presently before the Court are Defendants' [67] Renewed Motion for Summary Judgment and Plaintiff's [68] Motion for Summary Judgment.

Upon consideration of the pleadings,² the relevant legal authorities, and the record for the purposes of these motions, the Court finds that Defendants are entitled to summary judgment on each of Plaintiff's claims. In so finding, the Court does not intend to minimize Plaintiff's legitimate grievances with the District's administration of the IZ Program, or to suggest that the District acted perfectly at all times. The Court merely concludes that at no point did the District's conduct rise to the level of a violation of the United States Constitution.

First, the Court finds that the economic effect of the challenged regulations on Plaintiff's condominium building is not sufficient to establish a takings claim as a matter of law. Second, Plaintiff has not established an equal protection claim because it has not demonstrated that it was treated differently by the District than any other developer subject to the IZ Program. Third, Plaintiff has not established a substantive due process claim because the conduct of the District at issue demonstrates, at most, confusion or negligence; it does not approach the level of grave unfairness or deliberate flouting of the law that is required for such a claim. Finally, Plaintiff's procedural due process claim also fails because Plaintiff has not established that the IZ Program deprived Plaintiff of any protected property interests without sufficient process of law. Accordingly, Defendants' motion for summary judgment is GRANTED and Plaintiff's motion is DENIED.

I. BACKGROUND

A. The Basics of the District of Columbia IZ Program

As relevant to the parties' dispute, the District of Columbia's IZ Program requires that 8–10 percent of the gross floor area of new residential developments (or substantial additions to existing developments) in the District be used for sale or lease to eligible low—and moderate-income households at certain maximum price levels. D.C. Mun. Regs. tit. 11, § 2603.³ The affordable units created by the program are referred to as inclusionary units ("IZ Units"). Id. § 2601.1. The District enacted the IZ Program in order to "increas[e] the amount and expand[ ] the geographic distribution of adequate, affordable housing available to current and future residents."Id. § 2600.1. Under the IZ Program, "no building permit shall be issued" unless the owner of the development subject to the IZ Program "records a covenant in the land records of the District of Columbia that binds all persons with a property interest in any or all of the [property] to construct and reserve the number of inclusionary units." D.C. Code § 6–1041.05(a) ("IZ Covenant").

B. The History of the IZ Program Rulemaking

The IZ Program was established by the District of Columbia Zoning Commission on August 25, 2006. Pl.'s Stmt. of Undisputed Material Facts, ECF No. 68–2 ("Pl.'s Stmt."), ¶ 3. The Zoning Commission delegated responsibility for developing the IZ Program to the Council of the District of Columbia ("D.C. Council") and the Mayor, who subsequently delegated that authority to the Deputy Mayor for Planning and Economic Development ("Deputy Mayor"). Id. ¶¶ 3, 5; Pl.'s Mot., Ex. 3, ECF No. 68–5 (Delegation of Authority—Inclusionary Zoning Implementation Act of 2006). The program was established pursuant to statutory authority set forth in section 107 of the Inclusionary Zoning Implementation Amendment Act of 2006. Id. ¶ 4.

Although on the books as of 2006, the IZ Program was not implemented until certain rules and regulations were passed regarding its implementation. On April 11, 2008, the District, through the Deputy Mayor, issued a Notice of Proposed Rulemaking for regulations that would implement and establish the procedures for the IZ Program. Id. ¶ 8; Pl.'s Mot., Ex. 6, ECF No. 68–8 (Notice of Proposed Rulemaking for Chapter 22 of Title 14 of the District of Columbia Municipal Regulations, entitled "Inclusionary Zoning Implementation"). Among other things, these regulations established the process and the requirements for obtaining building permits for properties subject to the IZ Program. Pl.'s Stmt. ¶¶ 8, 26; Pl.'s Mot., Ex. 6. The Notice of Proposed Rulemaking stated that "[f]inal rulemaking action shall be taken in not less than sixty (60) days from the date of publication of this notice in the D.C. Register ." Pl.'s Mot., Ex. 6 at 1. It also stated that the "[t]he Deputy Mayor [ ] intends that the final rules shall not become effective until ninety (90) days after publication of the Notice of Final Rulemaking in the D.C. Register in order to allow a transition period between publication and implementation." Id.

In the months after the Notice of Proposed Rulemaking was published, the District began to express its concern, in a series of published resolutions, that the IZ Program was not being implemented quickly enough. On October 21, 2008, the D.C. Council passed Resolution 17–848, which referenced the April 11, 2008 Notice of Proposed Rulemaking and noted that "final rulemaking, including the maximum rent and purchase price schedule [for the IZ Program] has not been published. Because final regulations have not been promulgated ... and the maximum rent and purchase price schedule has not been published ... the Inclusionary Zoning Program has not been implemented." Pl.'s Mot., Ex. 11, ECF No. 68–13 (D.C. Council Resolution 17–848). This resolution also stated that "[c]ontinuing delays [in implementing the IZ Program] have resulted in the loss of affordable mixed-income units being included in many residential developments" and that "[e]mergency legislation is need[ed] to provide that the final rulemaking and publication requirements for the Inclusionary Zoning Program be met expeditiously." Id.

On November 18, 2008, the D.C. Council passed Resolution 17–871, again stating that final rulemaking had not been published and again declaring an emergency as to the need to publish final rulemaking expeditiously so as to not lose further affordable housing in new developments. Pl.'s Mot., Ex. 12, ECF No. 68–14 (D.C. Council Resolution 17–871). This resolution also stated that "[t]he Administration has stated that because of significant changes that will be made to the proposed rulemaking based on comments received since the initial notice of proposed rulemaking, a revised notice of proposed rulemaking will be published for public comment." Id. It also stated that "[t]he Administration has further stated that 90 days are needed for District agencies to finalize plans for the implementation of the rules after the notice of final rulemaking is published." Id.

As promised, a Revised Notice of Proposed Rulemaking was then published on December 26, 2008, incorporating certain changes to the proposed rules. Pl.'s Mot., Ex. 13, ECF No. 68–15 (Revised Notice of Proposed Rulemaking). Of some note, the Revised Notice stated that "[t]he Deputy Mayor ... intends that the final rules shall not become effective until sixty (60) days after the publication of the Notice of Final Rulemaking in the D.C. Register ," which was thirty days less than the 90–day phase-in period envisioned in the initial proposed rulemaking. Id. at 1. The Revised Notice also stated that it replaced the initial notice, and that "[f]inal rulemaking action shall be taken in not less than thirty (30) days from the date of publication of this notice." Id.

By February 3, 2009, final rulemaking still had not been published, and the D.C. Council adopted another emergency resolution regarding the need for final rulemaking. Pl.'s Mot., Ex. 14, ECF No. 68–16 (D.C. Council Resolution 18–22). This resolution referenced the same emergency need for affordable housing as the emergency resolutions that predated it, and again noted that "[t]he Administration ... stated that 90 days were needed for District Agencies to finalize plans for the implementation of the rules after the notice of final rulemaking is published." Id. at 1.

The Notice of Final Rulemaking for these IZ Program regulations was then published on May 15, 2009. Pl.'s Stmt. ¶ 20; Pl.'s Mot., Ex. 18, ECF No. 68–20 (Notice of Final Rulemaking). Plaintiff contends that when this Notice was published, it was "not known, clear, or stated" when the rules were to become effective and applicable. Pl.'s Stmt. ¶ 20. As discussed in more detail later in this Memorandum Opinion, a number of Plaintiff's legal arguments are premised on this claim. This claim is not, however, supported by the record, and the Court rejects it at the outset. The Notice stated that "[t]hese final rules shall become effective on the date of publication of this notice in the D.C. Register , but ... shall not become applicable until ninety (90) days after such publication or the date on which the final Maximum Rent and Price Schedule is published in the D.C. Register , whichever is later." Pl.'s Mot., Ex....