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Karl A. Racine
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Attorney General Racine Wins Major Victory in Federal Court for the District’s Inclusionary Zoning Program

Wednesday, February 15, 2017
Court Rejects Claims of Developer Who Challenged Affordable Housing Program

Rob Marus, Communications Director: (202) 724-5646; [email protected]
Marrisa Geller, Public Affairs Specialist: (202) 724-5448; [email protected]

WASHINGTON, D. C. – Attorney General Karl A. Racine announced today that the Office of the Attorney General (OAG) has prevailed over a developer who challenged the constitutionality of the District’s Inclusionary Zoning (IZ) program, which promotes affordable housing. The developer sought to eliminate the program rather than set aside a small amount of affordable housing in a new condominium building in Park View on which the developer made a profit.

A federal judge rejected the developer’s challenge to the constitutionality of the IZ program, holding in a summary judgment that the program does not constitute an unconstitutional government “taking” of property rights or violate the developer’s due process or equal protection rights.

This is a major victory for the IZ program, which requires that 8-10 percent of residential floor area in new developments or substantial additions to existing developments be set aside as affordable units and rented or sold to low- and moderate-income households. The District established the IZ program to increase the amount of affordable housing available and to expand its geographic distribution across the city’s neighborhoods. The program’s requirement that the affordable units must be built on-site also helps combat economic and racial segregation of housing.

“Ensuring that District residents have access to affordable housing is among our top priorities at the Office of the Attorney General,” said Attorney General Karl A. Racine. “The District’s Inclusionary Zoning program helps to ensure that people of all income levels — including our teachers and first responders — can continue to call our city home. We are committed to using all of the tools in our toolbox to protect affordable housing through this law and any other legal means at our disposal.”

In her order granting the District’s motion for summary judgment, Judge Colleen Kollar-Kotelly of the United States District Court for the District of Columbia strongly rejected the plaintiff’s claims that the IZ program constituted a regulatory taking that effectively deprives property owners of their rights. The court explained that compliance with the IZ program “certainly did not leave Plaintiff without a reasonable rate of return from its development as a whole. Quite the opposite: Plaintiff sold the unrestricted units in its development for over $6 million, earning the investors in Plaintiff’s building a 20 percent return on their investments…. Far from the ‘striking evidence’ of economic impact required, the evidence shows that the regulations at issue…did not prevent Plaintiff from earning a considerable profit from its property.”

“I want to recognize the hard work of Assistant Attorney General Andrew Eberle, who gathered the extensive evidence needed to defend the IZ program and did an excellent job briefing these complicated issues, as well as all the other OAG staff who worked to support this litigation over the past four years,” Attorney General Racine said.

Attorney General Racine also expressed thanks for the continued hard work of the District’s Department of Housing and Community Development (DHCD), the Department of Consumer and Regulatory Affairs (DCRA), and the Office of Planning in administrating the District’s Inclusionary Zoning program.

A copy of the Judge Kollar-Kotelly’s Memorandum Opinion is attached.