Amicus Brief: Coalition for Fairness in SoHo & NoHo v. City of New York

A group of property owners called the Coalition for Fairness in Soho & Noho is challenging a New York City zoning ordinance that requires payment into an “Arts Fund” to convert artist-restricted units to ordinary residential use. The artist-restricted units are part of the Joint Living-Work Quarters for Artists program. After manufacturing left SoHo and NoHo decades ago, there were many large lofts that artists took over and worked in. Wanting to keep some sort of artistic vibe to the neighborhoods, the city created a system of zoning variances to allow artists to use and live in the spaces.

The arts-fund fee was challenged as a classic exaction that requires a property owner to do something or pay something as a condition of permitting. Such fees are very common in land-use regulation, but the Supreme Court has held many times that exactions must be related to and roughly proportional to the purpose of the fee. For example, a new large residential unit might create parking problems, so an exaction can be charged that mitigates those problems.

The New York Appellate Division first held the fee unconstitutional, but the New York Court of Appeals reversed, adopting a categorical rule that purely monetary exactions are exempt from scrutiny altogether. Now on petition for Supreme Court review, the Manhattan Institute has joined with the National Association of Realtors, the New York State Association of Realtors, the National Association of Home Builders, and the National Apartment Association on a brief urging the Court to hear the case.  We argue that the lower court's decision is both wrong and dangerous. Charging a large fee—sometimes as much as $250,000—to property owners who want to acquire a permit is a serious imposition on property rights. If allowed to stand, governments will be able to creatively raise money by charging property owners pure monetary exactions, and many governments can be expected to abuse that power. The Court should stand up for property rights.

Ilya Shapiro is a senior fellow and director of Constitutional Studies at the Manhattan Institute. Follow him on Twitter here.

Trevor Burrus is a legal policy fellow at the Manhattan Institute.