The Coalition for Fairness in SoHo and NoHo, Inc., et al. v. City of New York, New York, et al.

The New York City neighborhoods of SoHo and NoHo contain 1,636 lofts subject to a highly restrictive and outdated zoning designation limiting occupancy to City-certified artists. But few certified artists remain, leaving the mostly non-artist current residents bereft of qualified buyers. Residents seeking to transition to a standard residential zoning designation must obtain a conversion permit. But to apply for a permit, residents must pay more than $100 per square foot—hundreds of thousands of dollars per home—into a City-administered “Arts Fund.” Residents challenged the fee as an unconstitutional permit condition. Under Nollan v. California Coastal Commission, 483 U.S. 825 (1987), and Dolan v. City of Tigard, 512 U.S. 374 (1994), the Fifth Amendment’s Takings Clause limits the government’s power to demand property from permit applicants in exchange for approval. Koontz v. St. Johns River Water Management District, 570 U.S. 595 (2013), recognized that these limits extend to monetary demands. But the New York Court of Appeals refused to apply Nollan and Dolan. Conflicting with other state high courts, it held that a monetary demand triggers the unconstitutional conditions doctrine only where it is imposed in lieu of a dedication of real property. The question presented is: Does the protection the Takings Clause provides to land-use permit applicants encompass monetary demands beyond those imposed in lieu of a dedication of real property?