The lower court rejected Lambert's theory. Also, the court rejected the argument that by restricting the residential property's use, the HCO effected a taking in violation of the Fifth Amendment to the U.S. Constitution and Article I, Section 19 of the California Constitution. The court further stated that cities and counties are not required to reimburse individuals for losses due to zoning changes. In such cases, a taking occurs only if the application of the general zoning law to the particular property does not substantially advance legitimate state interests or denies an owner economically viable use of his land. A zoning ordinance that reduces the land's economic value is not a denial of economically viable use of the land.
Takings occur when a regulation prohibits economically beneficial uses of land.
Zoning laws that only reduce the economic viability of the affected property are not takings. San Francisco's refusal to issue the permit thus deprived him of nothing. 97 Daily Journal D.A.R. at 12190. The court stated that where, as here, no taking occurred, its task is to determine whether substantial evidence supports the administrative agency's findings and whether the findings support the agency's decision. Here, the evidence supported the planning commission's findings and decision.