Court Opinion

ID: 9789215
Source: CourtListenerOpinion
Date Created: 2023-08-31 01:30:38.779186+00
Date Added: 2024-06-11T07:35:12.107203
License: Public Domain

BROWN, J., Dissenting.
Americans are a diverse group of hard-working, confident, and creative people molded into a nation not by common ethnic identity, cultural legacy, or history; rather, Americans have been united by a dream—a dream of freedom, a vision of how free people might live. The dream has a history. The idea that property ownership is the essential prerequisite of liberty has long been “a fundamental tenet of Anglo-American constitutional thought.” (Ely, The Guardian of Every Other Right (1998) p. 43.) “Indeed, the framers saw property ownership as a buffer protecting individuals from government coercion. Arbitrary redistribution of property destroyed liberty, and thus the framers hoped to restrain attacks on property rights.” (Ibid.) “Property must be secured, or liberty cannot exist” (Adams, A *692Balanced Government (1790) in Discourses on Davila (1805), reprinted in 6 The Works of John Adams (1851 ed.) p. 280), because property and liberty are, upon examination, one and the same thing.
Private property is in essence a cluster of rights inuring to the benefit of the owner, freely exchangeable in accordance with the terms of private agreements, and recognized and protected by common consent. In the case of real property, this cluster of rights includes the right to exclude persons from certain physical space. In the case of intellectual property, it may include the right to employ a valuable method or process to the exclusion of others. In other words, private property represents zones of individual sovereignty—regions of autonomy within which we make our own choices.
But private property, already an endangered species in California, is now entirely extinct in San Francisco. The City and County of San Francisco has implemented a neo-feudal regime where the nominal owner of property must use that property according to the. preferences of the majorities that prevail in the political process—or, worse, the political powerbrokers who often control the government independently of majoritarian preferences. Thus, “the lamb [has been] committed to the custody of the wolf.” (6 The Works of John Adams, supra, at p. 280.) San Francisco has redefined the American dream. Where once government was closely constrained to increase the freedom of individuals, now property ownership is closely constrained to increase the power of government. Where once government was a necessary evil because it protected private property, now private property is a necessary evil because it funds government programs.
I. The San Francisco Planning Commission’s Zoning Decision Restricting Plaintiffs’ Ability to Convert Their Hotel to Tourist Use Constitutes a Taking Requiring Compensation
The City and County of San Francisco (the City), like other cities, seeks to provide affordable housing to its low-income residents. The most egalitarian way to achieve this goal would be to distribute the cost of subsidies as broadly as possible, but the forces attacking private property in California— though claiming the moral high ground—have proved themselves anything but egalitarian in their approach. In 1981, the City enacted the Residential Hotel Unit Conversion and Demolition Ordinance (S.F. Admin. Code, ch. 41) (the HCO; all citations to HCO are to chapter 41 of the San Francisco Administrative Code), the details of which are summarized in the majority opinion, ante, at pages 650 through 652. The HCO places the burden of providing low-income housing disproportionately on a relatively small group of hotel owners. These hotel owners certainly did not cause poverty in San *693Francisco; indeed, for a long time they voluntarily helped relieve the problem by leasing some or all of their rooms on a long-term basis to low-income residents. But as the economy of the City shifted, this residential use of their hotel rooms became increasingly unprofitable, and hotel owners began to abandon the residential rental business. It was then that the City, facing constitutional constraints on taxation and other sources of revenue, began to see the hotel owners as the most convenient—if not the most equitable—off-budget solution to its housing problems. If the City were devising a tax that would subsidize low-cost housing, I strongly doubt it would limit its tax to the owners of a few hundred residence hotels, but in the often surreal world of political expedience, these ill-fated business people were ordered to use their property for the benefit of the poor, thereby greatly depressing the market value of that property.
The express purpose of the HCO was to preserve the City’s stock of low-income residential housing by requiring hotel owners to continue leasing their rooms as residences, or to replace those residential units if they chose to convert the rooms to tourist use. (HCO, §§ 41.2, 41.3.) Obviously, the HCO is facially unconstitutional. If a person took my car and asked a ransom for its return, he or she would be guilty of theft. But what if the City, seeking to provide transportation to the poor, orders me to operate an informal carpool, or if I prefer, to buy the City a replacement car? When presented with a similar hypothetical at oral argument, the San Francisco City Attorney declared such a rule a mere “regulation of use.” I disagree. The essence of private property is the right to use that property as one sees fit and for one’s own advantage. The police power permits the government to regulate that use so as to promote health, safety, and the general welfare, but it does not permit the government to achieve its social agenda by ordering a political minority to dedicate its property to the benefit of a group the government wishes to favor. As I explain in more detail in part II below, such a regulation amounts, in practical effect, to a transfer of title and requires the government to pay its way.
But constitutional issues aside, the City had another problem with its HCO. In 1985, the state Legislature enacted the Ellis Act, which unequivocally guarantees the right of property owners to abandon the residential rental business. Government Code section 7060, subdivision (a), provides: “No public entity . . . shall, by statute, ordinance, or regulation, or by administrative action implementing any statute, ordinance or regulation, compel the owner of any residential real property to offer, or to continue to offer, accommodations in the property for rent or lease.” If this clear language left any doubt about the continuing viability of the HCO, that doubt was finally resolved against the City in Bullock v. City and County of *694San Francisco (1990) 221 Cal.App.3d 1072, 1102 [271 Cal.Rptr. 44] (Bullock), which held that the Ellis Act preempts the HCO. “We conclude,” said the court in Bullock, “that [the HCO] is preempted by the Ellis Act and is therefore invalid to the extent it is applied to prevent plaintiff from going out of the residential hotel business.” (Bullock, at p. 1102, italics added.) In other words, state law expressly permits property owners to do what the HCO bars them from doing: it permits them to stop leasing to residents.
The City, however, was unwilling so easily to concede defeat. The Ellis Act affirms the continuing power of public entities “to grant or deny . . . zoning . . . approvals.” (Gov. Code, § 7060.1, subd. (b).) This provision seems reasonable on its face: property owners are free to stop leasing to residents, but they still must obey zoning laws regulating the new use to which they intend to put their property. (See also Gov. Code, § 7060.7.) Conveniently, the City amended its zoning laws shortly after the Ellis Act became law. As related in the majority opinion (maj. opn., ante, at pp. 652-653), one effect of this change was to require the owners of the San Remo Hotel to obtain a conditional use permit before “intensif[ying]” any use of their property as a tourist hotel. (S.F. Planning Code, § 178, subd. (c).) The parties dispute the extent to which the rooms in the San Remo Hotel were ever, in fact, being used as residences, but as the majority points out (maj. opn., ante, at pp. 658-663), at least some of those rooms were historically used as residences, and to the extent the owners sought to convert those rooms to tourist use, the change required a permit under the new zoning ordinance. In short, the City put in place a zoning mechanism by which it could try to achieve the goals of its preempted HCO, if it chose to do so.
But the City had to proceed cautiously. Bullock made clear that the City could not use zoning laws pretextually to bar landlords from exercising their rights under the Ellis Act. As the court stated, “[n]othing in the Ellis Act gives any landlord invoking its protection the unilateral power to effect what amounts to a rezoning of his property . ... ft]] The City is . . . not precluded from seeking to have enjoined a violation of [zoning] ordinances ..., so long as this claim is not used as a pretext for halting [the property owner’s\ departure from the residential hotel business.” (Bullock, supra, 221 Cal.App.3d at p. 1104, italics added.) Implicitly conceding that the Ellis Act is in direct conflict with the HCO, the majority argues (maj. opn., ante, at p. 663) the Ellis Act has no effect here because the record does not establish that plaintiffs complied with its notice requirements. (See Gov. Code, § 7060.4.) But the power of local governments to implement the Ellis Act by requiring notice in no way negates the fact that state law has preempted the City from using zoning as a way to discourage property owners from exiting *695the residential rental business. Government Code section 7060.4 permits local governments to enact notice requirements, but it does not permit those governments to enact zoning restrictions that abrogate the very protections the Ellis Act affords. Therefore, whether plaintiffs followed the notice requirements of the Ellis Act is beside the point; the state has occupied this area of law, and the City may not enact and enforce contrary laws. Nevertheless, after the City amended its zoning laws, the preempted HCO was poised to become the ghost that drove zoning decisions in San Francisco.
Here, for example, the owners of the San Remo Hotel sought to convert their hotel to full tourist use. The City’s Planning Department told them that—consistent with the recent amendments to the zoning laws—they would need a conditional use permit. Whether to issue a conditional use permit is an adjudicative decision that is exercised at the discretion of the planning commission (S.F. Planning Code, §§ 303, 316, 316.8), and the planning commission exercised its discretion here by conditioning the San Remo Hotel permit on, among other things, compliance with the preempted HCO. The owners of the San Remo Hotel met this condition by paying, in protest, a $567,000 “in lieu fee” (representing a portion of the appraised cost of building replacement housing) and brought this action alleging, among other things, a taking without just compensation in violation of the state Constitution.
This constellation of facts makes this case indistinguishable from Ehrlich v. City of Culver City (1996) 12 Cal.4th 854 [50 Cal.Rptr.2d 242, 911 P.2d 429] (Ehrlich). Ehrlich addressed the same problem that the United States Supreme Court recognized in Nollan v. California Coastal Comm’n (1987) 483 U.S. 825 [107 S.Ct. 3141, 97 L.Ed.2d 677] (Nollan) and Dolan v. City of Tigard (1994) 512 U.S. 374 [114 S.Ct. 2309, 129 L.Ed.2d 304] (Dolan). When a government agency has discretionary authority to permit or prohibit a new use of property, the risk arises that governmental greed will consciously or unconsciously distort the decisionmaking process, causing the agency to exact a condition from the property owner that has nothing to do with mitigating the effects of the proposed new use. This sort of regulatory leveraging, taken to its extreme, might cause a government to impose “stringent land-use regulation which [it] then waives to accomplish other purposes” (Nollan, at p. 837, fn. 5 [107 S.Ct. at p. 3149]), and this concern warrants a more searching inquiry by a reviewing court than might otherwise be appropriate.
In Nollan, for example, a California agency conditioned a permit to develop beachfront property on dedication of a public easement. The easement, which permitted the public to cross the property to gain access to the *696ocean, “utterly fail[ed] to further the end” of mitigating the impact of the proposed development on ocean views, and therefore lacked the “essential nexus” that the federal Constitution required and amounted to “ ‘extortion.’ ” (Nollan, supra, 483 U.S. at p. 837 [107 S.Ct. at pp. 3148-3149].) Similarly, in Dolan the City of Tigard conditioned a permit to greatly expand a retail sales complex on dedication of a strip of property as a pathway for pedestrians and bicycles. The high court held that a permit condition must be “ ‘rough[ly] proportional[]’ ” “in nature and extent” to mitigating “the impact of the proposed development” (Dolan, supra, 512 U.S. at p. 391 [114 S.Ct. at pp. 2319-2320] and the City of Tigard had failed “to quantify its findings” that the pathway would mitigate increases in traffic. (Id. at p. 395 [114 S.Ct. at p. 2322].) In Ehrlich, we unanimously extended the principle of Nollan and Dolan to a case in which a city demanded a monetary fee from a developer rather than a dedication of an interest in real property, noting that the same risk of governmental abuse was present. (Ehrlich, supra, 12 Cal.4th at p. 876 (plur. opn. of Arabian, J.); id. at pp. 899-901 (conc. opn. of Mosk, J.); id. at p. 907 (conc. & dis. opn. of Kennard, J.); id. at p. 912 (conc. & dis. opn. of Werdegar, J.).) The majority reaffirms the holding of Ehrlich today. (Maj. opn., ante, at pp. 666-667.)
Here, as in Ehrlich, a public agency (the City’s Planning Commission) has made a discretionary adjudicative decision with respect to a specific permit application. Contrary to the argument of the majority (maj. opn., ante, at pp. 668-670), this case does not involve a legislatively imposed fee for which the risks of abuse are arguably held in check by the political process. (Maj. opn., ante, at pp. 670-671.) Rather, in an adjudicative proceeding concerning a single property owner’s permit request, the planning commission chose to require HCO compliance and thereby used the leverage it gained by regulating commercial uses of property to exact a $567,000 fee. On these facts, the fee must be roughly proportional in nature and extent to mitigating the impact of the proposed new use of the property. (Ehrlich, supra, 12 Cal.4th at p. 876 (plur. opn. of Arabian, J.); id. at pp. 899-901 (conc. opn. of Mosk, J.); id. at p. 907 (conc. & dis. opn. of Kennard, J.); id. at p. 912 (cone. & dis. opn. of Werdegar, J.).) In short, because we are dealing with a discretionary decision of the planning commission rather than direct enforcement of the HCO, the government’s decision here, like the decision at issue in Ehrlich, was adjudicative.
The majority tries to sidestep this gaping hole in its argument with a footnote asserting that under applicable zoning laws “conversion of residential rooms to commercial use is unconditionally prohibited above the first floor in the North Beach district except insofar as permitted by the HCO (S.F. Planning Code, §§ 722.38, 790.84).” (Maj. opn., ante, at p. 669, fn. 11.) *697The majority concludes: “The planning commission, therefore, had no discretion to permit such change in use absent HCO compliance.” (Ibid.) In other words, the majority argues the planning commission’s decision here was legislative, not adjudicative, thereby permitting the majority to exploit the exception it reads into Ehrlich for legislatively created permit fees.
First, the majority simply misreads the City’s Planning Code. San Francisco Planning Code section 722.38 prohibits conversion from residential to nonresidential use above the first floor, but section 790.84 of that code does not limit the exception from this prohibition to cases where the property owner complies with the HCO. Rather, section 790.84 creates an exception for conversions that are “defined and regulated in [the HCO].” The San Francisco Planning Code therefore remains neutral with respect to HCO compliance. It simply provides that its flat prohibition on conversions does not apply when the HCO applies, thereby giving space within which the HCO can operate. Nothing in the Planning Code requires the planning commission to enforce the HCO, nor does the Planning Code state that conversions are prohibited except “as permitted by the HCO.” (Maj. opn., ante, at p. 669, fn. 11.) In other words, the Planning Code leaves a regulatory gap with respect to conversions regulated in the HCO, and the commission has, in its discretion, chosen to fill that gap by requiring HCO compliance. Its decision was not compelled by any legislative rule, and therefore it is no different from the decision at issue in Ehrlich. At the very least, the legislative rule was ambiguous, and the planning commission’s interpretation of the rule was in that sense adjudicative.
Second, the majority’s exception for legislatively created permit fees is mere sophism, particularly where the legislation affects a relatively powerless group and therefore the restraints inherent in the political process can hardly be said to have worked. (Cf. United States v. Carolene Products Co. (1938) 304 U.S. 144, 152, fn. 4 [58 S.Ct. 778, 783-784, 82 L.Ed. 1234].) If the agency in Nollan had passed a rule requiring all beachfront property owners to dedicate an easement as a condition of developing their properties, those easements would have no better mitigated the effects of development (and they would have been no less objectionable) than the easement that the agency exacted adjudicatively. Of course, when the government may prohibit a certain use of property entirely, it may opt instead to place conditions on that use (Nollan, supra, 483 U.S. at p. 836 [107 S.Ct. at p. 3148]), but the conditions must be related in some real way to the justification advanced for a complete prohibition. (Id. at p. 837 [107 S.Ct. at pp. 3148-3149].) Otherwise, the government has transformed the police power into an efficient way to raise money by regulating political minorities and then selling exemptions from the regulatory scheme, without any real intent to advance the scheme’s *698purported purpose. It becomes “as if California law forbade shouting fire in a crowded theater, but granted dispensations to those willing to contribute $100 to the state treasury.” {Ibid.) The government, in effect, says: We have the power; therefore, pay us to leave you alone. By any measure, that is extortion. Moreover, it turns the takings clause on its head. Instead of the government having to pay compensation to property owners, the government now wants property owners to compensate it to get back the fair value of property the government took away through regulation.
A public agency can just as easily extort unfair fees legislatively from a class of property owners as it can adjudicatively from a single property owner. The nature of the wrong is not different or less abusive to its victims, but the scope of the wrong is multiplied many times over. Therefore, I believe Ehrlich should apply whenever the risk is great that greed for public revenues has driven public regulatory policy. In other words, where a legislative scheme imposes a burdensome fee on a small class of property owners as a condition to buying relief from a regulation, I believe careful judicial scrutiny is appropriate, including finding a close link between the fee and the purpose of the regulation. In light of the majority’s decision, however, we can be sure that agencies will now act legislatively, rather than adjudicatively, and thereby insulate their actions from close judicial scrutiny.
In addition, the HCO is structured in such a way that the same sort of discretionary, case-specific decisionmaking that triggered our holding in Ehrlich also takes place under the HCO. The fee that a hotel owner may pay under the HCO so as to buy the right to lease residential rooms to tourists is a fixed portion of the estimated cost of replacing the lost residential housing. (HCO, § 41.13, subd. (a)(4), (5).) Though this cost estimate must be based on two independent appraisals {ibid.), it nevertheless permits a discretionary element to enter into the process, with the result that the City and the property owner inevitably end up in a back-and-forth negotiation over the amount of the fee. Obviously, the City has the upper hand in this negotiation—because it is holding the conversion permit hostage—and therefore the City is free to squeeze as large a fee as possible from the property owner. That dynamic brings into play all the concerns that justified our holding in Ehrlich, and therefore the same careful scrutiny ought to apply.
Finally, and most importantly, the majority fails to appreciate that, if the San Francisco Planning Code somehow requires across-the-board compliance with the HCO, then the Ellis Act preempts that requirement, just as it preempts the HCO itself. The zoning exception to the Ellis Act permits the City to place certain limits on how a property owner may use property, but as Bullock held, the City may not use that zoning power to erect barriers to *699a property owner’s decision to exit the residential rental business, even if the effect is to reduce the residential housing stock of the City. (Bullock, supra, 221 Cal.App.3d at p. 1104.) In other words, the planning commission, acting under the zoning exception to the Ellis Act, might be able to block the owners of the San Remo Hotel from renting more rooms to tourists, assuming its purpose is to limit the number of tourist hotel rooms in the area, but the commission may not do so to protect the City’s stock of low-cost residential housing, because that would be inconsistent with the state law right of property owners to stop leasing to residents. Nevertheless, here the majority argues (and the City concedes) that the preservation of low-cost housing was the planning commission’s purpose when it required HCO compliance. (See, e.g., maj. opn., ante, at pp. 672-679.) That purpose was simply impermissible under the Ellis Act, and even if it were somehow permissible, the majority acknowledges that at least some rooms at the San Remo Hotel were historically used as tourist rooms (maj. opn., ante, at pp. 658-663), and therefore it cannot, in any case, justify the planning commission’s decision to charge a conversion fee for all rooms. (Cf. id. at pp. 667-678.)
Of course, despite the Ellis Act problem, the majority and the City have no choice but to assert that the planning commission’s purpose was the preservation of residential housing, because if the planning commission had some other purpose, it could not—under any standard of review (rational basis, reasonable relationship, or rough proportionality)—have attached the condition that the owners of the San Remo Hotel take steps to preserve low-cost residential housing. Just as in Nollan, where the easement providing access to the beach was not related in any way to mitigating the obstruction of an ocean view, similarly here the preservation of low-cost housing is not related in any way to mitigating the impact of more tourist hotel rooms in the neighborhood of the San Remo Hotel. In other words, by requiring HCO compliance as a condition for renting more rooms to tourists, the planning commission has revealed its true colors: it does not care about the number of hotel rooms in the area; what it really cares about is preventing property owners from exiting the residential rental business. But this the City simply cannot do under the Ellis Act—if not for the fact that the majority has chosen to turn a blind eye.
II. The HCO Is Facially Unconstitutional Under the Takings Clause of the California Constitution
Our takings jurisprudence—both state and federal—has become so labyrinthine and compartmentalized that attempts to find just the right standard for the case often entirely miss the underlying point of the exercise. We speak of ad hoc inquiries, relevant factors, per se takings, and means-end *700relationships. We chip away at the problem with separate lines of cases addressing distinct issues such as development permits and price controls. And all these efforts, valid as far as they go, leave us still groping for a basic conceptual approach that takes seriously the constitutional prohibition against uncompensated takings of private property. Thus, like the Wizard of Oz, we mystify our audience with the look and feel of great erudition, while concealing the humble reality that we have yet to solve the problem in a satisfactory way.
But, here, we need not consider all these arcane standards and fragmentary theories. These are analytical tools relevant to tough cases—cases in which it is unclear whether property has been taken. This is not a tough case. Here, property unquestionably has been taken. No matter the analysis, the facts of this case come down to one thing—the City and County of San Francisco has expropriated the property and resources of a few hundred hotel owners in order to ameliorate—off budget and out of sight of the taxpayer—its housing shortage. In short, this ordinance is not a matter of efficiently organizing the uses of private property for the common advantage; instead, it is expressly designed to shift wealth from one group to another by the raw exercise of political power, and as such, it is a per se taking requiring compensation.
The majority rejects the legal theories on which the property owners have proceeded, but it fails to confront the more basic issue that prefigures all others: the City has replaced taxation and the provision of public services with a regulation that orders certain people to use their private property to do the government’s work. If the relevant case law is sparse, it is only because no public agency has ever been so bold.
“Private property may be taken or damaged for public use only when just compensation . . . has first been paid to . . . the owner.” (Cal. Const., art. I, § 19.) In a simple world where “property” is understood to refer to tangible property and “tak[ingj” is understood to be a formal transfer of title, this constitutional injunction is relatively easy to apply. But such a narrow application of the takings clause would trivialize the right. Restriction of any one of the several rights that constitute private property in effect takes that property. For example, a property owner cares little about the formalities of title possession when the property in question has been rendered nearly valueless by regulations prohibiting its most productive uses. In that case, the regulations have deprived the owner of so many of the rights that originally constituted the property that the property has, in effect, ceased to exist, or it has become a mere empty shell. Furthermore, in a complex and increasingly service- and information-based economy, the constitutional *701protection of intangible property is just as critical as the protection of physical property was to an agrarian and manufacturing economy.
Nevertheless, in countless ways, government takes property—in the sense of regulating its use—without always having to compensate the owner. In Penna. Coal Co. v. Mahon (1922) 260 U.S. 393, 413 [43 S.Ct. 158, 159, 67 L.Ed. 322, 28 A.L.R. 1321] (Penna. Coal Co.), Justice Holmes noted that “[government hardly could go on” if it had to pay its way every time a regulation restricted the use of property. The law has long recognized, for example, that government might, in the exercise of the police power, act to proscribe a nuisance, and in so doing it need not pay compensation. (See, e.g., Civ. Code, § 3479; Code Civ. Proc., § 731.) Holmes spoke of “an average reciprocity of advantage” whereby a property regulation ultimately works for the enrichment of all, though it imposes specific limitations on the use of certain property. (Penna. Coal Co., at p. 415 [43 S.Ct. at p. 160].)
For example, business owners on a popular shopping street might generally agree that their properties would be more attractive, and hence more valuable, if all the businesses used small, attractive signs rather than huge, garish billboards. Nevertheless, without regulation, competitive forces will inevitably cause business signs to become ever larger and more visually intrusive. No business owner wants to be the only one on a shopping street to have a small sign, and transaction costs often prevent owners from coming together to negotiate an agreement that would work to their common advantage. In that case, a regulation that has the immediate effect of reducing property value by restricting sign size, has the indirect effect of enhancing that value for all affected businesses. (See generally Epstein, Takings: Private Property and the Power of Eminent Domain (1985) pp. 195-215.)
A similar justification can be articulated in the case of the regulations proscribing nuisance. For example, if the law prohibits a property owner from operating a slaughterhouse in a residential neighborhood, the immediate effect might be to lower incrementally the value of the regulated property, but the indirect effect is to place that property in a neighborhood rendered more desirable for residential use, thereby enhancing its value. Again the same rationale can be extended to justify zoning and planning regulations that constrain the freedom of developers but enhance all property values over the long term by making cities more attractive and efficient. Finally, when a regulatory scheme creates new value for a property owner by establishing an artificial monopoly—as, for example, might be true in the case of a utility—the government can regulate the profit the property owner gains from its government-created preferential status. All these examples point to the same fundamental principle: property owners, given a choice, *702will prefer to own property in a community having appropriate and mutually beneficial regulations, because such property has greater value by reason of the regulation. Accordingly, regulatory authority is not inherently confiscatory in all cases.
But the corollary of this rule—one I think is implicit in the takings clause of the state Constitution—is that a regulation is a taking if, rather than promoting “an average reciprocity of advantage” (Penna. Coal Co., supra, 260 U.S. at p. 415 [43 S.Ct. at p. 160]), it is merely designed to benefit one class of citizens at the expense of another; that is, if it simply shifts wealth by a raw act of government power. The government, in that case, has deprived the property owner of a right associated with his property, shifting that right to another party, but it has in no sense compensated the owner by enhancing, in some real way, the value of the rights the owner has retained.
In short, it might be perfectly legitimate for the City to help the low-income residents of San Francisco, but it may not do so at the expense of some small class of persons simply by legislating a transfer of property rights. Of course, providing assistance to low-income residents of the community incrementally benefits all members of the community both by removing the blight of homelessness and by representing a general moral good, but here the burden of this common benefit falls so disproportionately on 500 business owners in a city of 776,700 residents that careful judicial scrutiny is warranted. Where the impact is so. disproportionate, we cannot say that we have “an acceptable level of assurance that over time the burdens associated with collectively determined improvements will have been distributed ‘evenly’ enough so that everyone will be a net gainer.” (Michelman, Property, Utility, and Fairness: Comments on the Ethical Foundations of “Just Compensation” Law (1967) 80 Harv. L.Rev. 1165, 1225, original italics.) Moreover, it simply stretches the police power too far to suggest that the City is somehow regulating the use of property for the common advantage when it redistributes wealth by ordering a political minority to dedicate its property to the benefit of another group. The police power can no more be used in this way than it could be used to order a rich man to give a beggar a dime. Here, the primary beneficiary of the regulation is not the common advantage but the low-income individuals who obtain the inexpensive housing. Laudable as that goal might be, the takings clause precludes the government from achieving the goal by police power regulation.
Nor can the HCO be justified under the theory that the City is merely requiring property owners to continue the existing use of their property. (See, e.g., Penn Central Transp. Co. v. New York City (1978) 438 U.S. 104, 125 [98 S.Ct. 2646, 2659-2660, 57 L.Ed.2d 631].) Such a rule would punish *703a property holder for using property in a way that proved popular. Moreover, it fails to recognize the effect of shifting economic conditions and therefore locks property into unproductive uses. But most important, such a rule represents a dedication of property rights to the public, and in all fairness the public should have to pay for these rights, just as a private party would. For these reasons, I would not extend the holding of Penn Central beyond its unique factual context, including the fact that the regulatory authority in that case might have permitted a more moderate development of the property than the one the property owner sought and it gave the property owner transferable development rights as compensation. (Id. at pp. 136-137 [98 S.Ct. at pp. 2665-2667].)
Here, the City has essentially said to 500 unlucky hotel owners: We lack the public funds to fill the need for affordable housing in San Francisco, so you should solve the problem for us by using your hotels to house poor people. The City might as well have ordered the owners of small grocery stores to give away food at cost. The federal takings clause “bar[s] Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.” (Armstrong v. United States (1960) 364 U.S. 40, 49 [80 S.Ct. 1563, 1569, 4 L.Ed.2d 1554].) I believe the same principle underlies our state takings clause. Accordingly, I would find the HCO facially unconstitutional.

Conclusion

I agree with part I of the concurring and dissenting opinion of Justice Baxter to the effect that the San Francisco Planning Code does not require a conditional use permit for tourist use of hotel rooms that were traditionally dedicated to tourist use, and therefore with respect to those rooms, a conversion fee was inappropriate under any takings standard. In addition to the points Justice Baxter makes, I would find the HCO preempted by the Ellis Act and facially unconstitutional, and therefore that the plaintiffs were free to disregard the HCO, and the HCO cannot render tourist use of their hotel illegal. Furthermore, because the HCO was in effect void, plaintiffs’ admission under the HCO concerning residential use of their hotel is not binding on them. Moreover, the admission was based on a 1981 version of the HCO, which permitted tourist use of the rooms during the all-important summer season (1981 S.F. Admin. Code, § 41.16, subd. (a)(3)(B)), and therefore the City cannot use that admission against plaintiffs now that it seeks to restrict plaintiffs under a different ordinance from tourist use during any season. Therefore, I would affirm the Court of Appeal’s decision with respect to the writ petition.
I would also affirm the Court of Appeal’s conclusion that the Ehrlich “ ‘rough proportionality’” standard (Ehrlich,, supra, 12 Cal.4th at p. 876) *704applies to the San Francisco Planning Commission’s decision to require HCO compliance. This decision was adjudicative both in fact and form, and even if it were not, it would nevertheless be extortionate in nature and therefore suspect. I would also affirm the Court of Appeal’s conclusion that, under the Ehrlich standard, the City has failed to show a sufficiently close link between its fee, which will subsidize low-cost residential housing, and the regulatory purpose of limiting the number of hotel rooms in the neighborhood (that being the only purpose that the planning commission could have had without impinging on plaintiffs’ rights under the Ellis Act).
Once again a majority of this court has proved that “ ‘If enough people get together and act in concert, they can take something and not pay for it.’ ” (Landgate, Inc. v. California Coastal Com. (1998) 17 Cal.4th 1006, 1035, fn. 1 [73 Cal.Rptr.2d 841, 953 P.2d 1188] (dis. opn. of Brown, J.), quoting O’Rourke, Parliament of Whores (1991) p. 232.) But theft is still theft. Theft is theft even when the government approves of the thievery. Turning a democracy into a kleptocracy does not enhance the stature of the thieves; it only diminishes the legitimacy of the government. Like Justice Rehnquist, I “see no reason why [constitutional protections of property rights] should be relegated to the status of a poor relation.” (Dolan, supra, 512 U.S. at p. 392 [114 S.Ct. at p. 2320].) The right to express one’s individuality and essential human dignity through the free use of property is just as important as the right to do so through speech, the press, or the free exercise of religion. Nevertheless, the property right is now—in California, at least—a hollow one. I dissent and hope the plaintiffs find a more receptive forum in the federal courts.