Housing backlash: Hoteliers mull legal action

By Doug McMurdo • The Times-Independent

When Moab City Council Member Mike Duncan told Brent Bateman the city expects to be legally challenged for forcing hotel and motel builders to pay a fee, Bateman, the lead attorney for the Utah Office of the Property Rights Ombudsman said, “It’s already happening.”

Bateman was in the middle of a Grand County Council workshop on land use regulations Tuesday afternoon when he dropped the bombshell. “My phone is ringing off the hook,” said the attorney. “Hotel developers feel like they’re fixing a big problem” that the industry is not entirely responsible for causing.

Bateman said his office is writing an advisory opinion at the behest of the lodging industry. He explained such opinions are written in an effort to predict what a judge might decide if the issue were litigated. Bateman made it clear the opinion is just that, it doesn’t come “with the force of law,” but it does serve to help people decide whether or not to file a lawsuit.

He did not offer insight into which side his office is leaning, saying the opinion would be finished in a matter of weeks. The fee requirement, also known as an extraction, is part of the city’s affordable housing ordinances. One has been approved and another is nearing a vote. Grand County is pursuing similar laws.

So why is it such a big issue? “You can’t have excessive extractions,” said Bateman. He said the government can make certain that development pays for itself, but it can’t make development pay for the “issues or mistakes” of others.

Bateman said a legal proportionality test would be used, meaning when government takes something from a business and gives it to the public, it has to be proportional. They can only be compelled to pay for impacts they directly cause.

The Nexus studies both local governments leaned on to draft the respective housing ordinances will be on trial, suggested Bateman. “That’s what we’re doing. We’re looking at the Nexus studies.” There are two of them. The first is a feasibility analysis and the second provides guidance on how to proceed.

Bateman said the city – and potentially the county – could almost certainly expect lawsuits over the issue.

“The fact that we’re doing an opinion is the only reason this isn’t going nuclear.”

Earlier in Bateman’s overview on property rights, he mentioned that local governments that change regulations administratively are vulnerable to lawsuits they would probably lose, whereas cities who do so legislatively are more likely to survive a lawsuit. The City of Moab and Grand County are enacting ordinances, which are legislative actions.