2910 Georgia Avenue LLC v. District of Columbia

In 2009, real estate development company 2910 Georgia Avenue LLC (2910) (plaintiff) purchased a vacant lot with intent to build a 22-unit condominium building. 2910 applied to the District of Columbia (district) (defendant) for the necessary building permit. The district had recently adopted its Inclusionary Zoning Program (program), which required that 8 to 10 percent of any new residential development be sold or leased to eligible low- and moderate-income households at rates below specified maximums. 2910’s permit application was the first one to involve a building subject to the program. A zoning-office employee initially indicated that zoning had been approved without program compliance. However, another employee noticed the mistake and subsequently informed 2910 that its permit would be approved only if it complied with the program. Needing the permit, 2910 complied, designating two of the 22 intended units as inclusive-zoning units (IZ units). In 2011, shortly before construction was complete, 2910 notified the district that the two IZ units would soon be available. Although the district created a list of eligible buyers and began engaging in lotteries and other selection procedures, no buyers were identified for an extended period. 2910 asked the district to release it from compliance with the program so that it could sell the units to market buyers, but the district refused. In 2012, when the IZ units remained unsold after the building’s 20 other units had been purchased, 2910 sued the district and district officials (defendants). 2910 alleged that the district’s application of the program constituted an unconstitutional taking and violated 2910’s due-process and equal-protection rights. 2910 claimed that the district was responsible for the ongoing delay in selling the IZ units, citing problematic program requirements that prevented potential buyers from acquiring mortgages ensured by the United States Department of Housing and Urban Development. 2910 also cited understaffing and other blunders by the district. The district countered that the delay in selling the units was attributable to 2910’s unwillingness to advertise the units and rejection of at least one potential buyer. The district also pointed out that although the IZ units remained unsold, 2910 had already received over $6 million from selling the other units and had therefore made a profit on the development. While the suit was pending, the IZ units eventually sold between 2015 and 2017 at program rates. The district court considered the parties’ cross motions for summary judgment.