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The city’s inclusionary housing policy requiring developers to set aside new apartment units for low-income tenants is safe – for the time being. 

TransAction Companies, lead developers of the Library Gardens apartment complex, filed a challenge to the city’s policy shortly after the project was approved by the Zoning Adjustments Board in October. 

The company withdrew the appeal on Friday, shortly after a closed City Council meeting on the subject. 

On Tuesday, the City Council met with staff from the city attorney’s office to discuss the city’s chances if it were sued by TransAction about the inclusionary housing requirement, which requires developers to set aside 20 percent of new apartments for tenants with a less-than-average income.  

“We thought that we had some that was of mutual benefit to us and to the city,” said TransAction Vice President John DeClercq on Tuesday. “They disagreed with us.” 

DeClercq suggested that the council’s decision to stand by the city policy was unanimous. 

“They’ve got nine marbles and we’ve got no marbles,” he said. 

The developers had suggested that Costa-Hawkins, a 1995 state law designed to limit rent control, had invalidated the inclusionary housing requirement. 

Zach Cowan, deputy city attorney, said his office did not accept TransAction’s reading of the Costa-Hawkins legislation 

“When you have a statute that’s ambiguous, you always want to interpret things on the basis of legislature’s intent,” he said. “There is no discussion of inclusionary housing in (Costa-Hawkins’) legislative history.” 

Cowan noted, however, that the inclusionary housing requirement could be challenged again in the future, as its provisions have never been tested in court in light of Costa-Hawkins. 

Mark Rhoades, the city’s current planning manager, said in any event, the planning staff would examine the substance of TransAction’s challenge. 

“Because the issue has been raised, we are going to review the inclusionary ordinance to make sure this doesn’t happen in the future,” he said. 

Rhoades noted that any changes to the rule would be brought before the Planning Commission and the City Council. 

Library Gardens, a 176-unit complex next to the Central Library at 2020 Kittredge St., is believed to become the largest housing development in Berkeley history, apart from dormitories and student co-ops. 

A separate appeal of the project, filed by Fred Lupke, will be heard by the City Council on Feb. 26. 

Contact reporter Hank Sims at hank@berkeleydailyplanet.net.