Starting in 2007, the San Francisco city planning commission held more than twenty hearings relating to possible violations of city land-use laws, including the unauthorized conversion of rent-controlled housing to academic use; in May 2016, the city brought a lawsuit against the school. In December 2016, an agreement was reached whereby the Academy agreed to pay the city $20 million in fees, $7 million of which were to go to purchasing low-income housing. The school was also to provide additional low-income housing for seniors as part of the deal. The University failed to meet the terms of the 2016 agreement and in January 2020 the agreement was amended, requiring the Academy of Art University to pay $37.6 million to the city to build affordable housing.