Tell the city to talk to their GRANDFATHER about it.
If that does not work request a VARIANCE.
If that doesn't work, consult with a real estate attorney.
Harold Sharpe - Broker
So Cal Homes Realty
California Department of Real Estate Broker License # 01312992
The problem in not so much the PERMIT as it is the CODE and safety considerations.
You can probably hire a Lawyer and fight it;
But which would be more expensive?
Good luck and may God bless