California – U.S. Supreme Court Denies Review of Affordable Housing Law, for now

California Building Industry Ass’n v. San Jose – Denial of Cert

The U.S. Supreme Court refused review of the California Supreme Court decision in the case California Building Industry Association vs. San Jose, leaving the  California Supreme Court decision in place.

The case (and related decisions) has important implications for issue that remains “unsettled” under the Takings Clause of the U.S. Constitution.

In 2010, the city of San Jose, California, enacted an ordinance compelling all developers of new residential development projects with 20 or more units to reserve at least 15% of units marketed for sale to low-income buyers.

The ordinance requires those units to be sold at an “affordable housing cost”—a below-market price that cannot exceed 30 percent of these buyers’ median income.  Restrictions imposed on those units (presumably through recorded covenants) must remain valid for at least 45 years.

A California state trial court enjoined the ordinance, but the California Court of Appeal reversed, and the California Supreme Court of California affirmed that decision (61 Cal. 4th 435, 351 P. 3d 974 (2015)).

The U.S. Supreme Court’s denial, embedded above, illustrates the tension caused by (appropriately) limited standard of review of the Court.  But, for at least two decades courts have
divided over whether the tests prescribed in the U.S. Supreme Court decisions of Nollan v. California Coastal Comm’n, 483 U. S. 825 (1987), and Dolan v. City of Tigard, 512 U. S. 374 (1994) apply in cases where the taking stems from a condition imposed by a legislature, rather than an administrative condition (both Nollan and Dolan, read by law students everywhere reviewed administrative conditions).

The California Supreme Court did not apply the Nollan/Dolan test, instead holding that a legislative land-use measure is not a taking and survives a constitutional challenge so long as the measure bears “a reasonable relationship to the public welfare.”

Until the U.S. Supreme Court decides whether the  Nollan/Dolan test applies to legislative action, property owners and localities are left uncertain about what legal standard applies and whether localities can legislatively impose exactions that would not pass muster if they were instead done administratively.

Justice Thomas, in his denial, essentially asks for another case to be brought with those arguments, providing, “These factors present compelling reasons for resolving this conflict at the earliest practicable opportunity.”

Further News Coverage of the Issue is Below:

U.S. Supreme Court Lets San Jose Affordable Housing Law Stand

The U.S. Supreme Court declined Monday to take up a challenge to San Jose’s affordable housing law. In 2010, San Jose required that all new residential developments of 20 units or more set aside 15 percent of those units for sale below market rate. Developers could also pay a fee in lieu of creating affordable units.

A Supreme Court pass gives affordable housing advocates a win

Advocates of low-cost housing scored a legal victory Monday when the U.S. Supreme Court left intact a ruling by California’s highest court allowing cities and counties to require builders to include a percentage of affordable units in each new development.

U.S. Supreme Court leaves San Jose housing law in place

Posted: 02/29/2016 07:45:39 AM PST Updated: 02/29/2016 03:52:40 PM PST The U.S. Supreme Court on Monday turned away a legal challenge to a San Jose affordable housing law, leaving intact the city’s effort to address the exploding cost of housing in Silicon Valley.




Leave a Reply

Your email address will not be published. Required fields are marked *