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Court Ruling Supports Requirements for Affordable Housing

Updated on July 12, 2015

Other Cities Are Likely to Follow with Affordable Housing Rules

A recent California Supreme Court ruling is ramping up the pressure on cities with expensive real estate to require developers to build affordable housing for low and moderate-income residents.

Some housing advocates want political leaders in other states and cities to institute similar policies.

The California Supreme Court said a lack of moderately-priced housing has created a crisis of epic proportions that should allow cities to use regulatory measures to relieve the problem.

The court’s ruling would allow Los Angeles and other cities to require developers to sell some of their housing at below-market rates before they could get building permits. Cities could give developers an option to contribute to a fund for low-cost housing.

The court’s decision involved a San Jose ordinance that required developers who build 20 or more housing units to offer 15 percent of them at rates below market value. Alternatively, builders could pay into a city fund that subsidizes low-income housing.

Builders and real estate groups sued to block the law. Realtors and developers said the law was an unconstitutional taking of private property that violated the 14th Amendment.

The California Supreme Court said cities have broad discretion to regulate the use of real property to serve the legitimate interests of the general public.

Legal analysts say the California ruling creates a likelihood that other cities will adopt the same kind of affordable housing regulations.

The District of Columbia currently uses inclusionary zoning that encourages developers to provide affordable housing but does not require it. Developers can get a bonus density that allows them to build more units than usual in a project if they set aside some of the housing for low-income residents.

The nation’s first inclusionary zoning program was used by Montgomery County, Maryland, in the 1970s. The D.C. inclusionary zoning ordinance took effect in 2007.


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