Big Win for Affordable Housing: California Supreme Court Upholds Inclusionary Zoning

March 31, 2015
2014 Annual Report: A Legacy of Leadership
April 13, 2015

On June 15, 2015 the California Supreme Court released an opinion that affirms the ability of cities and counties to adopt inclusionary housing ordinances, a critical tool in developing affordable homes.


The ruling upholds the Appeal Court decision and finds in favor of the defendant and appellant, the City of San Jose, in the California Building Industry Association (CBIA) v. City of San Jose case. In 2010, the CBIA filed a lawsuit in superior court challenging San Jose’s for-sale inclusionary zoning ordinance. That ordinance required new for-sale residential developments of more than 20 homes to make 15% of the homes available for purchase by lower-income households or to pay in lieu fees or dedicate land for these desperately needed affordable homes.


After winning in the trial court, the CBIA then, in 2013, lost on appeal and petitioned the California Supreme Court to review the appellate court decision. NPH was an intervener and appellant in the case and our 2007 report, “Affordable by Choice: Trends in California Inclusionary Housing Programs” was cited on page 2 of the Court’s opinion.


A huge and heartfelt thank you to Mike Rawson of the The Public Interest Law Project and Melissa Morris of the Law Foundation of Silicon Valley for their outstanding work on this case representing affordable housing advocates. California Attorney General Kamala D. Harris also filed an outstanding amicus brief in support of the City of San Jose and inclusionary housing ordinances. We’d also like to express our gratitude to the City of San Jose.


Five justices concurred in the opinion written by Chief Justice Cantil-Sakauye and two justices wrote concurring opinions. The opinion affirms the “police power” of a local jurisdiction to adopt an inclusionary or mixed-income housing ordinance and that such ordinances are “reasonably related to the broad general welfare purposes” pursued by cities and counties. The Court also found that “the conditions that the San Jose ordinance imposes upon future development do not impose ‘exactions’ upon the developers’ property so as to bring into play the unconstitutional conditions doctrine under the takings clause of the federal or state Constitution.”


NPH applauds the Court’s opinion. For nearly forty years, inclusionary zoning policies have existed in California and more than 170 jurisdictions have adopted some form of an inclusionary ordinance. These important policies have produced approximately 30,000 new homes affordable to lower-income households. NPH has long been a proponent of inclusionary housing as a best practice and critical tool for local jurisdictions which have a compelling governmental interest to address the lack of affordable housing available to lower-income households as well as to comply with state and federal Fair Housing laws. Inclusionary programs are an especially important tool to ensure that we maintain and create integrated and socio-economic and ethnically diverse communities.


Find the full opinion HERE and an article from our friends at NLIHC HERE, with a quote from NPH Policy Director Michael Lane.


NPH has long supported inclusionary housing policies as an important tool for local jurisdictions to create affordable homes for working class families. Since the Palmer case, NPH and partners have been supporting Bay Area localities to continue to implement and adopt inclusionary policies on a voluntary basis for rental developments. Inclusionary policies are effective at creating housing choices in communities where no tradition of affordable housing development exists and where housing is produced without direct government funding. Most importantly, new inclusionary policies hold the potential for major regional impact.


In 2003, NPH launched a 3-year Inclusionary Housing Initiative that resulted in eleven Bay Area jurisdictions passing new or strengthened inclusionary housing policies. In addition to the advocacy efforts of the campaign, NPH collaborated with partners to produce two publications:


Affordable By Choice: Trends in California Inclusionary Housing Programs (2007) examined inclusionary policies across the state of California and looked at effectiveness, the type of homes produced, who lived in these homes, and the overall impact on the city or county.


On Common Ground: Joint Principles on Inclusionary Housing Policies (2005) is the joint policy brief issued by NPH and the Home Builders Association of Northern California with recommendations for jurisdictions interested in adopting an inclusionary policy. View Report>>


You can also download Inclusionary Housing in California: 30 Years of Innovation (2003), the original report from NPH and California Coalition for Rural Housing that inspired this work.


In this new period of austerity, with diminishing resources at the federal and state level for affordable housing, NPH is more committed than ever to support our members in advocating for the adoption of inclusionary policies in their communities. Although court decision Palmer/Sixth Street Properties L.P. v. City of Los Angeles has created confusion over the legality of this tool, the Public Interest Law Project has produced a paper for communities and advocates to address this issue and help them in formulating inclusionary policies that conform to the law. Download Inclusionary Zoning After Palmer & Patterson – Alive & Well In California here.