California Supreme Court

By Maura Dolan
June 15, 2015

Citing an affordable housing crisis of “epic proportions,” the California Supreme Court made it easier Monday for cities and counties to require developers to sell some housing at below-market rates.

The unanimous decision, written by Chief Justice Tani Cantil-Sakauye, follows study after study documenting a lack of affordable housing in the state, especially in California’s coastal regions.

“It will come as no surprise to anyone familiar with California‘s current housing market that the significant problems arising from a scarcity of affordable housing have not been solved over the past three decades,” the chief justice wrote.

“Rather, these problems have become more severe and have reached what might be described as epic proportions in many of the state‘s localities.”

The decision clears the way for Los Angeles and other cities to require developers to sell a percentage of the units they build at below-market rates as a condition of a building permit. Developers also could be given the option of paying into a fund for low-cost housing.

“I applaud the California Supreme Court’s decision,” Los Angeles Mayor Eric Garcetti said in a statement. “This gives Los Angeles and other local governments another possible tool to use as we tackle our affordable housing crisis.”

The ruling came in a challenge to an affordable housing ordinance passed by San Jose five years ago.

The state building industry, backed by real estate groups, sued the city, blocking it from enforcing the law. Developers contended it was unconstitutional “taking” of private property.

The law required developers building 20 or more housing units to offer 15% of them at below-market rates or pay into a city fund. Nearly 200 other cities and counties in the state have similar ordinances.

Monday’s ruling said municipalities have “broad discretion to regulate the use of real property to serve the legitimate interests of the general public.”

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