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Supreme Court Must Review California Property Ruling

Oct 27, 2015 | by William Perry Pendley

DENVER, CO.  A western public-interest legal foundation with decades of experience challenging unconstitutional bars on the right to own and use property today urged the Supreme Court of the United States to review a ruling from the California Supreme Court that those seeking to develop their property must build “affordable housing.”  Mountain States Legal Foundation (MSLF) advised the Court that a petition for writ of certiorari filed by the California Building Industry Association (CBIA) as part of its challenge to demands made of landowners by the City of San Jose must be granted.  The California Supreme Court, in rejecting the CBIA’s challenge to the constitutionality of the San Jose ordinance, relied on rulings by itself and other California courts and the dissent in major Supreme Court decisions regarding the Takings Clause.  Citing its long history of defending the right to own and use property and noting that the right is central to the ability of its members’ ability to earn a living, MSLF labeled the California ruling “a serious departure from settled Takings Clause jurisprudence.”

“The California Supreme Court erred in ruling legislatively imposed exactions are exempt from heightened review under the unconstitutional conditions doctrine,” said William Perry Pendley, MSLF president.

In 2010, San Jose, California adopted Inclusionary Housing Ordinance No. 28689, San Jose Municipal Code chapter 5.08 in response to a purported shortage of affordable housing.  The Ordinance requires that new residential development projects of 20 or more units sell at least 15% of the units at an “affordable price” for low or moderate income households.  Or the developers may construct off-site affordable units, pay in lieu fees based on the median sale price of a housing unit, dedicate land of equal value to the in lieu fee, or acquire and rehabilitate a comparable number of low income housing units. 

Because the Ordinance violates the Takings Clauses in the U.S. and California Constitutions, the CBIA challenged the Ordinance on its face.  In 2013, a California trial court invalidated the Ordinance and enjoined San Jose from enforcing it unless and until the city proves a “reasonable relationship[] between [the Ordinance] and impacts caused by new development.”  The California Court of Appeals reversed, holding that CBIA had the burden to prove that the Ordinance was invalid and not San Jose’s burden to prove it had authority to promulgate the Ordinance.  The California Supreme Court affirmed the Court of Appeals’ ruling, holding that municipalities are afforded broad authority pursuant to their general police powers to regulate the use of real property and to promote the public welfare.  The court also held that the Ordinance violate neither the federal nor the state Takings Clause. 

Mountain States Legal Foundation, created in 1977, is a nonprofit, public-interest legal foundation dedicated to individual liberty, the right to own and use property, limited and ethical government, and the free enterprise system.  Its offices are in suburban Denver, Colorado.

For more information:  California Building Industry Association v. City of San Jose


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