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High Court Won’t Touch Affordable-Housing Rule

WASHINGTON (CN) - The Supreme Court refused to take up a case over mandated affordable housing, but Justice Clarence Thomas warned Monday that the issue is ripe for scrutiny.

San Jose, California, enacted the law at issue in 2010 - requiring developers of new residential areas that contain 20 or more units to sell at least 15 percent of the units at a price that low- to moderate-income families can afford.

Before the law had even taken effect, the California Building Industry Association filed suit under "the unconstitutional conditions doctrine," claiming that the city failed to demonstrate that new, 20-unit developments exacerbated the city's affordable-housing problem. Even if there were evidence of this, the association questioned how the city's new requirements were reasonably related to this.

Though a judge in Santa Clara enjoined the law, an appeals court later reversed and the state Supreme Court affirmed that reversal in June 2015.

The U.S. Supreme Court refused to take up the case Monday, but Justice Thomas noted that the issue is ripe for high-court intervention.

He noted that lower courts have been divided for over two decades on how to apply precedent from the 1987 case Nollan v. California Coastal Commission and the 1994 case Dolan v. City of Tigard, both of which involved challenges to administrative actions on land use.

In this San Jose case, developers are alleging a taking in relation to "a legislatively imposed condition rather than an administrative one," Thomas wrote.

"Until we decide this issue, property owners and local governments are left uncertain about what legal standard governs legislative ordinances and whether cities can legislatively impose exactions that would not pass muster if done administratively," the opinion states. "These factors present compelling reasons for resolving this conflict at the earliest practicable opportunity.

"Yet this case does not present an opportunity to resolve the conflict. The city raises threshold questions about the timeliness of the petition for certiorari that might preclude us from reaching the takings-clause question. Moreover, petitioner disclaimed any reliance on Nollan and Dolan in the proceedings below. Nor did the California Supreme Court's decision rest on the distinction (if any) between takings effectuated through administrative versus legislative action. Given these considerations, I concur in the court's denial of certiorari."

The California Supreme Court had found that San Jose's ordinance fell within the general broad discretion municipalities have to regulate the use of real property in service of legitimate public interests.

It likened the rule to designating "certain areas of a city where only residential units may be built and other areas where only commercial projects are permitted."

The Association of Bay Area Governments determined in 2008 that 60 percent of the new housing units built between 2007 and 2014 would need to be affordable for extremely low to moderate-income households.

San Jose had met only a small percentage of its regional need allocation by February 2009, the court found.

The ruling concluded with the finding that San Jose's ordinance serves a "constitutionally legitimate purpose of increasing the number of affordable housing units in the city ... and assuring that new affordable housing units are distributed throughout the city as part of mixed-income developments in order to obtain the benefits that flow from economically diverse communities and avoid the problems that have historically been associated with isolated low income housing."

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