Urban Lawyer

Inclusionary Zoning as a Taking: A Critical Look at its Ability to Provide Affordable Housing

by Jai Keep-Barnes

Jai W. Keep-Barnes is a third-year law student attending the William S. Richardson School of Law at the University of Hawai’i at Ma¯noa. Jai would like to thank Professor David Callies for his help in preparing this article, as well as his classmates of the graduating class of 2017. Finally, Jai would like to thank his family and Dannah Gonzales for their unconditional support.


CALIFORNIA’S HEALTH AND SAFETY CODE SECTION 50003.3 STATES THAT

“The Legislature finds and declares that … there exists within the urban and rural areas of the state a serious shortage of decent, safe, and sanitary housing which persons and families of low or moderate income … can afford. This situation creates an absolute present and future shortage of supply in relation to demand … and … by reason of its scarcity which tends to decrease the relative affordability of the state’s housing supply for all its residents.”1

The lack of affordable housing in California, acknowledged and embodied in the statute in the late 1970s, has become even more severe. As noted in a report prepared by The Legislative Analyst Office (“LAO”), beginning around 1970, a noticeable gap between the housing prices in California and the prices in the rest of the country became apparent.2 Specifically, the report found that between 1970 and 1980, California’s home prices jumped from 30% above U.S. levels to more than 80%, and that today, the price of a home in California is about “two-and-a-half times the average national home price.”3

In response to the critical shortage of affordable housing in California, more than 170 California municipalities have enacted what are known as “inclusionary zoning” or “inclusionary housing” programs (referred to throughout this paper as inclusionary zoning).4 In 2010, the City of San Jose (hereinafter sometimes referred to as “the City” or “San Jose”) enacted its own inclusionary zoning ordinance, requiring all new residential development projects of twenty or more units to sell at least fifteen percent of the for-sale units at a price that is affordable to low or moderate-income households.5 Subsequently, California Building Industry Association (“CBIA”) sued San Jose, alleging that the ordinance was invalid on its face.6 CBIA asserted that the ordinance would be valid only if the city produced evidence demonstrating that the requirements of the ordinance were “reasonably related” to the adverse impact on the city’s affordable housing problem “that was caused by or attributable to the proposed new developments that are subject to the ordinance’s requirements.”7

The initial lawsuit made its way to the Supreme Court of California in 2015, and on June 15, 2015, the court held that the San Jose inclusionary zoning ordinance was a valid exercise of the city’s police power, rather than a development exaction subject to heightened scrutiny.8 Comparing the inclusionary zoning ordinance to other land use restrictions, such as height limits and setback requirements, the court concluded that the ordinance fell within municipalities’ “general broad discretion to regulate the use of real property to serve the legitimate interest of the general public[.]”9 Therefore, classified as a regulation of land and subjected to a deferential standard of review, the court held the San Jose inclusionary zoning ordinance to be facially valid.10

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