The California Supreme Court has sided with the city of San Jose in a case that could affect affordable housing rules all over the state.
The League of California Cities and California State Association of Counties estimate more than 170 municipalities have some kind of ordinance on the books to tackle the fact that real estate, especially in coastal markets, has become increasingly unaffordable for many renters and would-be homeowners. Both groups backed San Jose in the case.
Five years ago, San Jose tried to require that all new residential developments of 20 units or more set aside 15 percent of those units for sale below the market rate. Developers could opt out of building affordable units by paying a fee. That’s pretty common, a tactic that goes by the name “inclusionary zoning,” but the city side-stepped the usual study showing a relationship between the development of for-sale housing and the city’s need for affordable housing.
San Jose Knew It Was Breaking New Ground
“We were the largest city that was applying inclusionary housing citywide,” explains San Jose’s interim Housing Director Jacky Morales-Ferrand. “In addition to that, we used our legislative powers to impose inclusionary on developers. What we said was that because affordable housing is such a priority of the highest order, cities should have the power to legislate this requirement.”