The California Supreme Court today ruled that cities have the right to make developers build a portion of their projects for low- and moderate-income folks.
In Los Angeles, where the per-capita annual income is a measly $27,749, that's most of you.
The bad news is that the ruling applies only to for-sale housing. It does not apply to the rental business, which is where Los Angeles and the rest of the state really need relief.
A UCLA study last year found that Los Angeles had the least affordable rental housing in America.
In 2009 the court ruled in favor of L.A. developer Geoffrey Palmer, who challenged a city regulation that required apartment builders to offer a portion of their units at “below-rate” rents. Today's ruling notes that the Palmer case is not affected, and that only for-sale units can be targeted when cities want to enforce affordable-housing provisions.
The latest case came down to this: The California Building Industry Association challenged the city of San Jose's rule mandating that a portion of for-sale units in new developments be made affordable.
The court concluded:
… There is no reason why a municipality may not alternatively attempt to achieve those same objectives by requiring new developments to set aside a percentage of its proposed units for sale at a price that is affordable to moderate- or low-income households.
The building association said it was keeping its legal options open. It appears its main option would be attempting to take the case to the U.S. Supreme Court.
Here's part of a statement sent to us by the group today:
The homebuilding industry, and by extension new-home buyers, are now being required to solve a problem not of their creation. This fuels the tortured logic that we can make housing more affordable by making it more expensive.
Making housing affordable is a societal problem that requires a broad-based, fairer solution.
The organization says that regulatory obstacles stand in the way of meeting California's demand for housing. The argument suggests that too many government constraints are the problem.
Affordable-housing advocates were pleased with today's ruling, however. UCLA professor of urban planning Paul Ong told us, “I think it's good news.”
Robert Dhondrup of the Southern California Association of Non-Profit Housing said, “We’re satisfied that the court ruled that mixed-income housing stands constitutionally.”
He said the ruling could support legislation to overturn the Palmer decision and allow cities to require affordable rental units again. Last year Gov. Jerry Brown vetoed just such a bill.
“It is a necessary step toward getting a legislative fix on the Palmer decision,” Dhondrup said.
Rob Wilcox, a spokesman for the Los Angeles City Attorney's Office, said its lawyers were reviewing today's decision to help determine how it might affect L.A.'s own rules for developers.