Supreme Court May Review Inclusionary Zoning

Cars drive over the Golden Gate Bridge on Aug. 2, 2018 in Marin County, California. Justin Sullivan/Getty Images

The Supreme Court may soon test the constitutionality of the inclusionary zoning ordinance, a tool that local governments in tight housing markets such as those in California use to force developers to expand the supply of affordable housing.

Inclusionary zoning policies typically compel or encourage developers to earmark a percentage of housing units in new or rehabilitated projects for low- and moderate-income residents. Alternatively, developers can be made to contribute to a fund whose proceeds can be used to produce affordable housing.

The plaintiffs filed a petition for certiorari, or review, with the Supreme Court on June 11 in the case, which is cited as Cherk v. County of Marin. The county is required to file a response by Oct. 16, after which the court could rule on the petition at any time. The Trump administration hasn’t weighed in on the issue. As of press time, the administration hadn’t filed a brief in the case.

If the Supreme Court decides to hear the case, which is an appeal from a ruling by the California Court of Appeal, the high court could use the legal matter to reinforce property rights, something it did in a June 21 ruling in a case known as Knick v. Township of Scott, Pennsylvania. As The Epoch Times previously reported, the conservative wing of the court overturned a 34-year-old precedent and made it easier for property owners to seek legal redress in federal courts without first having to file suit in state courts after their property is taken.

The new case pertains to an elderly couple who have filed against officials in Marin County, California, whose policies make it difficult to develop real estate, as well as pitting property-rights advocates against social-justice activists.

“Everyone agrees that California has sky-high home prices and an affordable-housing crisis,” but “this crisis exists because government, instead of allowing more home construction, burdens property owners and developers with costly and counterproductive regulations,” Oliver Dunford, an attorney with the Sacramento-based Pacific Legal Foundation, which is representing the plaintiffs, wrote in a Sept. 25 op-ed in The Hill newspaper.

Housing isn’t considered affordable in Marin County.

Although home values have dropped slightly over the past year in the county, the median home value there is currently $1,109,300, up from $649,000 in September 2011, according to Zillow. The median list price per square foot in the county is $632, which beats the $493 average in the famously tight housing market of the San Francisco-Oakland-Hayward Metro area. The median rent price in the county is $4,300, which, again, is well above the median of $3,410 for the San Francisco-Oakland-Hayward Metro area.

The case goes back to 2000 when Dartmond and Esther Cherk applied to Marin County for permission to divide a vacant 2.8-acre parcel of land into two single-family residential lots. Their intention was to sell one of the lots to finance their retirement.

In 2003, while the permitting process was still underway, the county amended the Marin County code. The amended regulations required the Cherks to “pay an in-lieu fee” to the county to support affordable housing. Eventually, after finding dividing the land “would result in a future increase in the availability of housing opportunities in an existing residential area,” the county approved the subdivision in December 2007 but conditioned approval on the Cherks paying a nearly $40,000 in-lieu fee, despite the positive expected impact on the local housing market.

After getting multiple extensions of time to pay the fee, in July 2015, the Cherks paid the fee under protest. But in February 2016, the Cherks had their attorney write a letter to the county demanding a refund of the fee, which lawyers call an exaction.

Such exactions turn into a form of extortion “unless the permit condition serves the same governmental purpose as the development ban,” the Supreme Court ruled in Nollan v. California Coastal Commission (1987).

The county didn’t respond to the Cherks’ demand for a refund, so in August 2016, they filed suit arguing the payment constituted an unconstitutional condition under the doctrine laid down by the Supreme Court.

According to Dunford, “governments can’t use a permit process to extort money from property owners by imposing conditions that have nothing to do with the proposed development. But governments such as Marin County keep trying.”

Thomas Silverstein of the Lawyers’ Committee for Civil Rights Under Law supports inclusionary zoning.

He told CityLab that “removing the ability or severely limiting the ability of local governments to engage in inclusionary zoning really is a racial justice issue, because it prevents effectively in many instances the fulfillments of ... civil rights requirements.”