In California Building Industry Association v. City of San Jose, the California Building Industry Association (CBIA) challenged the city of San Jose’s inclusionary housing ordinance, which requires developers to comply with certain affordability conditions for all new residential development projects of 20 units or more. CBIA argued that the ordinance imposes an “exaction” on developers’ properties, requiring heightened judicial scrutiny under the takings clauses of the United States and California constitutions.
The California Supreme Court disagreed with CBIA, holding that the inclusionary housing ordinance is not a taking of private property for public use such that it is subject to heightened judicial scrutiny. Rather, the Court held that the ordinance is a legislative land-use measure that survives a constitutional challenge as long as it bears a reasonable relationship to the public welfare. Applying the more deferential standard, the Court concluded that San Jose’s ordinance is constitutional because it is reasonably related to the public welfare.
CBIA appealed the case to the United States Supreme Court, but the United States Supreme Court declined to review the case, leaving intact the California Supreme Court decision and, in turn, San Jose’s inclusionary housing ordinance. Notably, Justice Clarence Thomas filed an opinion concurring in the Court’s decision to deny review. Thomas expressed interest in reviewing a case where the precise issue before the court is whether the constitutional takings test established in Nollan v. California Coastal Commission and Dolan v. City of Tigard applies in cases where the alleged taking arises from a legislatively-imposed condition rather than a discretionary one, an issue which he noted is unsettled in the lower courts.
The League wishes to thank Tom Brown of Burke, Williams & Sorensen for drafting the League’s friend-of-the-court brief in the California Supreme Court case.