“This is a very disappointing decision from the standpoint of property rights generally, and specifically for those who want to build homes for the public, and for people who aspire to buy a new home,” said PLF Senior Staff Attorney Tony Francois. “The ruling allows government to impose financial penalties on providers of new housing — a penalty that can only deter efforts to ease the state’s housing shortage, and make it even harder and costlier for average families to afford a home in California. Even more broadly, the decision exposes every homeowner and property owner in California to limitless potential fees and other property demands any time they ask for a permit of any kind, because the local government is allowed to use the permit process to raise money for any purpose whatsoever, whether it relates to the property owner or not. Consequently, we are considering all of the issues involved and with our clients we are reviewing all legal options.”
Donor-supported PLF is the leading watchdog organization that litigates for limited government and property rights nationwide. In challenging the San Jose ordinance, PLF represents the California Building Industry Association — free of charge, as with all PLF clients.
The ordinance at issue requires builders of developments with 20 homes or more to set aside 15 percent of the new units at below-market prices. As an alternative, a builder would have to pay an “in lieu” fee of $122,000 for each of the below-market units that would otherwise have to be supplied.
PLF’s challenge argues that the ordinance violates constitutional property rights because it imposes a financial penalty on builders with no showing that their new home construction creates a need for new affordable housing. In essence, the program transfers the cost of “affordable” units from the public generally to homebuilders (and to the buyers of new, market-priced homes).
The case is California Building Industry Association v. City of San Jose. More information, including PLF’s briefs and a blog post on today’s ruling, may be found at: www.pacificlegal.org.
About Pacific Legal Foundation
Donor-supported PLF (www.pacificlegal.org) is the leading watchdog organization that litigates for limited government and property rights in courts nationwide. PLF represents all clients without charge.