May 2010 Archives

Affordable housing mandates must comply with state law

May 25, 2010

Ben Reznik

Two recent court decisions have materially changed the affordable housing game as it's been played by local governments throughout California.

In Palmer/Sixth Street Properties, L.P. et al. v. City of Los Angeles (a case in which JMBM represented the developer at all the administrative hearings), the California Court of Appeal upheld our challenge to a Los Angeles affordable housing mandate in the city's Central City West Specific Plan on the basis that it violated the state's Costa-Hawkins Housing Act. Los Angeles had attempted to impose a 15 percent affordable housing requirement on Palmer's 335-unit Piero II development. This would have effectively reduced the rental income from the project violating Costa-Hawkins, which prohibits cities from applying rent control to new projects. In the other case, Building Industry Association of Central California v. City of Patterson, the Court of Appeal invalidated an in-lieu affordable housing impact fee being assessed on a single family for-sale residential project. The court found that the fee, which the city had increased from $734 to $20,946 per unit, bore no relationship to the actual impact the development would have on the community.

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