U.S. Supreme Court Allows Inclusionary Zoning Requirement

Published by Mark Shelburne on Tuesday, November 7, 2017 - 12:00am

During a time when affordable housing professionals are rightly focused on the threats and opportunities of tax reform, other important news can sometimes go unnoticed. A recent example occurred on Oct. 30 when the nation’s highest court effectively endorsed the concept of mandatory inclusionary zoning.

The story began when a couple applied to the City of West Hollywood to develop 11 condominiums. The city approved the request subject to its policy of requiring developers either

  • make some units affordable or
  • pay a fee in lieu of doing so.

In this case the latter was $540,000, which the developer paid under protest before filing a lawsuit in California state court. Ultimately the city prevailed in the state-level litigation.

The developer, supported by advocacy organizations, appealed to the U.S. Supreme Court. They claimed policy violated the Constitutional prohibition against governments taking private property without just compensation. The city responded with arguments why the case should not be reviewed.

Without providing an explanation, the court declined to hear the case. In so doing the justices not only left intact the lower courts’ decisions in favor of the city, they made clear other such claims would not move forward. Developers facing similar requirements have no realistic hope of making a Constitutional challenge.

This outcome would be significant if even limited to California, but the consequences matter across the country. A recent study identified 889 jurisdictions with inclusionary zoning. Among these are both mandatory and incentive-based policies (e.g., density bonuses). All of those using requirements, like West Hollywood, were in jeopardy pending a different outcome of the case.