Calif. Cities Gain Leverage In Affordable Housing Talks

Law360 (May 2, 2016) A California Supreme Court ruling that affordable housing requirements are not unconstitutional eminent domain grabs and a recent U.S. Supreme Court decision to deny review have given Golden State cities leverage in talks with developers, clarifying that municipalities can regulate affordable housing much like they do zoning, lawyers say. Giving cities broad authority to impose affordable housing requirements on development projects might have the unintended effect of actually creating less affordable housing, said Rick Friess of Allen Matkins Leck Gamble & Mallory LLP, who represents developers and landowners, as developers may decide to go out of state if their projects don’t pencil with affordable requirements California cities are seeking. “It really did make it a difficult argument for developers to say that the affordable housing is a taking," Friess said. "I was very disappointed that that’s where the California Supreme Court went. It becomes a tax on new homebuilders," he added. "You put that tax on new housing and it stops new housing from being built."