Supreme Court Refuses to Protect Inclusionary Housing

State Legislation Urgently Needed to Protect Affordable Housing Laws

by Dean Preston

California’s Supreme Court last week continued the judicial assault on affordable rental housing in communities across California. The Court denied review of Palmer / Sixth Street Properties v. City of Los Angeles -- an unprecedented and erroneous appellate court ruling that the state’s Costa Hawkins Act preempts a local inclusionary housing law in Los Angeles. Any hope that the Supreme Court would step in to correct this harmful appellate decision has now vanished. We need legislation to reverse Palmer, and we need it now.

The City of Los Angeles had filed a petition for review with the state Supreme Court seeking to overturn the erroneous appellate court ruling. Housing groups, including Tenants Together and the Tenderloin Housing Clinic, submitted an amicus brief in support of the City’s request. The Supreme Court rejected the request without explanation on October 22, 2009.

As with the original decision, there has been virtually no coverage of the Supreme Court’s decision. Few news outlets even bothered to cover the Supreme Court’s decision to leave Palmer standing, notwithstanding the fact that the decision will have devastating effects across the state.

Over 150 jurisdictions in California have some variation of inclusionary laws. As the California Coalition for Rural Housing notes, “inclusionary programs are putting roofs over the heads of tens of thousands of Californians.” Inclusionary housing laws exist are essential to the development of affordable housing, especially at a time of ever-shrinking government funds for affordable housing.

Because of the Palmer decision, inclusionary housing laws across the state are in jeopardy of being tossed out by over-zealous judges. Developers will aggressively assert the court’s decision to contest requirements that they include affordable rental housing in new residential developments.

The Palmer decision is simply wrong. The appellate court ruled that Costa Hawkins preempted an inclusionary housing law, notwithstanding clear legislative history to the contrary. The Legislature passed the Costa Hawkins Rental Housing Act in 1995 to limit the reach of local rent control laws. No appellate court has ever found that the Act preempts inclusionary housing laws, because the Act has nothing to do with inclusionary housing laws.

With affordable rental housing for tens of thousands of families at stake, it is extremely disturbing that our state’s highest court would not even deem the matter of enough significance to review the decision. It is now up to the state legislature to do what the Supreme Court should have done -- overturn the Palmer case and make clear that Costa Hawkins does not preempt inclusionary housing laws.