Could the U.S. Supreme Court End Inclusionary Zoning?

Could the U.S. Supreme Court End Inclusionary Zoning?

The U.S. Supreme Court is poised to address the constitutionality of an increasingly popular affordable housing tool – inclusionary zoning

The U.S. Supreme Court is poised to address the constitutionality of an increasingly popular affordable housing tool — inclusionary zoning. The justices have been asked to consider Cherk v. Marin County, which involves whether Marin County violated the unconstitutional-conditions doctrine by requiring property owners to pay a $39,960 “affordable housing” fee as a condition of receiving a permit to change the use of their land.

Facts of the Case

As discussed in prior articles, inclusionary zoning is an affordable housing tool that ties the creation of affordable housing to the creation of market-rate housing, with the goal of encouraging new residential developments to make a certain percentage of the housing units affordable to low or moderate-income residents.  Many inclusionary zoning programs include measures to encourage development, such as density bonuses that allow the developer to build more units than allowable under conventional zoning, or streamlined permitting that allows developers to build more quickly. Under some ordinances, developers can select one of several alternatives, such as payment of an in-lieu fee or constructing affordable off-site units in another project.

Marin County applied its inclusionary housing ordinance to require Dartmond Cherk and the Cherk Family Trust (the Cherks) to pay a $39,960 “affordable housing” fee as a condition of receiving a permit to split their undeveloped residential lot in two. It was undisputed that the Cherks’ lot-split neither caused nor had an adverse impact on the county’s affordable housing shortage. Rather, it increased the land available for affordable housing purposes.

The Cherks filed suit, contending that the fee is invalid under the “unconstitutional conditions doctrine,” established by the U.S. Supreme Court in Nollan v. California Coastal Commission, 483 U.S. 825 (1987) (Nollan) and Dolan v. City of Tigard, 512 U.S. 374 (1994) (Dolan). Under the doctrine, the government can’t condition a person’s receipt of a governmental benefit on the waiver of a constitutionally protected right.

Supreme Court precedent has established “a ‘special application’ of this doctrine that protects the Fifth Amendment right to just compensation for property the government takes when owners apply for land-use permits.” Koontz v, 570 U.S. 595 (2013). As set forth in Nollan and Dolan, conditions imposing monetary exactions or dedications of property must bear an “essential nexus” and “rough proportionality” to adverse public impacts of the proposed development.

In Koontz, the Court extended the Nollan/Dolan test to apply to government demands for money as a condition for a land-use permit, holding that they too must satisfy the nexus and rough proportionality requirements. However, the Court agreed that “so long as a permitting authority offers the landowner at least one alternative [to the money condition] that would satisfy Nollan and Dolan, the landowner has not been subjected to an unconstitutional condition.”

The California Court of Appeals relied on the Supreme Court’s decision in Koontz in siding with the County. It held that the unconstitutional conditions doctrine is inapplicable because the Cherks could have avoided the fee by satisfying the inclusionary housing program in an alternative way. The court further held that the tests set out in Nollan, Dolan, and Koontz do not apply because the County’s demands were not intended by the County to mitigate any adverse public impacts of the Cherks’ lot-split, but rather “‘to advance purposes beyond mitigating the impacts . . . attributable to [their] particular development.’” In addition, the court concluded that that “‘legislatively prescribed monetary fees’—as distinguished from ad hoc monetary demands by an administrative agency—‘that are imposed as a condition of development are not subject to the Nollan/Dolan test.’”

Issues Before the Supreme Court

In their petition for certiorari, the plaintiffs asked the Supreme Court to answer the following questions:

1. Whether permit conditions are exempt from review under the unconstitutional-conditions doctrine when their intended purpose is not to mitigate adverse impacts of a proposed development but to provide unrelated public benefits?
2. Whether the unconstitutional-conditions doctrine applies to such permit conditions when imposed legislatively, as the high courts of Texas, Ohio, Maine, Illinois, New York and Washington and the First Circuit Court of Appeals hold; or whether that scrutiny is limited to administratively imposed conditions, as the high courts of Alabama, Alaska, Arizona, California, Colorado, and Maryland and the Tenth Circuit Court of Appeals hold?

There is no guarantee that the Supreme Court will agree to consider the case. However, the justices have shown that they are willing to wade into contentious property disputes, including those that involve controversial zoning regulations.

If the Supreme Court does grant certiorari in Cherk v. Marin County, its decision could have widespread consequences. As of 2016, 886 jurisdictions in 25 states and the District of Columbia have inclusionary housing programs. The high-profile case has already generated several amicus briefs, including those filed by the National Association of Homebuilders and the California Association of Realtors.

The attorneys of the Scarinci Hollenbeck Land Use Law Group will continue to monitor the case. You can also find additional Supreme Court coverage on the Constitutional Law Reporter.

If you have questions, please contact us

If you have any questions or if you would like to discuss the matter further, please contact me, Don Pepe, or the Scarinci Hollenbeck attorney with whom you work, at 201-806-3364.