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U.S. Supreme Court Lets San Jose Affordable Housing Law Stand

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One South Market is one of the newest additions to San Jose's downtown skyline. Because of a Supreme Court ruling Monday, San Jose can still require new developers to set aside some of their units for sale below market value. (Rachael Myrow/KQED)

The U.S. Supreme Court declined Monday to take up a challenge to San Jose's affordable housing law.

In 2010, San Jose required that all new residential developments of 20 units or more set aside 15 percent of those units for sale below market rate. Developers could also pay a fee in lieu of creating affordable units. That's a pretty common tactic, known as "inclusionary zoning."

The League of California Cities and California State Association of Counties estimate that more than 170 municipalities have some kind of inclusionary zoning ordinance on the books. Both groups backed San Jose in the case.

The California Building Industry Association sued, arguing that the ordinance amounted to an unconstitutional taking of property. Last year, the California Supreme Court upheld the law and the building association appealed to the U.S. Supreme Court.

Since the U.S. Supreme Court declined to take the case, the state ruling upholding inclusionary zoning stands.


Justice Clarence Thomas wrote in the dismissal that the law remains "unsettled" but that the technicalities of the case made it difficult to try.

"Until we decide this issue, property owners and local governments are left uncertain about what legal standard governs legislative ordinances and whether cities can legislatively impose exactions that would not pass muster if done administratively," Thomas wrote.

The Pacific Legal Foundation, which represented the building association, released a statement saying that law penalizes developers and raises overall home prices:

"As a practical matter, San Jose’s costly demands on homebuilders mean that fewer homes get built, and the price of market-rate homes goes up, squeezing more and more buyers out of the market. As a constitutional matter, there is no excuse for forcing property owners — in this case, the builders of new homes — to foot the bill for problems they didn’t cause, such as the affordable housing shortage."

City officials are celebrating the decision.

"I’m happy to see that we can finally implement inclusionary housing city wide," Liccardo told KQED's Peter Jon Shuler.

Read the Supreme Court's dismissal:

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