In a decision that may have far-reaching impacts, California's Supreme Court ruled last week that the City of Palo Alto's inclusionary housing requirement is an exaction rather than a land use regulation, reports William Fulton.
"The California Supreme Court has ruled that an inclusionary housing requirement is an exaction rather than a land use regulation – a distinction that means inclusionary housing could be judged by the same nexus and proportionality requirements as other exactions,"
"The Supreme Court did not decide the merits of the case, in which [developer] Sterling Park challenged [Palo Alto's] inclusionary housing ordinance as an impermissible use of the city’s power to impose exactions in exchange for land-use permits," notes Fulton. "Instead, it remanded the case to the Sixth District Court of Appeal for that decision."
"However, the Supreme Court’s ruling certainly sets the stage for a possible ruling that would outlaw or significantly rein in inclusionary housing ordinances. Under exaction law, a jurisdiction seeing to impose an inclusionary housing requirement on a developer would have to prove a strong nexus between the construction of the project and the need for affordable housing."
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