Appellate Court Reverses Trial Court Invalidation Of Local Inclusionary Ordinance; Remanded For Further Review

By William W. Abbott

In California Building Industry Assn. v. City of San Jose (June 6, 2013, H038563) ___ Cal.App.4th ___, the City of San Jose adopted an inclusionary ordinance, requiring that new residential projects include units affordable to specified income ranges. Alternatively, the ordinance permitted the developer to pay an in lieu fee or dedicate land. The California Building Industry Association (“CBIA”) filed suit, challenging the validity of the ordinance on its face on the basis that the ordinance lacked any nexus to the deleterious effects of new residential development. CBIA did not allege that a compensable takings had occurred, but rather argued that the City lacked sufficient justification for the ordinance. The trial court agreed with CBIA and invalidated the ordinance. The City appealed.

On appeal, the critical issue was the standard of review. CBIA argued that some form of heightened scrutiny applied, whereas the City took the position that a reviewing court should apply the traditional deferential review (rational basis standard) typically used when courts are asked to overturn an ordinance on the grounds that the enactment exceeded the police power. The Court of Appeal, Sixth Appellate District, reversed. The court concluded that San Remo Hotel L.P. v. City and County of San Francisco (2002) 27 Cal.4th 643 did not apply, as the issue in San Remo was a regulation drafted to mitigate the impacts of hotel conversions. The appellate court concluded that the ordinance in question was not adopted for purposes of mitigating impacts, but to further the public health, safety and welfare and as such, would be reviewed under a less rigorous standard. Noting that a challenger to an ordinance had an uphill climb to overcome the presumption of validity, the matter was remanded to the trial court for further proceedings.

William W. Abbott is a partner at Abbott & Kindermann, LLP. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, LLP at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, LLP, nor the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.

 

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