This story was originally published by CalMatters. Sign up for their newsletters.
East Palo Alto, like cities across California, has a law on the books that forces developers of new housing projects to foot the bill for the state’s shortage of affordable homes.
New residential projects need to set aside a share of the units they plan to build for lower-income renters and homeowners under the terms of the city’s “inclusionary zoning” ordinance. Builders who refuse have to instead pay a fee, ranging from the tens of thousands to hundreds of thousands of dollars.
An East Palo Alto homeowner filed a lawsuit in federal court on Thursday challenging the constitutionality of that law, likening it to “extortion” — and he had a little help from the U.S. Supreme Court.
The implications of the lawsuit range far beyond the Bay Area. A 2017 report estimated that 149 cities and counties across California have some form of inclusionary zoning rule, though the specific terms vary. That makes it one of the most commonly used affordable housing programs both in California and in the country.
The case was filed in federal court in San Francisco by Wesley Yu, a husband and father between jobs, who was planning to build a home and backyard guest cottage for himself and his extended family on a neighboring parcel.
Because Yu was planning to construct two new structures, the city’s inclusionary zoning rules kicked in, requiring him to either sell or rent out one of the units at “affordable” rates or to pay a one-time fee of $54,891 to be deposited in the city’s affordable housing subsidy fund.
The core of Yu’s lawsuit, which was filed by the libertarian-oriented Pacific Legal Foundation, draws on a U.S. Supreme Court ruling from last year that also emerged from a heated California housing dispute.