The Supreme Court on Monday declined to hear a case challenging the way local government across the U.S. deal with home developers.
Cherk v Marin County. is a lawsuit brought by Dart and Esther Cherk against Marin County, California, in which the pair challenged the county government's $40,000 fee to subdivide a vacant plot of land they owned and had hoped to sell.
The fee was part of a Marin County ordinance that requires people subdividing parcels of land to either devote a portion of that land to affordable housing or else pay an in-lieu affordable housing fee.
The intention of the law was to combat the sky-high housing costs in Marin County, which is located just north of San Francisco. The Cherks countered that subdividing their land did nothing to make housing less affordable, and therefore there was no reasonable relationship between the fee they were being charged and the problem the county was trying to address.
"When government conditions a building or other permit there has to be some relationship between the condition and the demand. They can't just make unreasonable demands," says Jeffrey McCoy, an attorney with the Pacific Legal Foundation, which represented the Cherks.
If a new business development were likely to increase traffic, a local government would have the right to require the developer create a traffic mitigation plan before granting them a permit, McCoy says. But the county couldn't require the developer to plant more trees.
Similarly, without showing that reasonable relationship between subdividing their lot and housing prices, says McCoy, the government was placing an unconstitutional condition on the Cherks' lot split in violation of the Fifth and 14th Amendments.
This argument has significance well beyond just the Cherks: it could potentially be used to invalidate hundreds of "inclusionary zoning" ordinances passed by local governments across the country.
These policies differ in their specifics but they typically require private developers to rent a portion of new units in their projects to lower-income renters. Local governments have used this policy as a way of creating affordable housing without having to pay for it out of public coffers.
Recent research suggests that inclusionary zoning is not very effective at achieving its goals. One study, published by George Mason University's Mercatus Center, found that these laws just encourage developers to build more profitable but harder-to-lease luxury buildings, with the higher rents being used to recoup the costs of the below-market units they're forced to build.
If the Cherks had been able to get their case before the Supreme Court and convince a majority of the justices to rule in their favor, local governments around the U.S. would no longer be able to condition permits on the creation of affordable units. This is broadly the standard the Supreme Court has taken in past land use cases, holding that regulatory requirements put on building permits must bear a rational, proportional relationship to the impacts they seek to mitigate.
Lower courts, however, have been reticent to apply this test to inclusionary zoning ordinances, reasoning that these laws are not intended to mitigate the effects of new development, but are instead meant to further the government's legitimate interest in making housing affordable.
Both the Marin County Superior Court and the California Court of Appeals deployed this reasoning in their rulings siding with Marin County, saying that the development fees it had imposed on the Cherks were well within the county's ability to regulate land use.
Now that the Supreme Court has declined to take up the case, those lower court rulings stand. CityLab noted back in October that the court has passed on several other opportunities to take up cases involving inclusionary zoning.
McCoy says that he hopes the Court returns to these land use issues again. The current regime gives the government far too much power over people's property, he says.