Conservatives Are Nudging The Supreme Court to Dismantle Affordable Housing Policies

Originally published in The Intercept on June 25, 2019.
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WHEN IT COMES to conservatives and the U.S. Supreme Court, abortion and labor rights are often considered among their prime targets. Brett Kavanaugh’s ascension to the court last fall, though, opened the road for a host of other challenges for which conservatives have quietly been laying the groundwork for years. This month, the Pacific Legal Foundation, a conservative law firm based in California, made moves on one of those fronts, asking the Supreme Court to take up a case challenging the constitutionality of inclusionary zoning — a popular tool cities and states employ to increase affordable housing and promote residential integration.

Inclusionary zoning generally works by requiring real estate developers to reserve a certain number of units in new housing complexes for tenants who live on more modest incomes; some jurisdictions also allow developers to alternatively pay a fee so the city can construct more affordable housing elsewhere. Conservatives argue that the policy effectively violates a provision of the Fifth Amendment that says private property cannot be taken without just compensation.

This is the Pacific Legal Foundation’s third attempt to bring an inclusionary zoning challenge before the Supreme Court. Its previous efforts, in 2015 and 2017, were both dismissed, but legal experts say that with Kavanaugh now seated on the high court, it is more likely the case will find an audience — and be resolved in favor of conservatives.

The law firm is representing an elderly couple — Dart and Esther Cherk — in Marin County, California, who wanted to divide their 2.79 acres of land into two developable lots. They hoped to sell half of their land to supplement their retirement. In 2000, they applied for a permit, and in the time it took to get their permit, the local law changed such that the couple now had to pay Marin County $40,000 as an affordable housing fee to proceed. They paid, but then demanded a refund, calling the payment unconstitutional.

“Rather than respect property rights and allow a free market in land use, Marin County (and other California cities) have concocted counterproductive ‘affordable housing’ programs by which they collect fees from people like the Cherks (who are actually trying to create new building lots) and stuff it into government coffers for government programs that will allegedly make housing more ‘affordable,’” wrote Larry Salzman, a Pacific Legal Foundation attorney leading the case.

Inclusionary zoning is a land-use policy, first developed in Montgomery County, Maryland, in the 1970s, as a way to foster mixed-income communities. Since it was enacted, the inclusionary zoning policy in Montgomery County has been used to build more than 11,000 new affordable units. By the end of 2016, according to Grounded Solutions Network, 886 jurisdictions in 25 states and Washington, D.C., had also adopted inclusionary zoning policies. And it’s still spreading: This past spring, the New Orleans City Council passed a mandatory inclusionary zoning law to boost affordable housing in the city’s most desirable neighborhoods.

Some real estate developers and economists bemoan inclusionary zoning, arguing that it actually decreases housing affordability by making it more expensive to build market-rate units. This is a concern leaders take seriously, especially in places like California, which is grappling with soaring housing costs driven largely by a scarcity of available units. Still, other experts say that fear is overblown, or can be mitigated with careful program design.

THAT THE PACIFIC Legal Foundation is trying to eliminate a legal tool used by policymakers to promote residential diversity comes as little surprise to those in the civil rights community. The Pacific Legal Foundation has challenged a host of liberal policy ideas in court, including affirmative actionthe Voting Rights Actbilingual education, and school integration.

Their case, as Salzman explains, is built on the idea that Marin County’s inclusionary zoning program violates Supreme Court precedent that protects property owners from being forced to pay extortionate permit fees. Since the couple splitting their lot wouldn’t be exacerbating the local affordable housing crisis — and arguably would be helping to ameliorate it since they’d be increasing supply in an area that desperately needs more housing — “they can’t lawfully be charged a fat fee to solve the region’s so-called ‘affordable housing’ problem,” argues Salzman.

Thomas Silverstein, a fair housing attorney at the Lawyers’ Committee for Civil Rights Under Lawsaid it’s likely the Supreme Court will eventually take up an inclusionary zoning case, even if not this one. “It seems it’s just part of Pacific Legal Foundation’s agenda to be consistently developing a pipeline of potential challenges, bringing them up and bringing them up, and hoping one day they’ll crack through,” he said.

In 2015, Justice Clarence Thomas signaled his interest in taking up a future inclusionary zoning case, writing a concurrence that stated the inclusionary zoning case they were denying to review “implicates an important and unsettled issue under the Takings Clause.” Kavanaugh’s record on property rights and the Takings Clause is more limited, in part because he was previously on the bench at the D.C. Circuit, where those kinds of cases came up far less often. Still, his notorious record on civil rights was flagged by the NAACP Legal Defense and Educational Fund at the time of his nomination. Last summer they warned that confirming him to the Supreme Court “would threaten the government’s ability to use race to promote diversity and halt discrimination.”

This is the final week of the Supreme Court’s current session, and the court won’t decide whether to hear the zoning case until it reconvenes in the fall. The court’s decision could rest on whether it finds the facts of the case to be representative of questions around inclusionary zoning writ large, Silverstein noted. On the one hand, the Pacific Legal Foundation picked a case with a relatively sympathetic set of plaintiffs; it’s not some rich real estate developer building a high-rise tower but rather a couple looking to retire who would not be hurting Marin County’s affordable housing crisis by splitting up their land. “I think the flip side of this is, you could also imagine the court looking at these facts and saying this is a really unique situation, and if we’re going to take up the issue of whether inclusionary zoning is constitutional, it makes more sense to do it when the facts in front of us are more typical,” Silverstein said.

A KEY CONSTITUTIONAL question for the court, Silverstein said, will be whether inclusionary zoning amounts to a constitutional regulation of how property is used or an unconstitutional taking of property from a property owner. Another question will be whether past legal precedent applies to legislative ordinances, as opposed to ad hoc or administrative decisions. The three big Supreme Court cases that the Pacific Legal Foundation is basing its new argument on — Dolan v. City of Tigard, Nollan v. California Coastal Commission, and Koontz v. St. Johns River Water Management District — were all centered on administrative decisions.

In the 5-4 Koontz decision authored by Justice Samuel Alito in 2013, the U.S Supreme Court ruled that a water management district in Florida had imposed illegal conditions on an entrepreneur’s application to build a shopping center. The proposed shopping center was to be located on a swath of wetlands, and the water management district said the entrepreneur could either reduce the size of his project or spend money on wetlands restoration efforts to mitigate the project’s environmental impacts. The entrepreneur refused, calling the conditions unreasonable, and the Supreme Court agreed.

In the dissent, Justice Elena Kagan objected to the idea that a requirement to pay money to repair public wetlands amounts to a taking of private property, and noted that the court has already held that taxes do not amount to a violation of the Fifth Amendment. “Once the majority decides that a simple demand to pay money—the sort of thing often viewed as a tax—can count as an impermissible ‘exaction,’ how is anyone to tell the two apart?” she wrote. “In short, the District never made a demand or set a condition—not to cede an identifiable property interest, not to undertake a particular mitigation project, not even to write a check to the government. Instead, the District suggested to Koontz several non-exclusive ways to make his applications conform to state law. The District’s only hard-and-fast requirement was that Koontz do something—anything—to satisfy the relevant permitting criteria.”

Pacific Legal Foundation appears to be modeling its legal argument around the decision in Koontz. The group “has been very careful to frame their cases around a fee; they want it to seem as much like Koontz as possible, where it’s considered an unconstitutional fee from the start,” said Silverstein. “But if you say instead that there’s a requirement to provide affordable housing, and if you don’t want to provide affordable housing, you can get out of that obligation by paying a fee, that makes their case look much less like Koontz and more like a land-use regulation that might be permitted under Euclid v. Ambler, which effectively upheld zoning. If a fee is seen instead as an opt-out, it’s almost like you’re doing a nice thing for the property owner.”

Even as conservatives have raised constitutional challenges to inclusionary zoning in recent years, cities and states have not held back on moving forward with inclusionary zoning out of fear of their laws being struck down on the federal level. A Supreme Court dismissal of the new petition would reinforce the message that the proactive steps many jurisdictions have already taken to use inclusionary zoning are lawful and legitimate. Alternatively, if the court did take up the case and ruled in Marin County’s favor, that would also send a strong signal that jurisdictions can continue to pass inclusionary zoning mandates.

“The problem,” said Silverstein, “is we have a Supreme Court that is very skewed toward the petitioners in this case, and there’s a real risk they would decide the case the other way and upset the applecart.”

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