Court Upholds Exclusionary Zoning in California

But I doubt it'll hold.

When the California Legislature passed Senate Bill 9, overriding all single-family zoned lots for duplex zoning, a lot-splits for four homes total, much of the housing world rejoiced. NIMBY organizations and suburban communities shrinked back in horror at the thought of multifamily invading their neighborhoods and launched lawsuits against the state. Unfortunately, the law hasn’t materialized much development because it requires secondary units to have the property owner (i.e. the homeowner) living on-site. Rather than providing more housing, SB 9 provided political lubricant and precedent for better housing bills. Significantly stronger re-zoning bills of commercial corridors and parking lots were passed in the following years with comparatively less opposition.

Suburban cities, mostly in Southern California, sued the state on the argument that Charter Cities — cities whose governmental structure is organized by locals and not state law — could not have their zoning overridden by Senate Bill 9. This was a longshot case because legal precedent had already established the state’s authority over land use and environmental regulations. Previous rulings suggested a higher degree of local authority in the cases of charter cities but case law was clear about state authority in general. Conceding that the challenging of state authority was weak, the Los Angeles Superior Court’s discussion drifted to the phrasing of “affordable housing” in the text of SB 9. The prosecutor and suburbanite-sympathetic judge wanted to identify a contradiction in the law, thus charging the law as unconstitutional.

These are common shenanigans in the lower courts. The judiciary is often just as politically biased as the legislature and the citizenry, which has both benefited and harmed housing goals. California courts in recent years have become notably more pro-housing, even before major changes in statewide laws. Traditionally, older generations of judges and juries tended to be anti-development and supportive of suburban culture. In contrast, younger and more modern judges and juries recognize the importance of building housing, promoting infill urban development, and addressing the severity of the housing shortage.

AIDS Healthcare Foundation — one of the parties attempting to overturn state upzoning laws — very recently lost in court over this issue completely. The judiciary up to the state Supreme Court established that the state needed to increase both market-rate and subsidized housing supply and cited research to back that up. The L.A. Superior Court also acknowledged that the courts have made it clear that the state has the authority and good cause to endeavor toward these goals. Even the state Supreme Court has reinforced this during the currently on-going oral arguments regarding U.C. Berkeley and the People’s Park development.

Somehow though, the L.A. court managed to find something to hit state housing laws with. The court cited Senate Bill 9’s text, which states that the law intends to increase “affordable housing,” rather than explicitly focusing on making housing more affordable through increased supply, though that is SB 9's obvious meaning. The judge inquired what affordable housing technically meant — which the court correctly established as subsidized and deed-restricted low-income housing.

As a duplex would not be subjected to any low-income housing requirements, it did not produce “Affordable Housing”, even if it made housing more affordable overall. The judge ruled that therefore Senate Bill 9 did not increase “affordable housing” and since that contradicts its mission statement in the text of the law, the law is unconstitutional.

Judge Kin’s ruling is transparently ridiculous. I don’t know how else to describe it and most housing and legal experts who have opined on this case agree. It’s not the jurisdiction of the court to legislate based on non-binding and non-legal rhetoric in the text of a law. For this reason, I’m confident the Court of Appeals will overturn this ruling. For people considering building an SB 9 project and putting it on hold because of this ruling, I would hold my breath and go through with it.

However, the ruling does highlight what I’ve long complained about which is how painfully obnoxious the term “affordable housing” is. I’m saying this as someone who started his housing work directly in the tax-credit affordable housing nonprofit industry! This term is unclear and abused with such regularity it needs to cease in any serious housing reporting or legislation. I have functionally banned it from my writing. “Affordable” is a marketing term, generally for market goods, and is unfit and imprecise as a technical term.

In the 1990s, nonprofit developers perceived technical terms like subsidized or low-income housing as carrying negative connotations, prompting them to embrace the more appealing marketing term, “Affordable” housing. Affordable obscures its funding source — subsidized — so normal people confuse it with other market goods made by the private sector that are cheap or discounted. Affordable still means the same as subsidized, low-income housing: deed-restricted housing units to low-income applicants whose rents are below 120% Area Median Income; and “low-income” below 80% Area Median Income.

The usage of the term “affordable housing” has extended far beyond what its creators initially anticipated, becoming more abstract in its application. Now, in common parlance, it’s used as an incoherent fill-in-the-blank term to refer to the kind of housing people prefer, often unrelated to funding sources, ownership, and even rent levels and mostly in contrast to whatever is being proposed. I live in a city where people in $2 million homes complain that new apartments much cheaper than their houses aren’t “affordable” even though they’re just mad about the density.

Distinguishing low-income housing from market-rate housing with the term affordable is even more obnoxious because it ignores that even newly built market-rate housing reaches “Affordable Housing” rent levels. Census data shows that a sizable portion of new, majority market-rate developments (built within the last 10 years) have rents at or below “affordable” low-income levels throughout the country. Half of the recently built homes in the Bay Area have rents at low-income levels and one-third at rents close to “Very Low-Income” levels. (Very low income is 50% of Area Median Income; 1/3rd in the Bay are below or at 60% AMI). They’re not technically Affordable Housing because the rents are market-based, not income-based, which the term “affordable” obscures.

This ruling is a perfect lesson in why we need to drop this absurd marketing term that has infiltrated every facet of the housing discussion. Nobody knows what it means. Now we just got a law temporarily invalidated over the infiltration of imprecise, marketing language into technical documents. Toni Atkins, President pro Tempore of the California State Senate and primary author of SB 9, shrugged off the ruling by suggesting the words “affordable” can be struck out. Some anti-density pundits are already giggling that this would concede building more housing doesn’t make housing affordable. Purposely now jumping back to the marketing term “affordable” vs. the technical term the judge argued in court.

It doesn’t concede anything other than that the phrase “Affordable Housing” has outgrown its usefulness as a term.