California family battles City’s extortionary zoning laws
Chris and Jessica Pilling live in downtown Healdsburg, California, where they play an active role in their community. The couple owns and runs Bike Healdsburg, a business that offers bike tours of the city’s downtown breweries and restaurants, as well as lush, surrounding vineyards. They are also the proud parents of three beautiful children.
The couple owns a duplex, but with their young family growing, the Pillings realized they needed more space—so they subdivided their lot and made plans to build a bigger home and an accessory dwelling unit (ADU) on their property.
That is when the trouble began.
Thanks to the City’s “inclusionary housing” program, before the Pillings could begin construction, they would have to make a difficult choice: fork over nearly $20,000 or forfeit a chunk of their land to the City.
The right to build
Tucked away in picturesque Northern California, Healdsburg was once a small rural town, but over the years that has started to change. As Jessica says, it’s now “the crown jewel city of Sonoma County. It’s on par with Napa. So many people are coming here because it’s such a desirable location at this point.”
With its burgeoning appeal came the recent surge in the town’s population and tourism. “There is a huge demand for housing,” Jessica explains. “And there’s not enough housing.” As far as their own housing needs were concerned, Jessica and her family were feeling cramped. “The living space is 1,200 square feet and we work from home, so it’s a bit crazy. The plan was obviously to get something bigger or expand,” Jessica says.
The Pillings decided they would build a new home that better accommodated their growing family and then add an attached accessory dwelling unit that would serve as a rental property. Improving their own living situation while also creating new housing that the City desperately needed to address its housing shortage was a no-brainer. But the City got involved and complicated what should have been an easy permitting process.
Healdsburg has an “inclusionary housing” program, which requires property owners to pay a fee, or else utilize any number of alternative options, all of which require residents to forfeit some interest in property. In the Pillings’ case, that fee would cost them a whopping $20,134.75.
Not only should property owners have the right to build on their own land without the government extorting them for money or land, but by backing the couple into a corner, Healdsburg is actually punishing the Pillings for creating viable solutions to the housing shortage.
Inclusionary zoning laws like these force property developers to subsidize housing that’s below the market rate, which counterproductively raises the cost of housing development. This in turn lowers the incentives for developers to build more housing in the first place, which also means the overall supply of housing is lower, as is the overall rate of housing development in a city.
While the City holds that new housing worsens affordability, it actually increases the housing supply, which lowers the price of housing in the absence of extra regulation. Instead of doing anything to lessen the problem, Healdsburg is rife with housing regulations that make it difficult for homeowners to build in the first place.
“You can’t build over two stories high. It has to be in a certain architectural style. You have to have this certain type of roof, you have to do all of these things. You can’t have a garage in the front of the house—it’s very, very particular,” Jessica said.
The ordinance isn’t just counterproductive; it’s also unconstitutional. Government cannot burden homebuilders with additional costs for problems they do not actually create, or, in this instance, for problems that the government is exacerbating.
Pacific Legal Foundation is helping the Pillings fight back against the town’s unconstitutional inclusionary housing program. Unfortunately for Healdsburg, this is an issue in which PLF has a lot of experience.
What does the Supreme Court think?
In 1982, PLF clients Marilyn and Patrick Nollan applied for a building permit so they could convert their beach bungalow into a two-story home. The California Coastal Commission agreed to approve their request, but only if they surrendered one-third of their property to the State.
Just like Healdsburg’s outlandish claims that the construction plans will be making housing less affordable, the CCC contested that the Nollans’ expansion project would create “psychological barriers” for motorists because their property would block drivers’ view of the Pacific Ocean.
The Nollans took their case all the way up to the Supreme Court where, speaking in the majority opinion, Justice Antonin Scalia declared the Commission’s demands unconstitutional and described them as an “out-and-out plan of extortion.”
The Court further ruled the CCC’s claims as an unlawful taking under the Fifth Amendment. The Constitution ensures that the government must provide just compensation if it takes an individual’s property. Justice Scalia also noted that compelling a public taking for a public purpose is permissible only when it is directly related to some harm caused by the development in question. As far as the Nollans were concerned, their plans for a two-story home were in no way directly tied to a motorist’s potential psychological turmoil from missing the ocean view.
The ruling in Nollan v. California Coastal Commission laid the foundation for future Supreme Court rulings in Dolan v. City of Tigard, Koontz v. St. Johns River Water Management District, and, most recently, Sheetz v. County of El Dorado.
Ultimately, these cases established that permit conditions for property owners must be directly related and proportionate to the property’s impact on the surrounding area.
This precedent is most certainly applicable in the Pillings’ situation. Dealing with a $20,000 fee has created a significant roadblock for Chris and Jessica, preventing them from pursuing the best interests of their family and the best interests of the City’s housing needs.
“I just think it’s wrong,” Jessica said. “It’s the principle of it for me and for Chris. We are trying to do something that actually solves the problem.”
She continued:
It shouldn’t be happening to us or to other people. Why are the people that are making housing having to pay for more housing? Very much in a nutshell, this doesn’t make sense to me.
No matter how the City tries to spin the facts, the Pillings’ project increases housing opportunities for the people of Healdsburg. That’s what the City claims to want—“but really they don’t want more housing,” Jessica says. “I think that’s very clear, and I get it.”
With PLF’s help, the Pillings are suing Healdsburg. If courts adhere to Supreme Court precedents on this issue—most of them won by PLF—they’ll strike down Healdsburg’s unconstitutional permitting process and send a message to cities: Stop trying to extort property owners instead of letting them build.
