California City’s zoning extortion blocks family’s homebuilding dream

Wesley Yu and his wife live with their young daughter in a small, 1,000-square-foot home in East Palo Alto, California. Like many growing families, the Yus began dreaming of a little more space where their three-year-old daughter can play safely and visiting grandparents can stay comfortably.

That dream took shape as plans to build a new home and a small guest unit—a detached accessory dwelling unit (ADU)—on the adjacent lot they also own. The goal was simple: a multi-generational family haven that could one day add to the community’s housing stock when the Yus become empty nesters.

But East Palo Alto is standing in their way, forcing them into an impossible choice just to build modest living quarters on their own property.

Under the City’s Inclusionary Housing Ordinance, residential projects with fewer than five units—including the Yus, with two planned units—triggers a requirement to either dedicate one unit as “affordable housing” or pay a steep in-lieu fee. The Yus price tag is a staggering $54,891.

The ordinance defines “affordable” based on income, and while the City doesn’t say which category applies in each case, the Yus likely wouldn’t qualify to live in their own unit themselves. Making matters worse, their ADU is classified as a rental under local law, which means they can’t simply leave it empty. City guidance prohibits rental units from remaining vacant for more than six months.

In other words, to comply with the ordinance, the Yus would have to open their property to tenants they didn’t choose—and don’t want—while permanently surrendering control through a deed restriction on the property forever. Or they’d have to open their checkbook and pay the City nearly $55,000. No matter what, the City gets something: the property, or the cash.

This isn’t just bad policy—it’s unconstitutional.

The Supreme Court has repeatedly made it clear that the government can’t force people to give up their property rights in exchange for a permit. In Cedar Point v. Hassid (2021), the Court reaffirmed the right to exclude others as a core property right. And it held in Nollan v. California Coastal Commission (1987) and St. Johns River Water Management District v. Koontz (2013) that the government cannot demand money or property in exchange for a land use permit without a direct connection to the impact of the project.

The Yus’ modest home project doesn’t reduce affordable housing—it increases overall housing supply. Yet the City is holding their permit hostage unless they give up a portion of either their property or their savings.

The right to use one’s land for a family home is a cornerstone of the American Dream. Families like the Yus shouldn’t have to buy the government’s permission to create a place where their children and aging parents can live.

Now Wesley is fighting back. Represented free of charge by Pacific Legal Foundation, he’s challenging East Palo Alto’s extortionate housing ordinance in federal court—defending his family’s future and the fundamental rights of all Americans to build a better life on their own land.