March 31, 2014

PLF client gets friend of the court support from National Homebuilders in affordable housing case

By Anthony L. Francois Senior Attorney

PLF recently filed its opening brief and reply brief in the California Supreme Court on behalf of the California Building Industry Association, which is challenging the constitutionality of the City of San Jose’s regime of affordable housing exactions.

An affordable housing exaction is a demand that a local government imposes on home builders to set aside a percentage of the new homes for sale or rent at an “affordable”  (i.e. regulated) price to those with qualifying low incomes.  This may sound similar to housing assistance programs such as Section 8, but there is a crucial difference.  In programs like Section 8, a subsidy is paid from general tax revenue to qualified low income recipients, who then use that subsidy to acquire housing.  The seller or landlord of the housing does not contribute the subsidy.  The taxpayer does.  But with affordable housing exactions, the home builder is required to provide the subsidy in the form of accepting a below-market price for the new homes.

Last week the National Association of Home Builders filed a very helpful amicus brief in support of CBIA’s case.  The NAHB presents a very compelling argument that affordable housing exactions raise the market price of homes (by reducing the supply, no surprise), and thereby can price more potential buyers out of the new home market than are helped by the exaction of “affordable” homes from the builder.  You can read more about PLF’s case on behalf of CBIA against San Jose’s unconstitutional housing exactions here, or check out our podcast on the case.

 

What to read next