Homeowners sue city over $20,000 inclusionary zoning fee to build new home

Healdsburg, CA; September 5, 2024: A homeowner in Healdsburg, California, filed a lawsuit today against the City, arguing that its inclusionary zoning fee for new construction violates the law.  

Jessica Pilling and her husband want to build a new family home with an accessory dwelling unit on a portion of their property. After subdividing their property, they applied for construction permits, only to be hit with a $20,000 inclusionary zoning fee on top of the usual permitting costs.  

Inclusionary zoning forces developers of residential property to subsidize below-market-rate housing, which counterproductively raises the cost of development and thereby makes housing less affordable. The Supreme Court has consistently ruled that permit conditions for new construction must be proportional and directly related to that construction’s negative public impact. In this case, adding to a city’s housing supply does not negatively impact the cost of housing.  

“You can’t make housing more affordable by making it more expensive, but that’s what cities like Healdsburg do when they impose so-called ‘inclusionary fees’ on residential development,” said David Deerson, an attorney at Pacific Legal Foundation. “Fortunately, the Constitution prohibits the government from arbitrarily demanding property or money from developers, whether big firms or families like the Pillings.” 

The Pillings paid Healdsburg’s fee under protest and are now challenging it through a federal lawsuit, represented by Pacific Legal Foundation free-of-charge. The case is Pilling v. City of Healdsburg.