This article was posted on Monday, Jun 01, 2015

SACRAMENTO, CA:  On, April 8th, the California Supreme Court heard an oral argument from Pacific Legal Foundation (PLF) in a challenge to San Jose’s “Inclusionary Housing Ordinance,” which imposes a significant financial penalty on the providers – and purchasers – of new homes.

Donor-supported PLF is the leading watchdog organization that litigates for limited government and property rights nationwide.  In challenging the San Jose ordinance, PLF represents the California Building Industry Association – free of charge, as with all PLF clients.

PLF Senior Staff Attorney Tony Francois argued the case before the California Supreme Court.

The ordinance requires builders of developments with 20 homes or more to set aside 15 percent of the new units at below-market prices.  As an alternative, a builder would have to pay an “in lieu” fee of $122,000 for each of the below-market units that would otherwise have to be supplied. 

Although the plan is billed as an “affordable housing” program, it promises to raise costs on new housing and deter development.  The legal challenge argues that the ordinance violates constitutional property rights because it imposes a financial penalty on builders with no showing that their new home construction creates a need for new affordable housing.

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In essence, the program transfers the cost of “affordable” units from the public generally to homebuilders (and to the buyers of new, market-priced homes).

“Under basic constitutional principles, government may not single out specific individuals or groups of property owners to bear the burden of paying for needs they didn’t create, and for general social programs that are the responsibility of the entire community,” said Francois.  “Politicians are not permitted to extort property owners by demanding property that is unrelated to the permits they are seeking.”

The case is California Building Industry Association v. City of San Jose.  More information, including PLF’s briefs, a podcast, and a video statement, may be found at:  

Donor-supported Pacific Legal Foundation ( is the leading watchdog organization that litigates for limited government, property rights, individual rights, and free enterprise, in courts nationwide. PLF represents all clients free of charge.  For more information, visit