In 616 Croft Ave., LLC v. City of West Hollywood, (2016) 3 Cal.App.5^th 621, the court of appeal held that the City’s in-lieu affordable housing fee was not subject to the reasonable relationship test under the Nollan/Dolan line of cases.  The subject project, an 11-unit condominium development on two combined lots, was approved in 2005, but because of the economic downturn the developer did not request building permits until 2011.  During that time, the City’s in-lieu housing fee under its 2011 fee schedule had increased to $540,000.00.  The developer paid under protest, and then sued the City for a refund in 2012, arguing that the fee was an illegal “exaction”.

In Kalnel Gardens, LLC v. City of Los Angeles, (2016) 3 Cal.App.5^th 927, the court of appeal held that affordable housing requirements set forth in the Density Bonus Act (Gov. Code § 65915 et seq.) and the Mello Act (Gov. Code § 65590 et seq.) were superseded by development restrictions set forth in the California Coastal Act (Pub. Resources Code § 30001 et seq.).  The subject project included five new duplexes and five new single family homes in an old neighborhood in Venice comprised mostly of single-story 1920s-era bungalows.  The project also included density bonus concessions under the City’s density bonus ordinance, including higher rooflines and shorter setbacks.  Plaintiffs argued that the project violated the Coastal Act because its height, density, setbacks and other visual and physical characteristics were out of character of the existing neighborhood.

In People for Proper Planning v. City of Palm Springs (2016), 2016 WL 3005719, an affordable housing advocacy group filed a lawsuit challenging City of Palm Springs’s  adoption of a general plan amendment (GPA) removing minimum density requirements for each residential development.  The trial court ruled that the GPA was exempt from environmental review under the California Environmental Quality Act (CEQA), but the court of appeal reversed on this issue.

The Santa Cruz Sentinel recently reported on the Santa Cruz City Council’s approval of a new 32-unit condominium project to be constructed at 1800 Soquel Avenue at the intersection of Hagemann Avenue, which is the current site of May’s Sushi Bar & Grill. (Santa Cruz Council Green Lights New Condo Development, 4/13/16.)  The article described this project as, “a test case for the city’s in-development “Corridor Plan,” calling for increased density of residential and commercial growth along major city roads….” The project consists primarily of one-bedroom and studio units, and will provide much needed relatively affordable housing in the City.

The Santa Cruz City Council and the Santa Cruz County Board of Supervisors have already decided, as a matter of land use policy, that the best places to add the substantial amount of new housing that is needed in Santa Cruz are along the four main thoroughfares – Mission Street, Water Street, Soquel Avenue/Soquel Drive, and Ocean Street.  The basic idea is to site new, dense residential development near bikeways and public transportation routes in hopes that a significant amount (10%? 20%?) of new residents will bike and/or take the bus instead of driving (at least some of the time), in order to minimize traffic and other impacts in the urban boundary area overall.

In California Building Industry Association v. City of San Jose (2015), the California Supreme Court affirmed the court of appeal’s ruling and upheld the City of San Jose’s inclusionary housing ordinance.  In order to address state policies and goals intended to encourage more affordable housing units, hundreds of  California municipalities have adopted what are commonly referred to as “inclusionary zoning”,  “inclusionary housing” or “affordable housing” programs, which typically require or encourage developers to set aside a certain percentage of housing units in new or rehabilitated projects for low- and moderate-income residents.