State Supreme Court Ruling Protects WeHo’s Affordable Housing Requirement

A ruling yesterday by the California Supreme Court preserves an important element of West Hollywood’s strategy for encouraging the development of housing for low- and moderate-income residents.

In a unanimous decision, the court rejected an argument by the California Building Industry Association (CBIA) that the City of San Jose cannot legally require developers to include housing for low- or moderate-income people in new projects or contribute to a city fund to help pay for such housing.

“Just as it would be permissible for a municipality to attempt to increase the amount of affordable housing … by requiring all new residential developments to include a specified percentage of studio, one-bedroom or small-square-footage units, there is no reason why a municipality may not alternatively attempt to achieve those same objectives by requiring new developments to set aside a percentage of its proposed units for sale at a price that is affordable to moderate- or low-income households,” said Chief Justice Tani Cantil-Sakauye in her ruling.

The City of West Hollywood has long required that developers of projects of more than 10 units reserve at least 20 percent of them for low- and moderate-income residents. In exchange the developers are granted certain benefits such as the ability to construct a building above the maximum density permitted in the area or a building that is taller and has fewer parking spaces.

Advocates for low- and moderate-income housing had been worried by a 2009 decision by a state appellate court in what is called the Palmer case . That decision effectively invalidated the City of Los Angeles’ requirement that developers include housing for low- and moderate-income people in their projects. As a result cities started looking at other options including requiring a developer to make a payment that the city can use to fund such housing. San Francisco’s mayor has said he will put on the ballot a proposal that the city issue $250 million in bonds to build more affordable housing. Yesterday’s Supreme Court decision seems to negate the decision by the lower court in the Palmer case.

Some homeowners, who make up a small but politically active portion of West Hollywood’s renter-dominated population, have objected to new housing development in the city, arguing that increased density will hurt the quality of life in various ways. A group formed to fight a proposed project at 826 N. Kings Rd. argued that the city does not need more housing for low- and moderate-income people.

“The affordable housing tale has been wagging the tail of the development dog in our city for too long,” said Councilmember John D’Amico at a meeting in May to consider a successful appeal of a Planning Commission decision approving the Kings Road project. “Our city is too dense by half. We have 18,000 residents per square mile. It is too much. It is just too much.”

D’Amico and others have argued that developers should be allowed to put money into a fund the city could use to build separate apartment buildings for low-income people.  But advocates for low-income people have argued that that will effectively segregate them from wealthier residents.

D’Amico, Councilmember Lauren Meister and  neighborhood activists opposed to more dense development have found themselves in a difficult position as they also state their support for making the city a more inclusionary community. According to a study by the state Legislative Analyst Office earlier this year, “building less housing than people demand drives high housing costs” The study, California’s High Housing Costs: Causes and Consequences said “community resistance to housing, environmental policies, lack of fiscal incentives for local governments to approve housing and limited land constrains new housing construction.”

“For many homeowners, their home is their most significant financial investment,” the study said. “Existing homeowners, therefore, may be inclined to limit new housing because they fear it will reduce the values of the homes.”

To qualify for low-income housing in West Hollywood, an individual must have an annual income of no more than $46,154. He or she can be charged no more than $605 a month in rent for a studio apartment and $690 for a one-bedroom unit. For a person to quality for moderate-income housing, his or her income must be between $45,155 and $57,693. A moderate-income tenant can be charged no more than $835 for a studio apartment and $956 for a one-bedroom apartment.