You can really breathe in San Jose
They've got a lot of space
There'll be a place where I can stay.
I was born and raised in San Jose
I'm going back to find some peace of mind in San Jose
Today, in this order after a series of rescheduled considerations that had seen the U.S. Supreme Court repeatedly delay the conference, the Court declined to review the California Supreme Court's decision in California Building Industry Association v. City of San Jose.
That's the case in which the California Supreme Court upheld the city's "affordable housing" requirement against a challenge which asserted that it was an exaction and thus should have been subject to the heightened scrutiny of the unconstitutional conditions doctrine of Nollan, Dolan, and Koontz. The California court disagreed, holding that because the ordinance did not require a developer to give up land, or money in lieu of land, it was a mere zoning restriction and not an "exaction," and therefore subject only to the "rational basis" test and not the heightened scrutiny applicable to exactions.
We filed an amicus brief in support of CBIA's cert petition. Our brief argued that even though the city's requirement doesn't demand land, clouding an owner's title for up to 55 years with an encumbrance that prohibits its sale at market rates is pretty much the same thing, and calls up the same anti-extortion concerns that fuel the Nollan, Dolan, andKoontz requirements.
Justice Thomas concurred in the denial of cert, noting that the issue of whether a legislative exaction is subject to the same requirements as an administrative exaction is "an important and unsettled issue under the Takings Clause." He noted that the lower courts are sharply divided, and "[t]hat division shows no sign of abating." He expressed his doubts whether there should be a difference, but concluded this petition wasn't the right one to review the issue:
Yet this case does not present an opportunity to resolve the conflict. The City raises threshold questions about the timeliness of the petition for certiorari that might preclude us from reaching the Takings Clause question. Moreover, petitioner disclaimed any reliance on Nollan and Dolan in the proceedings below. Nor did the California Supreme Court’s decision rest on the distinction (if any) between takings effectuated through administrative versus legislative action. See 61 Cal. 4th, at 461–462, 351 P. 3d, at 991–992. Given these considerations, I concur in the Court’s denial of certiorari.
In other words, this issue is far from over and it's on to the next case. San Jose's ordinance has survived, and the rule enunciated there by the California Supreme Court remains in place: when the "exaction" doesn't expressly require the turn-over of money or land, it's not an "exaction." Oh, and even though the Cal Supremes didn't base their decision on the rule, legislatively-imposed conditions will only be subject to rational basis review in California.
But when the right case presents itself, from California or elsewhere, those rules may change.
[Barista's note: what does the Dionne Warwick/Burt Bacharach song have to do with this, other than it's about San Jose? We included it because it is about an earlier time, when San Jose wasn't the heart of "Silicon Valley" and one of the most expensive housing markets in the nation. When it was filed with orchards, almond trees, and pruneyards (ah, so that's why that shopping center has that weird name). No more, and this case just reflects the changes.]
California Building Industry Ass'n v. City of San Jose, No. 15-330 (Feb. 29, 2016)
