Eminent Domain Report

As reported by our colleague Robert Thomas on inversecondemnation.com, the California Supreme Court granted the California Building Industry Association's (CBIA) petition for review in California Building Industry Association v. City of San Jose.  The case will be the first test in California post-Koontz on whether the nexus/proportionality requirements apply to general regulations such as affordable housing exactions.

The CBIA filed the petition after the Court of Appeal for the Sixth Appellate District reversed and remanded the Superior Court's decision invaliding the City's "Inclusionary Housing" ordinance, holding that the ordinance was subject only to rational basis review, as compared to the less deferential Nollan and Dolan nexus/proportionality standard applied by the Superior Court.  In the petition for review, the CBIA asserted that review is warranted because the Court could resolve a conflict created by the Sixth Appellate District's decision, and "settle the important legal question of how the United States Supreme Court's decision in Koontz applies to in-lieu development fees in California." 

Thus, it appears that the stage is set for a blockbuster takings decision.  Either the California Supreme Court will hold, as many practitioners believe is appropriate, that Koontz v. St. Johns River Water Management District changed the legal landscape for all dedications and exactions, or the Court will carve out an exception for inclusionary housing requirements.  Now all we have to do is sit and wait.