Yesterday, the California 6th District Court of Appeals definitively concluded in Anderson v City of San Jose that housing is indeed a statewide concern worthy of statewide legislative intervention. The ruling supports the steps taken by the California legislature to address the state’s housing shortage. In recent years, we’ve seen sweeping changes to statewide housing policy that limit the effects of local decisions on housing. From the Housing Accountability Act, SB 35, SB 330, and the whole package of Accessory Dwelling Unit Legislation, to this year’s rent cap legislation, the state has been active in working to support the 3 P’s of housing: production, protection of tenants, and preservation of affordable housing. To varying degrees the efforts limit local discretion to regulate an area traditionally—but not irrevocably—left up to local governments, and are sometimes met with hostility from these governments. This ruling is a welcome relief for those who care about solving California’s housing problems.
The legal issue at stake in the case is whether the Surplus Lands Act, a law designed to encourage local governments to market unused property for development as affordable housing, applies to charter cities. The California constitution gives charter cities special protection against preemption of local regulatory powers by state legislation. Even if a state law is intended to limit the discretion of charter cities, it must pass a four part legal test to determine whether it can be enforced in this way. First, a court looks to whether the conflict arises out of an area of historically local concern. Second, there must be an actual conflict between the state and local laws. If the law covers an area of traditional local concern, the court then looks to whether the statewide policy addresses a truly statewide concern. If not, the local law prevails and the test stops there. However, If the state law does regulate an area of true statewide concern, then the court looks to whether the state law is narrowly tailored to achieve its purpose with a minimum of intrusion into local decision making.
Charter cities can therefore argue against any imposition of statewide authority over municipal affairs. The City of Vista did so successfully in the last major decision by the California Supreme Court on this issue. In State Building and Construction Trades Council of California v. City of Vista, the California Supreme Court found that a statewide prevailing wage law could not be applied to charter cities. Cities have since adopted this argument to fight against statewide interventions on housing policy. We’ve seen this issue come up in at least three cases: this one, several lawsuits involving Huntington Beach’s compliance with housing element law, and most recently in our own lawsuit against San Mateo. The Anderson decision is a significant victory for California’s efforts to remedy its housing issues because it makes clear that charter cities must take statewide housing law seriously.
We have good reason to support statewide housing solutions. The effects of decisions about development in one jurisdiction spill over into the next. We have one big housing market, not hundreds of disjointed fiefdoms. We’ve seen this play out as a race to the bottom among California’s many different cities as they compete to see who can be the most restrictive and exclusive on housing issues, under the guise of looking out for their own residents. In response, the state legislature has brought about a steady increase in state interventions into housing policy that all seek to push back against what has been going on for decades. If we want to make real progress on housing, we need to push local governments even harder to support housing. Some of this effort can be accomplished through local political organizing, but if the changes are to be made equitably throughout the state, we need to state legislature to set reasonable boundaries on local land use control as it has in other fields such as transportation, privacy, policing, healthcare, insurance, and others.
This ruling does a lot of work to show how the decision handed to us in San Mateo is wrong. Most of the arguments in support of the statewide interest in housing apply to the Housing Accountability Act just as the court has declared that they do to the Surplus Lands Act. While the issue of whether the Housing Accountability Act is narrowly tailored for its purpose is not covered by this opinion, we have a lot of good arguments on our side. Stay tuned, there will more to come in San Mateo.