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Appeal Expected After California Housing Law Ruled Unconstitutional, Legal Professionals Say

Criticized 2021 Measure Aims To Ease State’s Shortage of Affordable Homes

Five cities in California, including Redondo Beach, won a lawsuit arguing a statewide housing law was unconstitutional. (Kalina Mondzholovska/CoStar)

CoStar News

April 26, 2024 | 12:56 P.M.

A criticized law aimed at easing California's housing shortage that's been ruled unconstitutional by a district court is far from dead, according to industry professionals.

The measure known as Senate Bill 9 took effect in January 2022, letting property owners split single-family lots in two and build a duplex on each lot. The changes could allow owners to put as many as four units of housing on a single-family zoned lot.

Cities were required by the law to approve applications for these kinds of developments, so long as the proposed construction met a list of requirements.

The law comes at a time when home ownership is becoming increasingly out of reach — not just in California, but nationwide. Housing costs are near record highs, and the United States is facing a supply shortage, further exacerbating the lack of affordability.

In California, more than 1.3 million low-income renter households lack access to an affordable home, according to the California Housing Partnership. Another estimate determined the state must build at least 3.5 million housing units by 2025 to remedy its housing shortage. Meanwhile, multifamily construction has slowed, too, with apartment building permits reportedly dropping to their lowest pace in 10 years.

But shortly after SB 9 passed, five California cities — Redondo Beach, Carson, Torrance, Whittier and Del Mar — filed a lawsuit against the state, arguing that the statewide legislation was unconstitutional and overstepped local government’s role, according to court documents.

Under California law, cities can opt to incorporate as charter cities, allowing them to adopt their own constitutions and establish home rule over municipal matters. The plaintiffs argued that SB 9 violated this rule and said they had the right to regulate land use within their jurisdiction.

On April 22, Los Angeles District Court Judge Curtis Kin agreed with them and overruled SB 9 on the grounds that it is not “reasonably related and sufficiently narrowly tailored” to its purpose of ensuring affordable housing, according to court documents. Kin said that because SB 9 does not include a provision that requires new units to be sold or rented for less than market rate, the bill does not promote its interest, and is therefore unconstitutional.

Given the judge’s decision, plaintiffs are no longer held to SB 9’s provisions. In other words, they are not required to approve applications for splitting lots. The ruling only applies to the parties listed in the suit — Redondo Beach, Carson, Torrance, Whittier and Del Mar.

Appeal Expected

The ruling has dealt a blow to local politicians and professionals who have advocated for its passage.

Chris Elmendorf, a law professor at the University of California, Davis, called the decision “ridiculous” and said affordability was likely not the purpose of SB 9 to begin with in an interview with CoStar News.

“What the Legislature was trying to do almost surely was not to promote the development of below-market-rate housing, but rather to promote more housing in general,” he said.

Sen. Toni G. Atkins, who introduced SB 9, said the court's decision is "misguided," according to a statement shared with CoStar News.

"The goal of SB 9 has always been to increase equity and accessibility in our neighborhoods while growing our housing supply and production across the state," she said. "In the last several years, the legislature has taken a multi-faceted approach in tackling the housing crisis at every affordability level."

Elmendorf, and other advocates, said they expect Attorney General Rob Bonta to file an appeal of the decision. That could take about a year or two to resolve, but there is a consensus that the district court’s ruling will likely be overturned in a court of appeals, according to Elmendorf.

Bonta’s office told CoStar News it is reviewing the decision and “will consider all options in defense of SB 9.”

In the meantime, other cities could join the five plaintiffs in rejecting SB 9 applications on the grounds that it was ruled unconstitutional, Elmendorf said.

“The legislature can very easily fix this problem,” he said. “They can pass a one-sentence law saying the purpose of SB 9 is to promote and facilitate the development of relatively small, relatively affordable market rate housing in existing neighborhoods.”

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