Nexus Studies for Affordable Housing Inclusionary Ordinances

Legal challenges to inclusionary housing ordinances have created the need for a nexus study if a city wishes to require developers either to include affordable housing units in their developments or to pay a fee so the city can finance new affordable housing development. A nexus study substantiates the connection between new development and the directly caused need for additional affordable housing.

California cities that require developers to include affordable housing in multi-unit projects are not violating the takings clause of the state constitution, the California Supreme Court ruled in June in California Building Industry Association (CBIA) v. City of San Jose. The ruling validates similar laws currently on the books in 170 cities across California, which many have adopted in response to the state’s affordable housing requirements. However, the decision is being appealed to the US Supreme Court. CBIA continues to argue that San Jose’s inclusionary housing ordinance penalizes homebuilders — and raises overall home prices — by forcing homebuilders to dedicate a percentage of units as below-market residences or pay into a city housing fund, according to Pacific Legal Foundation.

RSG stays up to date with the most current legal status and requirements of inclusionary housing ordinances. Our associates know how to help developers comply with local laws and to help cities provide legal support for their inclusionary housing ordinances, having preparing commercial and residential nexus studies. Contact us today for more information on complying with housing ordinances or preparing nexus studies.

Written by Dima Galkin, an Associate at RSG