Housing Land Advocates (HLA) recently filed an appeal in the Land Use Board of Appeals (LUBA) against the City of Happy Valley in opposition to a comprehensive plan amendment and zone change. The application requested a downzone from multi-family to a single-family residential zone and approval of a 31-lot subdivision. The substantive issue in the case is whether the City made adequate Goal 10 findings related to the availability of land for affordable housing with the City (no such findings were made by the Planning Commission). The City of Happy Valley filed a Motion to Dismiss claiming that HLA did not exhaust its local appeal remedies prior to filing the appeal. However, HLA had submitted a detailed letter explaining that no local appeal was required for a comprehensive plan amendment because state law requires the local governing body – in this case the City Council – to make a final decision. HLA declined the City’s offer to pay a $1000 appeal fee and $2500 deposit for the City’s attorney’s fees to appeal the Planning Commission’s decision to the City Council. The City Council did not respond to HLA’s letter and the LUBA appeal followed.
Bridge Aina Le’a v. Hawaii Land Use Commission, 2016 WL 797567 (D. Haw.) grew out of Defendant Commission’s decision to reclassify a parcel from urban to agriculture, an action that may be taken only by the state agency. Ultimately the Hawai’i Supreme Court invalidated this action. In this separate federal action claiming just compensation for a regulatory taking, Defendants Commission and its members moved for summary judgment.
Avenue 6E Investments, LLC v. City of Yuma, 2016 WL 1169080 (9th Cir.), involved the denial of a rezoning, notwithstanding the recommendation of approval by both the professional planning staff and the City’s Planning and Zoning Commission. Plaintiff developers brought these proceedings under both the Equal Protection Clause and the federal Fair Housing Act (FHA), alleging the denial was both intentional and also disproportionally deprived Hispanic residents of housing opportunities and perpetuated segregation. The subject denial was the first in three years and 76 rezoning applications.
The City of Bend is in dire need of more housing at all income levels, particularly affordable housing. In a November 2015 presentation to the Housing Land Advocates, Jim Long, the City’s Affordable Housing Manager, reported that the housing market is so tight in Bend that he receives calls from hospitals looking for homes for new doctors, in addition to the low income population his office is meant to serve. Despite the demand for affordable housing, the case of Kine v. City of Bend (LUBA No. 2015-068, December 24, 2015) represents how difficult it is to increase the supply within city limits.
Over the last two years, I have been speaking locally and around the country about affordable housing. My focus has been on the exploration of affirmatively furthering fair housing and disparate impact, through analysis of case law development. One of the themes that has become clear is the need to look at housing as part of our infrastructure. The way to plan for equitable neighborhoods is to plan for affordable housing in neighborhoods with access to good schools, grocery stores with fresh fruits and vegetables, quality public transit, and job opportunities.
In a long-awaited decision, the California Supreme Court upheld an “inclusionary zoning” ordinance by the City of San Jose that provided for construction of low and moderate-income housing by requiring a developer of 20 or more units to set aside 15% of the units for the private purchase by those with low- or moderate-incomes. The California legislature had authorized, but did not require, any particular method to provide such housing.
On April 14, the Oregon House voted to approve House Bill 2564, which would remove the preemption on local government adoption of inclusionary zoning as a tool to advance affordable housing. Oregon and Texas are the only states that currently maintain such a prohibition and most other states allow this issue to be resolved at the local level. If the ban were lifted, local governments could require that some percentage of units in a development be sold as affordable units to low income buyers as part of any new housing development. No more than 30 percent of the housing units created by a new project could be offered at below-market rates, and local government must provide builders with one or more additional incentives such as additional density, waiver of permit fees or expedited permit review to do so.
There are some who argue that repealing of the ban on inclusionary zoning is somehow incompatible with our State planning system. Nothing could be further from the truth. Goal 10 (Housing) requires that:
Buildable lands for residential use shall be inventoried and plans shall encourage the availability of adequate numbers of needed housing units at price ranges and rent levels which are commensurate with the financial capabilities of Oregon households and allow for flexibility of housing location, type and density.
To assure that this objective is realized, the legislature has imposed an obligation on most local governments to plan and provide for “needed housing,” namely housing types:
* * * determined to meet the need shown for housing within an urban growth boundary at particular price ranges and rent levels…
Needed housing includes attached and detached single-family housing and multiple family housing for both owner and renter occupancy; government assisted housing; mobile home or manufactured dwelling parks; manufactured homes on individual lots planned and zoned for single-family residential use that are in addition to lots within designated manufactured dwelling subdivisions; and housing for farmworkers.
Last September, the comment period on a federal Department of Housing and Urban Development’s (“HUD”) proposed rule closed. That rule portends a very different course in the expectations of state and local governments in dealing with affordable housing. While retaining the prohibitions on housing discrimination, the new rule (now being reviewed by the Office of Management and Budget) requires taking proactive steps “to address significant disparities in access to community assets, to overcome segregated living patterns and support and promote integrated communities, to end racially and ethnically concentrated areas of poverty, and to foster and maintain compliance with civil rights and fair housing laws.”
Most local governments take federal funds for housing or urban development, which implicates the new rules. Those funds take the form of loan guarantees, urban renewal grants, homelessness programs, disaster relief, transportation and other infrastructure funds and a variety of other means. A state or local grantee is “required to submit a certification that it will affirmatively further fair housing (“AFFH”), which means that it will (1) conduct an analysis to identify impediments to fair housing choice within the jurisdiction; (2) take appropriate actions to overcome the effects of any impediments identified through that analysis; and (3) maintain records reflecting the analysis and actions in this regard.” The AFFH obligation extends to all housing and housing-related activities in the grantee’s jurisdictional area whether publicly or privately funded.
One effect of the new rule, which is likely to be challenged in the federal courts, is that housing issues will not be treated in isolation, but in a relationship with other drivers of urban development. Thus, the connections between affordable housing and transportation or zoning, community expenditures in public services and facilities, racial or ethnic segregation and residency preferences or requirements are relevant issues for analysis and action.
Potentially, the new rule is not another effort at paper shuffling to deal with housing needs. Receipt of federal housing funds requires repeated AFFH certifications of compliance with the analysis, action and records obligations noted above. The rule requires action to deal with problems identified, in part, by the use of uniform data. A state or local government may thus be sued for doing nothing in the face of an identified problem. Moreover, for those public agencies that certify compliance and do nothing or which support efforts to thwart affordable housing, litigation may be brought under the False Claims Act and if the AFFH certifications were false, treble damages and attorney fees may be awarded, with a possible share going to a “relator,” one who “blows the whistle” on a non-complying government.
The case of Westchester County, New York, even though brought under current law, is instructive. Although certifying that it was affirmatively furthering fair housing when it received over $52 million in federal grants over the years, the County did not consider race-based impediments to fair housing choice even though it was part of one of the most segregated regions in the country. The County made no mention of housing discrimination or residential segregation and was successfully sued by a nonprofit activist organization under the False Claims Act. The federal government joined the suit and a settlement was ultimately reached under which 750 affordable housing units must be built within 7 years in the “whitest” neighborhoods of the County, the County must return $30 million to HUD because of its false certifications, $21.6 million of which was to Fund Integrative Units (which was supplemented by another $30 million from the County), which was also required to pay $7.5 million to the “Relator” for ferreting out false claims and another $2.5 million in attorney fees and costs. While the racial overtones of the County’s actions were extreme, the new rule raises the bar for reporting, actions and records required of state and local governments in housing matters.
Because the new rule does not depend on federal funding for enforcement, it is likely that nonprofit affordable housing organizations will follow the lead of their environmental brethren to undertake enforcement activity, using the “bounty” provided by the False Claims and Civil Rights Acts to fund further enforcement. If the rule is enacted and survives OMB review and court challenges, the national housing picture will be very much changed indeed. In Oregon, the new rule may spell the end on the statutory provision against inclusionary zoning and Metro’s prohibition on forcing higher densities in existing neighborhoods. We all may be in for a very bumpy ride indeed.
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