I mentioned last week that the United States Supreme Court decided not to hear the case against a Mandatory Inclusionary Zoning (MIZ) scheme in San Jose. I pointed out that the decision has no bearing on the proposed MIZ scheme here in Seattle; the San Jose law is for for-sale housing only and the legal issues with Seattle’s MIZ proposal are unaffected by the San Jose case. An interesting blog post from Legal Planet suggests why the case may not have made the cut and they weren’t substantive but procedural.

The reasons behind the justices’ interest in the case are suggested in an opinion by Justice Clarence Thomas concurring in the Court’s denial of certiorari in San Jose.  He wrote that “[t]his case implicates an important and unsettled issue under the Takings Clause”–specifically, whether the “unconstitutional conditions” doctrine articulated by the Supreme Court in Nollan v. California Coastal Commission and Dolan v. City of Tigard applies just to “quasi-adjudicatory” decisions of government officials like individual land use permit approvals (the specific factual context in both Nollan and Dolan) or also to “quasi-legislative” government decisions such as San Jose’s enactment of its citywide inclusionary housing measure.  As Justice Thomas’ concurring opinion notes, lower courts have split on that particular issue, with California state courts limiting application of Nollan/Dolan principles to quasi-adjudicatory administrative decisions.  Justice Thomas left no doubt as to where he stands on that question.  (“I continue to doubt that `the existence of a taking should turn on the type of governmental entity responsible for the taking.’”)  But Thomas agreed that the building industry’s cert petition may have contained some threshold procedural defects that would have prevented the justices from ultimately reaching the substantive regulatory takings question, and so he joined in denying review in the case.

If you’ve been following the years old story of incentive zoning and linkage and now MIZ, you’ll recognize the Nollan and Dolan cases as being very familiar. It is those cases that form much of the legal discussion on how courts would rule on Seattle’s efforts to squeeze cash out of market rate development for housing subsidies or to mandate that developers build rent restricted housing in their projects. Another interesting and speculative point in the article was what difference it might have made if Justice Scalia hadn’t died before the final decision to deny a hearing.

One wonders whether the Supreme Court might have acted differently on the petition for cert if Justice Scalia were still on the Court.  As the original architect of the Nollan/Dolan regulatory takings jurisprudence (he wrote the majority opinion in the landmark 1987 Nollan v. California Coastal Commission case), Scalia was vitally interested in protecting private property rights and shaping constitutional doctrine to that end.  Scalia was still on the Court and participated in the first two conferences at which the San Jose petition for cert was debated by the justices.  Unfortunately for property rights advocates, he died before the third and final conference, at which the justices ultimately voted to deny the CBIA’s petition.  It doesn’t strain credulity to believe that, had he survived, Scalia’s advocacy and crucial fourth vote might have made all the difference in getting the San Jose case before the justices on the merits.

In any event, in California and here in Seattle the legal questions about how these programs pass or don’t pass legal tests will continue. I can’t help but think we’d be much better off building more housing than making new law about how to successfully make bad housing policy, policies that add costs and exactions to market rate development, boosting it’s price, then using the money to pay for subsidies. There are better ways to do this — and they are legal and much more fair and they don’t substantially raise housing prices: the Multifamily Tax Exemption program and the Housing Levy.