Elizabeth Elia (University of New Mexico – School of Law) has posted What If Inclusionary Zoning Laws Are Legislative Exactions? (Michigan State Law Review, forthcoming) on SSRN. Here is the abstract:
Imagine you are a real estate developer about to build a new residential subdivision. When you meet with your city’s planning department to obtain development approval, you are told that you must agree to dedicate land for a new public school, and you must sell 5% of the houses you build to lower-income households. The first demand is an exaction, and the Supreme Court has found that it may be a taking that violates your Fifth Amendment rights if the city cannot prove that it is essentially related and roughly proportional to the public need for schools created by your proposed subdivision. The second demand is required by the city’s inclusionary zoning ordinance, but is it an exaction too? If it is an exaction, what standard of review should courts apply to determine its validity? The rational basis review applied to most land use laws or the heightened scrutiny applied to exactions?
Inclusionary zoning laws are used by localities throughout the country to grow the nation’s supply of affordable housing, but their future is uncertain. In its 2024 decision, Sheetz v. County of El Dorado, the Supreme Court clarified that the exactions test applies not only to permit conditions demanded in ad hoc, individualized permit negotiations, but also to exactions created by broadly applicable legislation. However, the Court left unanswered questions about how to identify a legislative exaction and how to apply the exactions test to legislation.
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