California Apartment Association

CAA is requesting changes to an inclusionary-housing bill that’s up for a vote this week and would authorize local governments to require affordable housing in new rental developments.

AB 2502 by Assemblyman Kevin Mullin, D-South San Francisco, is on the Assembly floor and could be voted upon as soon as Wednesday, June 1.

Confusion over the legality of inclusionary housing mandates in new rental developements began with a court case known as Palmer v. Los Angeles.

Palmer called into question the legality of Los Angeles’ inclusionary-housing ordinance. The city law required a certain percentage of new rental housing be priced below market rates, a form of rent control.

Palmer argued that this policy violated California’s Costa-Hawkins Act, which bans rent control on housing built after 1995. Both the trial and appellate courts agreed.

AB 2502 by Assemblyman Kevin Mullin, D-South San Francisco, would overturn the Palmer decision, officially clearing the way for cities and counties to mandate affordable units in new apartment developments. Mullin’s bill is now awaiting a vote on the Assembly floor.

In 2013, Gov. Jerry Brown vetoed a similar bill to Mullin’s.

“As mayor of Oakland, I saw how difficult it can be to attract development to low and middle income communities,” Brown said in his veto message. “Requiring developers to include below-market units in their projects can exacerbate these challenges, even while not meaningfully increasing the amount of affordable housing in a given community.”

The California Apartment Association has offered a way for Mullin to make his legislation consistent with Costa-Hawkins while still achieving its objectives. AB 2502 should require cities and counties to offer developers incentives to build housing with affordable rentals. This change would reflect the way local governments began crafting laws after the Palmer decision.

Inclusionary housing can discourage development. If amended correctly, AB 2502 will help California build more affordable housing.

Until the requested amendments are made, however, CAA will oppose Mullin’s legislation.