Appellate Court Finds that Inclusionary Housing Requirement is Not an Exaction, Therefore Challenge is Time-Barred

Trinity Park v. City of Sunnyvale

In a decision supportive of local inclusionary housing ordinances, the Sixth District Court of Appeal ruled that a subdivider's challenge to a development condition requiring below market rate housing was not governed by the AB 1600 Mitigation Fee Act statute of limitations. The case is primarily analyzed as a statute of limitations issue, but in the course of the analysis, the court finds that Sunnyvale's affordable housing requirements were imposed as land use restrictions, and were not subject to AB 1600, the Mitigation Fee Act. Accordingly, the applicable limitations period was 90 days based on the Subdivision Map Act and Government Code section 65009(c)(1)(E). Since the developer did not file its challenge within the 90 day limitations period, the complaint was time-barred (Trinity Park v. City of Sunnyvale, ___ Cal.App.4th ___, March 24, 2011).

This is a good decision for local inclusionary housing ordinances. The court's ruling that the inclusionary requirements were not subject to the Mitigation Fee Act eliminates the Act as a potential source of challenge for similar local ordinances that are not imposed to defray the costs of public facilities for a development project pursuant to section 66020. The decision does not insulate inclusionary ordinances from other sources of challenge, but it does limit the potential for challenge based on the Mitigation Fee Act definition of an exaction. Apart from the inclusionary housing issue, the court reminds land use practitioners of the general rule that "the applicable statute of limitations depends on the nature of the cause of action...". Especially in today's complex entitlement processes where there may be multiple types and layers of land use approvals, there may also be the potential for multiple statutes of limitations. Determining the correct statute(s) of limitations requires a careful examination of the nature of the approval and the particular action being challenged.

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