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I. Introduction <br /> Two published Court of Appeal decisions in the past six months, Building Industry Assn <br /> of Cent. California v. City of Patterson ("Patterson")I and Palmer/Sixth Street Properties L.P. <br /> v. City of Los Angeles ("Palmer.)2 have together upended previous understandings about the <br /> validity of, and appropriate analysis applied to, inclusionary housing ordinances. For the 170 <br /> communities in the State (nearly one-third of all cities) that had adopted inclusionary ordinances <br /> of some type by 2007,3 complying with Patterson and Palmer while still producing affordable <br /> housing has become more difficult. <br /> As a means to understand the issues raised in Patterson and Palmer and to develop a <br /> coherent response, this paper initially discusses the various characterizations of inclusionary <br /> ordinances as either exactions, rent and price controls, or police power land use ordinances. <br /> While most communities in the state have adopted inclusionary ordinances as land use controls, <br /> Patterson found an inclusionary in-lieu fee to be a type of impact fee, and Palmer found that <br /> restricting rents in new developments violates State rent control laws, even though the Los <br /> Angeles plan at issue was adopted as a land use control. (Both cases are discussed in detail in the <br /> companion paper presented by Alan Seltzer, and so not all of the facts and holdings are repeated <br /> here.) This paper finally discusses alternative strategies for modifying inclusionary ordinances to <br /> meet the current legal landscape and the numerous associated issues raised by the cases. <br /> Palmer was decided less than a week before this paper was drafted, and the conclusions <br /> reached here should be considered preliminary. In particular, it is to be hoped that the California <br /> 171 Cal.App.4th 886(2009). <br /> '2009 Cal.App. LEX1S 1186(B206102, Second Appellate District, Div. 4, filed July 22,2009) <br /> Non-Profit Housing Association of Northern California, Affordable by Choice: Trends in California inclusionary <br /> Housing Programs at 5 (2007)(hereinafter"NPH 2007"). <br /> 990051A1 A720372.3 <br /> 8/7/2009 <br />