Real Estate Update: San Francisco Amends Inclusionary Housing Ordinance

On December 14, 2010, the San Francisco Board of Supervisors amended its Inclusionary Housing Ordinance in response to a California appellate court’s decision in Palmer/Sixth Street Properties, L.P. v. City of Los Angeles.  The Palmer case held that an affordable housing program that restricted the rental rates an apartment owner could charge at the beginning of a tenancy was in violation of the state’s rent control laws (Costa-Hawkins Act).  Because of similar rent restriction features in San Francisco’s Inclusionary Housing Ordinance, the Board of Supervisors adopted interim controls in February, 2010, to address the Palmer decision.  The newly adopted Ordinance (now renamed the “Inclusionary Affordable Housing Ordinance”) makes most of the interim controls permanent.

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