The 2010 law set requirements for certain residential developments to set aside at least 15% of the units for affordable housing below market rates.
That law came under fire from groups like the California Building Industry Association which said that San Jose failed to justify the 15 percent requirement and should base any such quota on an assessment of any possible negative effects of the market-rate housing.
The California Supreme Court described the lack of affordable housing as an issue that has reached “epic proportions.” The court sided with the city, saying that while developers must follow the regulation, they do not have to dedicate any property or pay money to the public.
Because of this, Chief Justice Tani Cantil-Sakauye said that the law fell under a city’s "discretion to regulate the use of real property to serve the legitimate interests of the general public and the community at large.”
The decision keeps the regulations of some 170 California cities intact. San Jose’s own law had been on hold for the duration of the legal proceedings, they will now move on with implementation.