In his final act of the signing period, Governor Brown vetoed AB 1229 (Atkins), leaving many housing advocates scratching their heads. The bill would have overturned the decision in Palmer v. City of Los Angeles, which held that the Costa-Hawkins Act–aimed at rent control–also prohibited local inclusionary policies from being applied to rental housing. In vetoing the bill, and letting the decision stand, the Governor implicitly endorsed the court’s over-broad interpretation of Costa-Hawkins.
Yet, his veto message makes no mention of Costa-Hawkins or the soundness of that decision. Instead, the veto offers an over-broad interpretation of its own, suggesting that the bill was about whether inclusionary could be imposed on all types of residential construction (in reality, the application of inclusionary to for-sale units has never been in doubt.) The Governor also suggested he wanted to await further guidance from the California Supreme Court, which will soon decide a pending San Jose case. However, the issue in that case, no matter how it is decided, will have still leave unresolved the erroneous ruling in Palmer. Meanwhile, housing advocates and local governments find themselves with yet one less tool for the production of affordable rental housing.