A COALITION OF BUILDERS AND REALTORS in Florida filed a lawsuit earlier this year in the state's Second Judicial Circuit Court in Leon County to challenge an inclusionary zoning law that the city of Tallahassee passed in spring 2005 to provide more workforce housing.

The case promises to be one of the most serious challenges to inclusionary zoning in years. High-profile lawyer Barry Richard was hired to argue the case on behalf of the Florida HBA, the Tallahassee Builders Association, and the Tallahassee Board of Realtors. Richard is best known for successfully representing George W. Bush in the 2000 election litigation with then–Vice President Al Gore.

Richard expects that the case will go to trial by June or July. Tallahassee is the first municipality in Florida to pass a mandatory inclusionary zoning law, and the case is being watched closely by state and local officials in Florida as a benchmark and guide for future affordable housing programs. The builders and Realtors filed the lawsuit to stop inclusionary zoning programs from spreading across the state.

Inclusionary zoning is the controversial policy in which a municipality designates mandatory set-asides in a new development for low- and moderate-income families, typically in exchange for density bonuses that let developers build extra units they can sell at market rates. Inclusionary zoning is generally opposed by builders, who say that the market should set home prices, not the government, and claim that inclusionary zoning is enforced social engineering in disguise.

Tallahassee's inclusionary zoning law says that at least 10 percent of the new homes in a development with 50 or more single-family or multifamily homes must be sold for $159,378 or less. That price represents the maximum mortgage that families earning 70 percent to 100 percent of the median county income can afford.

Builders and Realtors are challenging the law on three counts:

Aviolation of federal due process. The lawsuit maintains that Tallahassee's ordinance is unconstitutional and an “arbitrary and capricious” violation of due process because inclusionary zoning won't meet the goal of providing affordable housing to the general public. Rather, the builders say, it will provide a windfall to a fortunate few who can sell their properties at market rates after 10 years.

An unlawful taking. The lawsuit says that the ordinance forces some people alone (builders, Realtors, and new-home buyers) to bear public burdens to advance a public policy of providing workforce housing, a responsibility that should be carried out by the public at large.

An unlawful state tax. Builders and Realtors maintain that the zoning law represents an unlawful tax since municipalities in Florida are barred from levying real estate or personal property taxes.

“Affordable housing is a legitimate purpose,” says attorney Richard, “but the city must show it can meet its goals. We think it is arbitrary to take substantial value from a few builders to serve only a few buyers. It won't solve the problem of workforce housing.”

City officials in Tallahassee saw the need to provide more workforce housing after learning that about 50 percent of the families in the Tallahassee metro area earn less than $57,700 a year and that about 38 percent of the metro area labor force work in government or service jobs. In these sectors, most workers fall within the low- and moderate-income levels, and finding affordable housing is a challenge.

Learn more about markets featured in this article: Tallahassee, FL.