In the Palmer/Sixth Street Properties v. City of Los Angeles case in 2009, an appellate court ruled that when Los Angeles imposed affordable-housing rates on some units in new apartment projects, it violated a state law that protects the rights of building owners to establish initial rents in apartment units. Only if a project received some public benefit could a city make such demands.

Since then, the approximately 170 jurisdictions in California with affordable-housing laws have been working to conform with the court decision while preserving their ability to get below-market housing from new apartment projects.