The Big Con: Or how an 1868 Iowa state court ruling led to unfunded, pro-development, housing mandates in Marin

An investigation into how an1868 Iowa state court ruling led to unfunded, pro-development, ABAG housing mandates we dealing with today in Marin.

The California Constitution requires the state to reimburse local governments for state mandates. “Unfunded mandates,” which are orders that induce “responsibility, action, procedure or anything else that is imposed by constitutional, administrative, executive, or judicial action” for state and local governments and/or the private sector, are not allowed, or at the very least are not enforceable without compensation.

If this is true, how did we end up in a situation where the State of California is sucking more and more of our tax dollars up to Sacramento while making more and more demands on local county and city governments about educational requirements, health and safety requirements, and particularly on local planning and things like affordable housing Regional Housing Need Assessment (RHNA) quotas without providing any funding to accomplish them? And if they don’t provide funding, how are they able to force us spend so much of our local time and money to comply with them, holding public hearings, doing expensive studies, creating Housing Elements, and crafting elaborate 20 year plans for housing and “Smart Growth” and what have you?

I’m not a lawyer but it seems to me these are questions someone should be asking. And as the financial situation for California cities and counties becomes increasingly dire and more and more cities declare bankruptcy due to lack of funding, why aren’t any of our elected officials asking these questions?

So I decided to do some digging. In my research, I kept coming across something called “Dillon’s Rule.”

Dillon’s Rule

According to Black’s Law Dictionary, Sixth Edition, Dillon’s Rule is a rule handed down from an 1868 Iowa State Court case that has been used ever since in interpreting statutes delegating authority from states to local government. In the case of Clinton v Cedar Rapids and Missouri River Railroad (24 Iowa 455; 1868), Justice John Forrest Dillon ruled that "Municipal corporations owe their origin to and derive their powers and rights wholly from the legislature."  In plain English this meant that cities and counties only have the powers that are expressly granted to them by their states. Without the state’s granting of powers, cities and counties have no inherent powers themselves.

Apparently, since then this ruling has become the cornerstone of an endless number of court decisions regarding the rights and powers of cities and counties and states.

To understand why this ruling came about a little history is helpful. In 1868, shortly after the Civil War ended in 1865, the country was not anything like it is today. States, or what was left of many of them, had very weak governments while many local jurisdictions (cities and counties) were by and large run like private fiefdoms that were notoriously financially corrupt. And many cities and county governments didn’t accept (have never accepted?) that the war was over. They pretty much made up their own laws which varied widely from one place in the state to the next.

So in order to bring about some semblance of order to our newly re-formed “Union” the courts took the position that’s stated in Dillon’s Rule. Strictly interpreted it meant that a city had to ask the state for permission to levy a tax or create a new ordinance. In those times, this probably made good sense. Today, when states hold all the power and cities and counties are weak and without significant resources or options, it makes no sense at all. The effect of Dillon’s Rule and its legal interpretation is still subject to great debate.

However, as time passed, many states adopted “Home Rule” laws that freed up the situation a bit (California being one of them) that essentially said that cities and counties could pass their own laws and taxes (without asking permission) so long as those laws and taxes didn’t contradict state law.

Okay, so far I understood all this, at least in theory. But you’re probably asking what does all this have to do with unfunded mandates?

There’s No Such Thing As Free Lunch

As I’ve pointed out in previous articles (see ), starting in the early 1990’s the “spend more than you earn,” debt and leverage game in our state and federal government and in our economy (big banking) started in earnest. The federal government began to amass enormous public debt and states quickly followed right behind them, piling on one unfunded program after another. As a result, California started down the road of withholding more and more tax and fee funding from cities and counties while at the same time dramatically expanding the number of state mandated programs and standards required of those cities and counties.

But wait a minute didn’t that directly contradict the California State Constitutional prohibition against unfunded mandates?  Well, yeah, it did. But in order to allow them to continue to pass legislation that they didn’t have to pay for, the California State Legislature pulled off an act of “spin” worthy of Machiavelli. They cited an interpretation of Dillon’s Rule that said that local governments are “administrative arms of the states and can be ordered to carry out state programs or policies generally referred to as mandates.”

Huh? Did you get that? In other words the state legislature turned the original intention of Dillon’s Rule on its head. In layman’s language they said that what Dillon’s Rule really meant was that the state can require unfunded mandates if they decide to (i.e. they legislate it to be so) because cities and counties only derive their powers from the state. And since “home rule” says that cities and counties can only have powers over things that are not precluded by the state legislature then voila! - unfunded mandates are fine so long as the legislature legislates them to be so. 

In know. I’m still scratching my head, too. But subsequent legal challenges, particularly regarding school funding issues, have largely failed to correct this. This opened the floodgates to the avalanche of unfunded mandates that have been cascading out of Sacramento ever since, having dramatic impacts on our schools, infrastructure, public services and yes, affordable housing and local planning. Which brings me to the current situation in Marin with regard to the MTC, ABAG, RHNA, affordable housing quota driven, Smart Growth, Transit Oriented Development (TOD), Sustainable Communities Strategy (SCS), Preferred Scenario, etc., etc. mess at hand - all of which adds up to one huge unfunded mandate.

So what have our elected representatives been doing about all this? With all their resources and bright legal minds at their disposal (courtesy of our tax payments) isn’t there any reasonable argument that can be brought forward to challenge this? Isn’t it time someone stepped up and questioned whether or not it’s appropriate to allow the California State Legislature to cite a one hundred and forty four year old court ruling as a basis to contradict the clear intentions of our state Constitution prohibiting unfunded mandates by the state?

This all bothered to no end. How could this be happening? And then it hit me. It’s not about doing what’s right or wrong, or financially prudent, or good for taxpayers. It’s really all about what's politically expedient.

The Big Schmooze

Think of it this way: You’re an elected official or political appointee, sitting in your office in Sacramento, worrying about the things that are most important to you like getting re-elected or re-appointed, increasing your power and political influence, enjoying the fabulous perks of your position (free health care, great retirement benefits, etc.), and most importantly increasing the number of financial supporters contributing to your campaign fund. And with all this important stuff to worry about you’re faced with a choice. Do I roll up my sleeves and try to really fix this financial mess we call California (or the United States for that matter) and take on pension reform, government inefficiency, tax reform, affordable housing, education, etc., etc., etc.?  Or do I just keep passing “responsible sounding” legislation (e.g. SB375) that only end up adding to the long list of unfunded mandates and costly responsibilities of cities and counties downstream?

Hmmm… which is easier politically and less controversial with my friends and colleagues here in Sacramento? How can I appear “do the right thing” policy-wise (good sound bites in the media), but not add to the state’s budget deficit (to show how “responsible” I am)? And most of all which choice will allow me to continue to “go along to get along” and move up the political food chain?

It’s pretty clear the choice they’ve been making. And locally we now live in a world where everything we thought, for decades, we were paying taxes for, like running our schools and fixing our roads and keeping our parks open, we now have to pay for by voting to tax ourselves again with special bonds and fees and assessments.

The Big Spin

In the 1960’s a small group of Marin residents, calling themselves the Golden Gate Headlands Committee, took on the Marin County Supervisors and fought against all odds to save the Marin Headlands, a movement that led to the creation of the Golden Gate National Recreation Area and became the cornerstone of everything we enjoy and prize today about Marin. In their time they were ruthlessly ridiculed as radicals, hippies, no-growth fanatics, NIMBY’s, communists and worse. They were not “important” people in high places. They we just regular citizens who saw the truth of things and stood up for it.

Today local elected officials and self-appointed “leaders” of housing advocacy groups shamelessly wrap themselves in the memory of those preservationist pioneers to promote massive social engineering policies and misguided, pro-development legislation in support of the MTC / ABAG / TOD / SCS / One Bay Area Plan juggernaut. And at the same time they label the groundswell of local community voices now rising against it as radicals, no-growth fanatics, NIMBY’s, and worse, apparently without the slightest awareness of the irony of it.


My question is where does this all end? When are we going to find the political will to say no to ill-conceived, financially burdensome, community destroying, unfunded mandates and begin to really with the kinds of services and development and affordable housing we really need?

Regrettably, however, I doubt we’ll see any evidence of that until the number of community voices reaches a tipping point where elected officials, political appointees, and paid planning staff begin to worry about their jobs.



Federal and State Mandating on Local Governments: Report to the National Science Foundation; Catherine H. Lovell, Max Neiman, Robert Kneisel, Adam Rose, and Charles Tobin, Riverside, CA: University of California, June 1979.

The Regional Governing of Metropolitan America; David Y. Miller; Westview Press, 2002.

Dillon’s Rule is From Mars, Home Rule is From Venus: Local Government Autonomy and the Rules of Statutory Construction; Jesse J. Richardson, Jr. Virginia Tech, 2005.

GG32 - Reform the State Mandates Process to Make Reimbursement More Cost-Efficient, Predictable and Fair; CA.Gov: California Performance Review; 2012.

California Legislative Unfunded Mandates and Realignment Impacts on Local Governments; Allen K. Settle, Ph.D. Professor, California Polytechnic State University, San Luis Obispo, California; March 22-24, 2012.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

LA Bernick September 15, 2012 at 12:00 AM
As always, a well thought through, researched and evidence based argument for doing the right thing for the place many of us call home. The lining of developer pockets under a cloak of "do-gooder altruism" is becoming unveiled, and it's about time. Thanks Bob for another great article of truth telling.
Stephen Nestel September 15, 2012 at 12:22 AM
Excellent piece. We must save Marin's heritage of wise land use, generous social safety net and livable neighborhoods from these Smart Growth zealots and money hungry developers who want to put a high density apartment building on every tiny lot in Marin along the Highway 101 corridor.
Al Dugan September 15, 2012 at 12:49 AM
Bob, thank you for the excellent job of researching this critical point and framing it susciently given the complex nature. You have connected all the dots and unfortunately the picture is not positive. The goods news is the assault now has reach such an outrageous level they are now "waking up" the average person who is working hard and actually believes his elect officials have their best interest. Keep up the great work.
Susan Kirsch September 15, 2012 at 02:24 AM
It's hard to read Bob Silvestri's articles because he's so darn smart and makes the complex understandable, which reveals an ugly picture of irresponsibility. There are several ways to respond to the magnitude of the mess at our local, state, and national leaders have created: Get Involved. Go to meetings. Talk to neighbors. Vote. Take action-- start by forwarding Bob's article.
SHROYER FOR SUPERVISOR 2014 September 15, 2012 at 06:21 AM
Your ending is brilliant! Bravo! I LOVE YOU BOB SILVESTRI!
Rico September 15, 2012 at 05:28 PM
Thank you Bob for spending so much time to compile and produce this eye opening article. I love learning new things about history, and you do a great job of researching it and sharing it with all of us, without monetary compensation as a motive. Also, I thank the M.V. Patch for publishing this, I seriously doubt that any other local media outlet would touch it with a 10 foot pole (hot stick for switching high voltage electric gear).
Rico September 15, 2012 at 07:32 PM
Just out of curiosity I decided to look at the Mill Valley Patch Facebook page (without joining). There was no post from Bob Sylvestri that I could find anywhere. I guess to get the real scoop, it's best just to go to the Patch directly.
RD September 15, 2012 at 11:44 PM
Good article. Reminds me I need to get more involved. Thanks for inspiration.
Sharon Rushton September 17, 2012 at 04:23 AM
Thank you Bob for asking the right questions and helping Marin to learn what is truly going on.
Tina McMillan September 17, 2012 at 07:49 AM
Bob your ability to put this all together, have it make sense and still have it be something that can be understood is such a gift to all of us. I continue to go back and reread your series The Best Laid Plans. Please, please consider running for County Supervisor. We need a break. We need a voice that will bring back the sanity and renew our faith in local government.
Jim L September 17, 2012 at 02:20 PM
Yes I agree, A lesson here for all posters to have something that makes sense, easy to read and all in one post . WOW ! A Patch First
David Edmondson September 17, 2012 at 03:36 PM
Though I strenuously disagree with your vision for how Marin should develop, I agree that RHNA ought to go. It perversely stifles development - Marin added more housing in the past decade than Plan Bay Area projects it to add over the next decade, yet people think Marin has hardly changed at all. By putting a mandate on it, cities and towns can't grow (or not) organically. It's an idiotic system that makes correcting the sprawl that the grand coalition allowed to happen (Northgate, Vintage Oaks) more difficult, not less.
Rico September 17, 2012 at 04:17 PM
Besides Novato, where has all this housing development in the last decade been in Marin that you speak of David ? According to you, you don't live here, and I do. I am also in the building trades and I get around a lot. From what I have observed, there has been the Fireside Apartment project in Manzanita (subsidized), the Tamalpais Commons in Mill Valley (a condo project that didn't pan out and was "apartmentized"), the San Clemente Commons in Corte Madera (subsidized) and a few small subsidized apartment projects in central Marin by the Ecumenical Housing of Marin. The total population increase from these projects was under 1000 people, but Marin also lost people and businesses during this time, the MMWD can attest to that. So David, are you sure about what you write about how RHNA would stifle development in the next decade ? Or are you just sitting at a computer 3000 miles away and looking at DOF pipe dreams. And how can we correct the urban sprawl by trying to cram in more infill high density apartment projects ? What's done is done, and it will be nature and the economy that will take care of reducing the urban sprawl that was done in the last 40 years. The economy is a very powerful force that has stifled many already built and dreamed new TODs. We don't need more TOD's and rezoning downtowns into high density residential. I think sea level rise will put the kibosh on any new development down in the urban corridor for the next few thousand years.
Stephen Nestel September 17, 2012 at 05:12 PM
Urban Sprawl-the pejorative for suburbia by the Smart Growth elites. They fail to understand that behind that housing are real people living their American Dream. They want to reduce the world to Disneylandia- an urban utopian, where streets are clean, crime is low, everyone knows their neighbors and rides a bicycle to work. The problem with these arrogant central planning bureaucrats is that to make their "grand vision" happen, they have to displace thousands of people and trample property rights of everyone. If you want to see real "Smart Growth" in action, visit the Yangzte River region of China. There they have displaced millions of people from the countryside and house them in high rise honeycomb apartments. There is an upcoming Symposium coming up in Santa Clara so that American Companies and ABAG can learn Smart Planning from the Chinese. Check out http://documents.bayareacouncil.org/TheSymposium.pdf . Unbelievable. Maybe Karl Marx was right. It will be the capitalists that will sell the rope to hang us.
Ian September 17, 2012 at 05:21 PM
Interesting piece; explains some of the history behind what has become a huge problem in California.
David Edmondson September 17, 2012 at 05:40 PM
Marin added 622 housing units on average every year between 2000 and 2010. Every town and village and CDP in Marin except Belvedere and Larkspur have added housing units, with Novato and unincorporated Marin adding the most - an average of 210 units per year each. Looking at population figures, Marin grew from 247k in 2000 to 252k in 2010. My problem with RHNA is that it goes against "nature and the economy", preventing the market from responding to demand for housing and forcing cities and towns to spend taxpayer money doing exactly the kinds of things Silvestri decries here. It promotes the kind of junky apartment housing that you think all apartments are; it promotes nonprofit housing projects, locking away property taxes for a generation; and it promotes income segregation.
Rico September 17, 2012 at 06:55 PM
David, Is that right ?, Marin only grew by 5000 people in the 2000 to 2010 period. And out of that Novato grew by about 4500 people or more. In the 2009 census, the rest of Marin showed a loss after deducting Novato's gain and every town and city in Marin showed a loss too except for Corte Madera added 136 people . I guess a lot happened between 2009 and 2010. The signs on the freeway read Novato population 52,095 for about 4 years, and in 2010 the number was changed to a little over 49,000 people. I wonder what happened ? In 2009, Mill Valley had 350 people less than in 2000, and San Anselmo had a little over 400 less. I would like to see where you are getting your data from, because from what is visible to people who live here, what the MMWD reports about declining water sales and U.S. Census counts, you numbers are way off. Oh, and keep in mind, the unincorporated areas near Novato also contributed the largest percentage of the total population increase of unincorporated areas of Marin with projects like Stone Tree, along Atherton Ave., Wild Horse Valley and Indian Valley. Growth in all the rest of Marin was flat, and that is a good thing for us who don't live in Novato.
Rico September 17, 2012 at 07:03 PM
David, If you read the Mill Valley Patch today, there is an article about Mill Valley and ABAG related things. They explain that there has been hardly any new houses built in Mill Valley in the last 10 years, but more families are moving into existing houses with more kids, and that is why the population and the school enrollment increases. Perhaps you are relying on population counts and extrapolating an estimate of new houses being built, but your numbers still don't add up.
David Edmondson September 17, 2012 at 07:44 PM
Sorry, the 2009 Census? Are you talking about the American Communities Survey? All my data came from the 2000 and 2010 US Censuses, which uses a headcount instead of a forumla like the ACS. Since the two methodologies differ, there are often discrepancies between the two datasets. And the Census tracks housing units, so I'm not extrapolating those numbers. Regarding population: Mill Valley from 2000 to 2010 gained 303 people, while San Anselmo lost 42. I really don't get the signs in Novato: the 2000 population was 47,630 and that increased to 51,904 in 2010, which is the bulk of the growth for the county as a whole. San Rafael accounted for another 1,650 new people, and the rest was a net gain of 757 (or a net loss of 804 if you include the unincorporated areas that aren't part of a census-designated "place").
Rico September 17, 2012 at 09:53 PM
It is no big deal, but the Novato Chamber of Commerce and the State signs on the freeway said that Novato had 52,095 people for a few years, and then the state changed the numbers on the signs late in 2009 to 49,600 or close to that. What I was wondering was what happened to cause this reduction in population ? Was it that people realized that they did not like the long commute from Novato and moved out to somewhere closer to where their jobs are ? And the 2009 Census report was an estimate by the U.S. Census bureau, they did one every year from 2001 to 2009, (and probably still do). I remember reading an article in the IJ in 2009 that said the DOF reported Marin had about 8,000 more residents than the U.S. Census bureau estimated that year. Different methodologies no doubt, maybe the DOF knew how many illegal aliens were here without drivers licences, not being registered to vote and not paying taxes but enroll their kids in public schools. It was interesting to read the U.S. Census reports from 2001 through 2009. In 2009, Mill Valley had around 350 people less than in 2000, and the total population of Marin bottomed out in 2004, even with Novato's substantial gains. I guess the gains in 2009-2010 in Mill Valley were more older people letting their adult children move back in after going to college and not finding any gainful employment, and also through attrition, older people selling their house to new young families moving in.
David Edmondson September 18, 2012 at 03:47 AM
Yeah, that annual census is the American Communities Survey I mentioned. What's interesting to me is that housing units rose while population decreased. I'd need to dig into the population by age numbers to confirm, but I suspect it would be due to smaller households.
Maria Escobar September 18, 2012 at 06:38 AM
ABAG/OneBayArea/PlanBayArea/MTC is the most fiscally unsustainable plan if there ever was one. City after city will go bankrupt. What a way to ruin the Bay Area, and California. Marin County is in trouble and the current politicians are ruining it.
Rico September 18, 2012 at 04:42 PM
Maybe the housing units that you saw increasing were forecast by the DOF and ABAG, a few have been built, some are sitting unfinished (especially in other parts of the region), but that doesn't mean that they are occupied. That could be one explanation about your skewed statistics. But no doubt about it, the population of Marin (except Novato) has been declining, so all this big talk about Marin needing more TOADs is just a bunch of pro-development sales hype.
David Edmondson September 18, 2012 at 05:35 PM
It's not "me" that saw it, it's the US Census, which counts completed housing units. The population of the county has increased slightly (by 846, adding the San Rafael numbers to everywhere else). Rather than dismiss the trend we'd do better to find out why this is. This might make a good post...
Trish Boorstein September 24, 2012 at 06:53 PM
Thank you Bob for this historical piece. Very informative like all your previous works. If you have a chance read, "Zoning for Affordable and Sustainable Communities: A Case Study in the Implementation of Housing Elements in Marin County", written by Public Advocates Inc., a 2009 report funded by Marin Community Foundation. http://publicadvocates.org/sites/default/files/library/marinhousingelementreportfinal081009.pdf Each city is broken down and researched providing RHNA numbers for each and actual units built. Some historical perspective is included. This is a go to manual for any Community Development Director to use to implement mandates.
Kevin Moore September 26, 2012 at 04:23 PM
David, I am glad you agree that RHNA, should go. Housing growth should be pushed by job growth in an area. Housing growth in the 2001 to 2010 period was spurred by the "Housing Boom / Bust", which was fueled by easy credit and loans that were improperly secured. The incentive to build or flip a house was huge. Up until 2007, anyone who built or resold a house looked like an economic genius. After 2008, anyone with property still under development was a "bag holder" in Wall Street terms. If you look at population growth from 1980 to 2010, you can see that Marin is flat and Sonoma's population growth looks more like the front half of a Bell Curve. http://tinyurl.com/7mz9qec Every area has a natural growth peak, which usually depends on jobs and natural resources. California, Nevada, and Florida are loaded with communities where excessive housing was built for the jobs in the area.
Kevin Moore September 26, 2012 at 04:53 PM
Another great article Bob. How do we get you to run for Supervisor? I studied to be a home appraiser and it was a very enlightening experience. I highly recommend people who are buying real estate or looking a housing issues in Marin study what drives or drives down real estate values. You can think of value in monetary terms or value in terms of "Would I really want to live there?" I worry that some of the "Infill housing" slated for Terra Linda will be built with "External Obsolescence" built in. http://propex.com/C_g_cost.htm#External Obsolescence External Obsolescence A defect (usually incurable) outside the property that negatively affects value. (An element of accrued depreciation). Examples include heavy traffic on a residential street, commercial businesses encroaching into a residential neighborhood, etc. Also, I worry about ABAG's approach, "Build houses and some transportation. Move forward." It is the cart before the horse. Not much study has been done on area resources, such as jobs, water, sewer, schools, police, and fire departments. I lived in Nevada for a couple of years, the home of "bulldoze and build out the desert". Not much thought was given to long term sustainability. Now Nevada leads the nation in unemployment and mortgages underwater. If a long term drought happens, water wars will turn Nevada on it's head.
Bob Silvestri September 26, 2012 at 06:24 PM
Thanks, Kevin. Your points about Nevada and jobs and infrastructure requirements are spot on.
Bob Silvestri September 26, 2012 at 06:24 PM
A must read by Dick Spotswood http://www.marinij.com/opinion/ci_21604206/dick-spotswood-smart-transit-hub-housing-wont-lessen


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