The mayor of Encinitas warned that triggering a certain state law was the “nuclear option.” City Council members said the law forced them to approve a controversial apartment project under “absolute duress and coercion.”
A San Diego City Council member said it would be “unacceptable” if the law kicked in in his city and was a reason why San Diego shouldn’t scrap its accessory dwelling unit program.
Del Mar appears to be the next place where the state’s so-called “builder’s remedy” law will be part of the decision over whether to allow a development the city doesn’t want.
Not long ago, assessing what impact the statute would have was largely a theoretical exercise. Not anymore.
A recent court ruling convinced city officials in La Cañada Flintridge to finally stop opposing an affordable housing project and drop legal appeals.
The builder’s remedy has become part of the state’s growing arsenal of laws to require local jurisdictions to provide more housing, especially for lower-income residents.
For years, there was little consequence for those that didn’t comply. But the state added teeth to the demand that local governments adopt and adhere to a state-certified “housing element.” In recent years, the state began filing lawsuits — or threatening them — against cities that resisted.
The builder’s remedy has been around for decades but was strengthened in 2019. The law allows projects that include a certain amount of units set aside for lower-income residents to be built regardless of objections from local officials if the development was proposed when the jurisdiction did not have a certified housing plan.
That’s what happened in La Cañada Flintridge, a small, wealthy enclave in the Verdugo Mountain foothills northeast of Los Angeles. The city rejected a proposal for an 80-unit mixed-income development with a hotel and office space. At the time of the city’s action, officials noted they had a housing plan in place.
But the city didn’t when developers submitted the project, which allowed them to apply under the builder’s remedy provision. The city lost in court, and then appealed. But in late February, the court ordered La Cañada Flintridge to post a $14 million bond while waging the appeal, according to the San Francisco Chronicle.
The bond element is allowed under a relatively new component of state law.
The $14 million was what the judge determined to be the potential loss to developers due to the city’s holdup of the project, including lost profits, inflation, the increasing cost of materials, and interest and utility costs. The city also could have been on the hook for legal fees — its own and the opponents’ — totaling hundreds of thousands of dollars, maybe millions, if the appeal failed.
Apparently, the prospect of losing what amounts to a third of the city’s $42 million annual budget and possibly more convinced the city to end its yearslong fight.
Del Mar could face a similar situation, as Luke Harold of the Del Mar Times recently reported. There are some differences, however.
The proposed 259-unit mixed-income Seaside Ridge project was rejected multiple times by the city. The developers then filed a lawsuit citing the builder’s remedy. Like La Cañada Flintridge, Del Mar now has an approved housing element, but didn’t when Seaside Ridge was proposed.
Last year, the developers suspended their lawsuit to await the outcome of the La Cañada Flintridge case. They say a court date has been set for June 13.
While courts have decided in favor of builder’s remedy applications, at least one judge ruled the provision doesn’t pertain to projects in California’s more regulated coastal zone.
Another quirk is that the city and leaders of the Del Mar fairgrounds agreed to restart negotiations over affordable housing on the fairgrounds, though it’s unclear whether that would affect the Seaside Ridge case.
“Prior to filing our lawsuit last year, we often expressed to the city our desire to meet with them and collaborate. Unfortunately, they always declined,” Darren Pudgil, spokesperson for Seaside Ridge, said in an email. “As for the new developments in La Cañada Flintridge, we assume city leaders have been watching this case very closely, as they should.”
Clem Brown, Del Mar’s assistant city manager, said the city would not comment because of the pending litigation, but referred to an earlier statement on the project.
“The Seaside Ridge application was found incomplete because of the Applicant’s steadfast refusal to submit documents that would allow the City to amend its Local Coastal Program,” according to the statement on the city’s website. ” . . . and without an amendment to the Local Coastal Program, the Project could not be approved under the California Coastal Act.”
Elsewhere, just the potential of the builder’s remedy has shaped some municipal actions. City officials in Encinitas and San Diego suggested they could have their housing elements decertified by the state if they went too far in prohibiting housing.
Last month, Encinitas City Council members said they were acting under “absolute duress and coercion” in rejecting appeals against the 448-unit Quail Meadows project, according to Barbara Henry in The San Diego Union-Tribune.
“It will not take long to get one or more builder’s remedy applications in place; that is the trigger point,” said Mayor Bruce Ehlers, whose city for years had opposed the state’s demand for more housing. “It may feel good to sit up here and say, ‘Hell no,’ but you’re ultimately costing Encinitas a hell of a lot more and causing irreversible harm.”
He said heading down that path was the “nuclear option.”
The San Diego City Council recently voted to limit the maximum number of accessory dwelling units allowed on large lots. Councilmember Raul Campillo told Scott Lewis of the Voice of San Diego that doing away with the entire ADU program as originally proposed could put the city out of compliance with its housing element — and subject San Diego to builder’s remedy action.
“That’s completely unacceptable to me,” he said.
One of the partners in the La Cañada Flintridge project, Garret Weyand, made a bold declaration after the city dropped its appeal.
“Builder’s remedy is probably going to be one of the most successful laws to build housing in the state of California,” Weyand said.
Once that might have been dismissed as hyperbole. Today, maybe not so much.
What they said
Bret Stephens, New York Times columnist.
“Democrats should insist on making English the official language and then demand that Trump learn to speak and write it properly.”
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