Los Altos can’t escape state housing law. Today, CaRLA won in court.

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Last year, we filed a lawsuit against the City of Los Altos for denying an affordable housing development in violation of SB35 shortly after it was enacted. Today, we’re excited to announce our victory in court. Not only did we win, our hard-fought ruling solidifies the validity of one of the most powerful tools the California legislature has passed in recent years: Senator Weiner’s Senate Bill 35.

This ruling makes it clear that cities cannot bluff their way around state law, by making up reasons for denying housing with no basis in their own laws. The combination of SB 35, the Housing Accountability Act, and the State Density Bonus law provide a route for developers, housing non-profits like us, and even individual Californians to challenge California cities most resistant to new development, and farthest behind on their goals for affordable housing. This decision shows that cities have no discretion to deny developments that qualify for the protections provided by these laws, and will face consequences in court if they attempt to ignore their requirements.

This is No Way to Review a Housing Development

Before we got to a lawsuit in this case, the developer had to navigate a permitting process with the city. At every step in this process, Los Altos attempted to prevent approval of any development, including taking extraordinary steps to prevent the developer from challenging any of their actions along the way. After spending years trying to navigate the city’s normal discretionary review process with no success, on November 8, 2018, the developer proposed a modest mixed-use project qualifying for protection under the newly enacted SB 35.

Under SB 35, cities that have failed to comply with state housing law targets for development of low and moderate income housing are required to provide streamlined ministerial approval to certain projects that include income-restricted affordable housing. The state’s Department of Housing and Community Development is the agency charged with determining when a city has failed in these targets. Unsurprisingly, Los Altos is one of the cities falling the farthest behind on their affordable housing targets. In fact, the city was so far behind that projects with as little as 10% affordable housing were now eligible for the SB 35 ministerial approval process.

The developer submitted their application to the planning department, stating their intent to pursue a project under SB 35’s streamlined approval process. In correspondence with the city over several weeks, city staff tried to claim that the proposal:

• Failed to provide “sufficient parking” despite the fact that the proposal provided 18 parking spaces for 15 units, exceeding requirements in city code and SB 35,
• Lacked “adequate access/egress t0 the proposed off-street parking” even though no standard for access/egress exists,
• Claimed that the city was not subject to the 10% SB 35 streamlining based on an outdated HCD determination,
• Claimed that the developer had actually submitted two separate applications, one for SB 35 and one for standard discretionary review because the permit included the city’s standard development form (Los Altos had no separate form for SB 35 applications; the developer could only choose from one of these limited options before proceeding.)

What became abundantly clear through this process was that the city was not making a good faith effort to comply with state law or even its own development code. Instead, the city was fabricating any reason it could to prevent this development from advancing, operating wholly outside the law.

At this point this became more than just an SB 35 issue. The Housing Accountability Act requires cities to inform project applicants with a letter of any zoning inconsistencies within 90 days of an application being deemed complete. This letter must cite the specific laws in question and explain why the project does not comply. If no such letter is issued, then the application is automatically deemed complete at the end of the timeline. The city issued no such letter for their SB 35 “project”. The timeline ran out. Regardless, the city took the opportunity to declare their “separate” non-SB35 “project” application incomplete.

The story doesn’t end here though. Unfortunately, as you may already know: California.

The developer, having now survived this much of the gauntlet, declared their intent to file a lawsuit challenging this circus. In order to do so, the developer must have exhausted all of their administrative remedies, such as appealing to city council. Los Altos’ appeal process does not apply to ministerial projects, however, leaving the denial letter as the final decision that could be challenged in court. The developer asked the city to confirm its own statute to make the developer’s path forward clear.

Instead, Los Altos responded with the miraculous assertion that the developer was required to appeal their unappealable denial to city council. Again, the city was inventing new law from whole cloth and thinking they could get away with it. Not only was this interpretation unsupported by Los Altos’ own code, but the city also waited to reply to the developer’s request until the day the appeal was due. This gave the developer a mere 8 hours to file an appeal or lose the chance to challenge the denial.

The 40 Main St. project was now conclusively dislodged from this reality that you and I are both experiencing and entered into a new dimension of local control. The developer again agreed and went through the appeal process. By now 40 Main St. was on our radar; we submitted comments to try to push the city down a better path. After the city predictably denied the appeal, failing to make any of the required findings under the HAA, we filed our lawsuit. Even at this stage the city tried to operate outside the law. They claimed that the lawsuits were filed too late, claiming that the very appeal process that the city had insisted upon was in fact illegal, and that the lawsuits should have been filed within 90 days of the original letter replying to the developer’s permit application.

This Decision Forces Los Altos to Operate Under the Law

The decision that we received from the court covers a lot of ground, but at its core it stands for the proposition that California cities must take state law—and their own self-written development standards—seriously when reviewing development applications. California cities have grown accustomed to using discretionary permitting processes to avoid approving housing that complies with all of their own rules for development. Now we have statutes that mandate ministerial, non-discretionary processes for reviewing development, and cities like Los Altos are trying everything they can think of to keep operating under their old lawless practices. This case’s long and twisting history shows how far cities will go: ever-changing requirements, reinterpretation of laws the city wrote themselves, inconsistent and shifting processes for review, and other general misdirections. Here, Los Altos lied and put up barriers to approval at every step, never expecting a court would hold them accountable. This decision established exactly the accountability we should expect from cities.

Outside of the core validation that Los Altos must take state law seriously, the court also made a number of legal determinations that clarify the requirements of state law and make the consequences of non compliance more clear for cities in the future; today, CaRLA won much more than the approval of a single housing project. The court rejected the city’s argument about the statute of limitations for the case, saying that plaintiffs must be able to rely on the city’s representations about their own appeal process. The court applied the Housing Accountability Act to protect a project subject to a ministerial approval process, making clear that the HAA’s protections can help other housing developments—such as ADUs—subject to ministerial processes. Because of Los Altos’ wanton disregard for the law, the court also found that they had acted in bad faith, allowing the court to order approval of the development, and potentially subjecting the city to dramatically increased fines if they fail to comply.

Finally, the court opened the door for CaRLA and the developer to recover our attorneys fees and costs. This finding sends a message along with a powerful financial incentive that cities cannot get away with presenting an illusionary permitting process such as what Los Altos engaged in here. The world economy may have shut down, but cities like Los Altos, Berkeley, San Mateo, and others will continue to violate the law. CaRLA needs your continued support to be there and hold them accountable during this crisis. Please consider making another donation, becoming a dues-paying member of the Avocado Watch, or increasing your existing subscription. The passage of SB35 was a landmark development in California housing law, but it won’t mean anything if we can’t enforce the promises it contains.

Read the full order in our document library.

CONTACT & DONATE TO THE CALIFORNIA RENTERS LEGAL ADVOCACY & EDUCATION FUND HERE