In the latest expansive ruling in favor of housing developers, a Los Angeles Superior Court judge has ruled that La Cañada Flintridge’s decision not to move forward with a builder’s remedy project constituted “disapproval” of the project under the Housing Accountability Act and has ordered the city to move forward with approving the project as a builder’s remedy application.

“While the City Council may not have voted to deny the conditional use permit, tentative tract map, and tree removal permit,” wrote Judge Mitchell Beckloff, “the City Council voted on May 1, 2023 and determined the Project could not proceed as the project proposed-a Builder's Remedy project. Because the Project was proposed as a Builder's Remedy, the City Council's May 1, 2023 vote on the project application was a "disapproval" within the meaning of the HAA.”

The La Cañada Flintridge decision adds to recent housing element rulings in favor of developers comes after an Alameda County judge’s ruling that Berkeley owes a developer a total of $4 million for denying a builder’s remedy application and a Los Angeles judge’s decision to suspend Beverly Hills’ permit authority because of defects in its housing element. (In addition, Davis and Clovis have recently settled major housing element lawsuits. For a summary, see my recent Insight column here.)

The La Cañada Flintridge case is perhaps the most closely watched builder’s remedy case in the state. (Previously CP&DR coverage of the case can be found here.) The 39-page ruling, issued on March 4, breaks new ground because it interpreted a refusal to move a builder’s remedy application forward as a project denial. The city repeatedly argued that it had the power to deny the application because it adopted a compliant housing element. The city adopted a housing element in October 2022 and, after review by the Department of Housing & Community Developed, adopted a revised element in February 2023. The applicant, 600 Foothill Owner LLC, filed the builder’s remedy application in November 2022. 600 Foothill is controlled by Cedar Street Partners, a Glendale-based developer.

A major legal question in several builder’s remedy cases has been whether a local jurisdiction can self-certify that its housing element is compliant with state law or, instead, needs approval of the state Department of Housing and Community Development.

However, Judge Beckloff did not rule on this question directly. Rather, repeatedly noting that he was “exercising … independent judgment,” he ruled that the October 2022 housing element was not compliant with state law.

The case in question was not the case the developer brought against the city but, rather, a companion case brought by the California Housing Defense Fund.

In the case brought by the developer, the City of La Cañada Flintridge took issue the idea that the Department of Housing and Community Development has independent authority to determine whether a housing element is compliant or not. Only the courts have that power, the city said in its recent rebuttal to the developer’s July lawsuit.

 In the rebuttal, the city also said it doesn’t have to pursue Affirmatively Furthering Fair Housing (AFFH) goals required by HCD because the U.S. Supreme Court recently struck down affirmative action in Students for Fair Admissions v. Harvard.

In its lawsuit, the developer alleged that after it approved the housing element in October 2022, the city engaged in a shifting position, requiring additional information to deem the builder’s remedy complete, then supposedly applying new city-approved standards to the project and “backdating” a revised housing element before finally denying the project in May. (CP&DR’s coverage of the developer’s lawsuit can be found here.)

In its rebuttal to the Cedar Street Partners lawsuit, the city argued that does not have the legal power to determine whether or not a housing element is in compliance. “HCD cannot be given or wield any power to finally determine that a Housing Element is not “substantially compliant” with the Housing Element Law,” said the city’s response, adding that only the courts can decide whether a housing element is in compliance with state law. (Assemblymember David Alvarez, D-San Diego, recently introduced AB 1886, which would resolve this issue by saying HCD approval is required.)

But in the California Housing Defense Fund case, Judge Beckloff concluded that even by the city’s own reckoning, it did not have a compliant housing element in October 2022 – as evidenced by the fact tht the Ctiy Council adopted a revised housing element in February 2023 based on comments from HCD.

The city also took a strong position on Affirmatively Furthering Faith Housing (AFFH), which has been a strong emphasis in housing elements by HCD ever since Gustavo Velasquez took over as director. Valasquez was Assistant Secretary for Fair Housing at the federal Department of Housing and Urban Development in the Obama Administration and championed a federal AFFH rule there. Since moving to Sacramento he has similarly championed AFFH in virtually all HCD activities, including housing elements.

But La Cañada Flintridge claimed the recent U.S. Supreme Court ruling striking down affirmative action in higher education (Students for Fair Admissions v. Harvard) rendered the whole AFFH discussion moot.

In the California Housing Defense Fund case, Judge Beckloff embraced the city’s view that only the courts can decide whether a housing element is in compliance with state law. But then he ruled against the city.

On the question of whether the housing element was in compliance with state law, he found, among other things, that the city had not done an adequate job of analyzing whether non-vacant sites identified for housing would actually be available during the period the housing element covers (2021-2029).

On the Affirmatively Furthering Fair Housing argument, the judge focused on the fact that many of the sites identified for low-income housing were in close proximity to a freeway. The city argued that it has met AFFH analysis requirements by reaching out to various stakeholder groups, but the judge ruled that “outreach alone does not substantially comply with the requirement. He added, “Outreach does not constitute analysis.”

The Case:

California Housing Defense Fund v. City of LaCañada Flintridge, Los Angeles County Superior Court No. 23STCP02614 (Ordered filed March 4, 2024).

The Lawyers:

For California Home Defense Fund: Lisa Ells, Rosen Bien Galvan & Grunfeld,

For City of La Cañada Flintridge: Adrian R. Guerra, It Aleshire & Wynder,