Judge Rules Against Beverly Hills In Housing Element Case

A Los Angeles judge has ruled that the addition of a hotel (as well as three additional stories) and the subtraction of some affordable housing units doesn’t cause a Beverly Hills developer’s vested rights under the builder’s remedy law to expire. Rather, he wrote, the two changes fall – just barely – within the law’s provision that a developer can change both affordable housing and square footage by 20% without surrendering the vested rights. This marks the second time in recent months that an L.A. judge has relied heavily on interpretations from the Department of Housing & Community Development on the vested rights question. Judge James Chalfant recently ruled a 90-day window to respond to incompleteness letters resets each time a new letter is received, based in part on HCD’s interpretation. (This issue was explored more fully in CP&DR’s coverage of related cases here.) “This is the first opinion I've seen in which the principle of deference to HCD has been extended beyond the Housing Element Law, the administration of which has long been delegated to HCD,” UC Davis law professor Chris Elmendorf, an expert on California land use and housing law, wrote on X. The ruling is at least the second setback that L.A. Superior Court Judge Curtis Kin has dealt to the City of Beverly Hills on builder’s remedy projects. In early 2024, Kin temporarily suspended all of Beverly Hills’ permitting power because the city did not have a compliant housing element according to HCD. (CP&DR’s coverage of that ruling can be found here.) The current case involves a proposed projct by developer Leo Pustilnikov, who has proposed several builder’s remedy projects in Beverly Hills and has tangled extensively in court with both Beverly Hills and Redondo Beach. Under the Housing Accountability Act, Pustilnikow filed a preliminary application for a 16-story builder’s remedy project on Linden Drive in Beverly Hills that called for 200 residential units including 40 deed-restricted affordable units. Under the Housing Accountability Act, a preliminary application vests the developer’s right to build under the rules in effect at the time. A builder’s remedy project, which is permitted if the jurisdiction does not have a compliant housing element at the time the application is filed, does not have to follow a city’s general plan and zoning limitations. Pustilnikov subsequently changed his project to be 19 stories with fewer housing units, including only 33 deed-restricted affordable units, and a hotel. The city claimed that the change rendered the preliminary application invalid, thus making the project subject to discretionary approval. The city and the developer then went back and forth repeatedly over the city’s contention that the project was incomplete. In July, the city council rejected the project. (Previous CP&DR coverage of the council’s action can be found here.) Kin’s ruling came a month later in a case that had been filed by Californians For Homeownership, a group sponsored by the California Association of Realtors. In the ruling, Kin sided with the plaintiffs and rejected all of the city’s arguments. Kin noted that the Housing Accountability Act permits a 20% change in affordable housing and square footage without endangering a project’s vested rights. He noted in the ruling that the revised project including the hotel increased square footage by 19.9 and decreased the affordable housing by 17.5%, thus falling within the 20% threshold on both counties. Beverly Hills also argued that the addition of the hotel created a change of use in the project that triggered discretionary review and eliminated the vested rights. But Kin disagreed. Mixed-use projects are permitted if two-thirds of the square footage of the project is residential. “Allowing the City to disregard a Preliminary Application based on its view of whether there has been a “substantial” change in the project exposes Applicant to the subjective whims and caprice of the City,” Kin wrote. He relied in part on HCD communications to the city, which stated that the hotel was a “modification” that do not void the vesting created by the preliminary application submittal.” The Case:Californians for Homeownershp v. City of Beverly Hills, Los Angeles County Superior Court No. 24STCP02082 (filed August 12, 2025) The Lawyers: For Californians for Home Ownership: Matt Gelfand,

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