Court rules rejection of Huntington Beach condominium project was unlawful

Published: Oct. 5, 2021 at 2:30 PM CDT

LOS ANGELES, Oct. 5, 2021 /PRNewswire/ -- Californians for Homeownership, a nonprofit organization sponsored by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) that aims to address California's housing crisis through impact litigation, today announced that it has prevailed in its lawsuit over the rejection of a 48-unit mixed-income condominium project near the intersection of Beach Boulevard and Ellis Avenue in Huntington Beach. The 2019 lawsuit was the organization's first under California's Housing Accountability Act, also called the "anti-NIMBY law," which prohibits cities from denying housing development projects for vague or subjective reasons.

CALIFORNIA ASSOCIATION OF REALTORS (PRNewsFoto/C.A.R.)
CALIFORNIA ASSOCIATION OF REALTORS (PRNewsFoto/C.A.R.)

In its October 4 Order, the Orange County Superior Court held that the City of Huntington Beach "did not proceed in the manner required by law in denying approval of the project." In an accompanying Proposed Statement of Decision, the Court explained that the Housing Accountability Act required the city's elected officials to accept the reasonable findings of its professional staff, who determined in May 2019 that the project met all of the city's development standards.

"The goal of the Housing Accountability Act is to provide certainty to developers seeking to build new housing projects, like the condominium development that was illegally blocked by the City of Huntington Beach in this case," said C.A.R. President Dave Walsh. "To justify the enormous expense that goes into crafting a housing development application, developers must be able to review cities' written rules, design projects that comply with those rules, and have confidence that their projects will be approved."

California is in the midst of a severe housing access and affordability crisis. The state has a housing deficit of 2 to 3.5 million homes, and it ranks 49th out of 50 states in the number of housing units per capita. To address the crisis, the state has a practice of determining regional housing needs and requiring cities to identify areas where housing can be developed to meet those needs. But a common technique used by cities to subvert those rules is to create zoning criteria that are so vague and subjective that they allow those cities to veto any project at will. In response, the state has developed laws to ensure that cities live up to their land use plans.

The Housing Accountability Act is one such law.  It requires cities to use specific, objective criteria to assess potential housing developments and it makes it difficult for elected officials to overrule assessments made by cities' professional staffers. The law also allows nonprofits like Californians for Homeownership to sue on behalf of the public interest in increased housing, with or without the participation of the developer.

The organization first sued the city over its rejection of the Beach & Ellis project in October 2019, after the city rejected the project based on vague concerns about traffic. The city agreed to reconsider the Project but rejected it again in February 2020, citing the same vague concerns. After this second rejection, the developer and another non-profit organization, California Renters Legal Advocacy & Education Fund (CaRLA), filed their own lawsuit challenging the city's decision. The developer and the two organizations have worked collaboratively on the litigation in the time since, culminating with Monday's decision for the plaintiffs in both lawsuits.

The Beach & Ellis project will offer 48 condominiums in a four-story, medium-density building with a ground floor coffee shop. Five of the units (over 10%) will provide deed-restricted affordable housing.

The building will replace a liquor store, a single-family home, and part of a car wash. Under the city's Beach and Edinger Corridors Specific Plan, the area around the project was selected to become one of the hubs of a walkable urban neighborhood with shops and multifamily housing. The project site is located directly across Ellis Avenue from a 274-unit apartment complex built in 2015 at approximately twice the density of the proposed project.

"The Beach & Ellis project is located exactly where the city said housing developers should be looking to build, and it is exactly the sort of project the city told them to build," said Matthew Gelfand, the in-house litigator for Californians for Homeownership. "After the court's decision, the city will finally be required to live up to its own housing plans for the Beach Boulevard corridor."

Monday's order builds on a major recent appellate win for the enforcement of the Housing Accountability Act.  In California Renters Legal Advocacy and Education Fund v. City of San Mateo, the California Court of Appeal overturned a trial court decision finding the Act unconstitutional and clarified that the Act's requirements must be enforced strictly against cities that reject housing development proposals. The Court of Appeal observed that "[t]he HAA is today strong medicine precisely because the Legislature has diagnosed a sick patient." Californians for Homeownership and C.A.R. had filed a joint amicus brief supporting the plaintiff in that case.

"Monday's decision is an example of our San Mateo appellate win put into action at the trial level," said Dylan Casey, Executive Director of CaRLA, the plaintiff in the San Mateo case and in one of the lawsuits against Huntington Beach. "The San Mateo decision detailed the standards that cities must meet when they deny housing development projects, and the Court here applied those standards to determine that Huntington Beach violated the law."

The City of Huntington Beach is no stranger to litigation over its compliance with housing law. Last year, the city was forced to rezone portions of its land as part of a settlement with the state Department of Housing and Community Development, which had sued the city for violating state housing planning laws. Earlier this year, the city lost one bid to invalidate certain state housing laws, and abandoned another. And in July, the city was ordered to pay over $3.5 million in attorneys' fees in connection with a lawsuit led by the Kennedy Commission, another non-profit organization that works to address housing affordability.

More information about the lawsuit against Huntington Beach is available on the Californians for Homeownership's website at: https://caforhomes.org/hblawsuit

Californians for Homeownership is a 501(c)(3) nonprofit organization sponsored by the CALIFORNIA ASSOCIATION OF REALTORS® devoted to using legal tools to address California's housing crisis. For too long, California's cities have treated compliance with state and federal housing law as optional. The organization seeks to change that attitude by proactively enforcing the law, on behalf of the important public interest in having additional housing available to families at all income levels. Californians for Homeownership was established by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.), and it receives financial support from C.A.R. and private donors. To make a tax-deductible charitable contribution today, visit caforhomes.org.

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SOURCE CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)

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