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This San Mateo legal ruling has big implications for the state housing crisis

Posted on September 14, 2021

A legal victory for housing advocates in the city of San Mateo could have far-reaching implications as the state continues to battle a major shortage of homes.

In a sweeping show of support for the state’s ability to intervene in city planning decisions, an appeals court has sided with a developer attempting to build a 10-unit, four-story condo project — despite San Mateo officials’ claim that the development didn’t comply with their standards. It’s the first time the current version of California’s main housing accountability law has been tested in state appellate court, and experts say the ruling will impact future projects from the Bay Area down to Southern California.

“It certainly is a really important decision,” said Matt Regan, senior vice president of public policy for the Bay Area Council. “We’ve been working really hard in Sacramento — a number of organizations — to pass laws to level the playing fields and make it easier for home builders to build homes. And this, I think, is a seminal kind of case where the court has recognized that it’s the will of the legislature and the will of the people to make it easier to build homes in California.”

San Mateo, which like many cities has balked under increasing pressure from Sacramento to approve more housing, disagrees. The project the city likely now will be forced to approve offers no affordable units and does not comply with local design guidelines, according to city officials.

“We agree that expanding housing in California is critical and over the last four years alone the City has approved over 2,000 new housing units, including 430 affordable below-market-rate homes,” a spokeswoman wrote in an emailed statement. “As we evaluate our legal options in this case, we will continue to assist with development of much-needed affordable housing through inclusionary housing policies, long-range planning informed by community input, allocating local funding where available, and leveraging city-owned land to build affordable homes in our community.”

The case is the latest in a recent wave of lawsuits challenging cities that attempt to reject what advocates say are much-needed housing projects, as the state grapples with a shortage that’s driving up prices and making many cities increasingly unaffordable. It was filed by the California Renters Legal Advocacy and Education Fund (CaRLA), a nonprofit with the slogan “sue the suburbs,” which has taken several Bay Area cities to court — and won. Last year, the group won a lawsuit against Los Altos over a stalled residential and office development.

In San Mateo, the years-long saga began in 2015, with an application to build the residential project on North El Camino Real and West Santa Inez Avenue. The city denied the proposal, saying it violated design guidelines that limit height differences in surrounding properties.

But CaRLA argued San Mateo’s attempt to block the project violated the state Housing Accountability Act — California’s main way to hold cities accountable for approving housing. The law, which was passed in 1982 but has been strengthened in recent years, says cities must approve housing that meets its zoning rules, unless the development poses a specific risk to public health and safety. CaRLA argued that San Mateo, as do many cities, instead rejected the developer’s application based on arbitrary perceived flaws.

The trial court sided with San Mateo, even ruling that the Housing Accountability Act unconstitutionally interfered with cities’ ability to make their own decisions around development.

On Friday, the state court of appeal reversed that decision and affirmed the housing law. The ruling also bolsters recent efforts by Sacramento to further pressure cities to approve housing — such as Senate Bill 9, which would allow up to four units on many properties zoned for single-family homes, and Senate Bill 10, which would allow more housing around transit. Both bills are awaiting Gov. Gavin Newsom’s signature.

“This really confirms that the courts will support those efforts,” said Dylan Casey, executive director of CaRLA.

The San Mateo case garnered statewide attention, with Newsom and then-Attorney General Xavier Becerra jumping into the legal battle to support the developer. Newsom and current Attorney General Rob Bonta applauded the appellate ruling this week.

“The court’s decision protects our ability to hold local governments to account and ensures that families throughout California won’t suffer when those same local leaders refuse to do their part to approve new housing,” Newsom wrote in a news release.

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Now, the San Mateo case will return to trial court. It’s unclear how long it may take, but Casey is confident the process ultimately will lead to city officials being forced to allow the condo development to proceed.

And it may not be long before the ruling has a direct impact on other projects. CaRLA is in the middle of a legal battle with Huntington Beach over the city’s rejection of a 48-unit, four-story building.

A judge ruled against CaRLA in that case. But Huntington Beach had argued the Housing Accountability Act is unconstitutional — the same argument the appellate court rejected in the San Mateo case. Now, CaRLA is asking for a new trial in Huntington Beach, and Casey thinks the recent San Mateo win will help.

“We’re really hoping that this victory will lead to another victory down there,” he said.

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