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City Violates State Housing Law, Suit Claims

By Elizabeth Schneider

Nov. 14 -- A lawsuit claiming that the City repeatedly violates State housing law by turning down multi-family housing projects that are deemed incompatible with a neighborhood was filed on Wednesday in California Superior Court.

The joint lawsuit claims that the City makes a regular practice of denying housing projects that otherwise fit general plans and zoning standards but do not fit the character of a neighborhood, a violation of state law.

The lawsuit states that the City's discretionary practice "has had and continues to have a chilling effect on the willingness of housing builders to pursue discretionary approvals for new housing in Santa Monica."

Filed on behalf of the Santa Monica Housing Council, which has successfully challenged the city's housing policies four times, and the California Housing Council, the suit claims the City's actions have caused a "tremendous shortfall of available housing… even while the City has fostered a commercial development boom."

"What is at stake here is a very important pro-housing law with which the City should comply," said Bob Sullivan, president of the Santa Monica Housing Council in a prepared statement. "For the past four months we have attempted to convince the City Council to comply voluntarily with this important part of state housing law.

"Unfortunately, the City left us with no choice but to proceed with this litigation," Sullivan said. "Once again the City Council has chosen to waste taxpayer dollars in an effort to evade state law."

The suit claims that the City routinely ignores that the very section of state law that outlines the specifics for attaining California's housing goals

That very statute, the suit argues, prohibits a city from denying or reducing the density of housing projects unless it finds, based on substantial evidence that the "project will adversely impact the public health or safety (not welfare)."

But City officials, who say they have not come to a formal opinion regarding the lawsuit, counter that the State Constitution protects the welfare of the City's residents far beyond the provisions of the state statute cited in the lawsuit.

The State Constitution's general welfare provision, said City Attorney Marsha Moutrie, allows the City to make decisions on proposed housing projects based on neighborhood "compatibility."

"The City is clearly entitled to the protection of the California Constitution," she said. The general welfare provision, she added, is worth fighting for.

In the past officials have argued that as a charter city, Santa Monica is exempt from the state statute, which only applies to affordable housing projects and not housing in general.

"This law has been amended significantly over time," said Moutrie. "It was fairly clear that the restriction did not apply to charter cities and only to affordable housing. It's not clear that the legislature meant this to apply as broadly as the plaintiff says it does."

Moutrie added that the statute is "one of a small number of state intrusions into local zoning powers."

"Justification for that intrusion if very difficult," she said. "It's the State's way to deprive local communities of their power."

But according to the plaintiff's attorney Chris Harding, the City's argument has already been contested by a Memorandum Opinion released by the Deputy Director of the California Department of Housing and Community Development.

"This section shall be applicable to charter cities because Legislature finds the lack of housing is a critical statewide problem," the opinion reads.

As to the law's application to affordable housing "such restrictions have never been applied to the provisions of (the law) and there is no basis in the law or sound public policy for local agencies to attempt to impose them now," the memorandum states. "In other words project proposals meeting applicable general plan and zoning criteria must be approved, absent health and safety impacts that cannot be mitigated."

"We have tried to persuade the City that they need to comply with state housing laws," said Harding. "We made a legal demand in June, but at the end of September the City's answer was 'no.'"

The lawsuit, said Harding, comes at a time when the City has decided to dramatically expand its discretionary review process. Take, for instance, the Planning Commission's denial in December of the large mixed-use development on Main Street.

"The project was denied even though it met every singe rule - height, density, parking, open space, landscaping , you name it," Harding said.

Despite all of that, said Harding, the planning commission turned down the project because it was too massive for the neighborhood.

"Only at the last minute did the council approve the project on appeal," Harding said. "Even though the developer got approved, it was so difficult he has no intention of doing another project in Santa Monica because he came so close to losing."

That the project "was difficult and uncertain is the principal problem here," said Harding. "This lawsuit is trying to limit, not eliminate, discretion."

Developers have no confidence in what will happen when they come before the planning commission, he said, "and many people are bailing out at the front end."

Mayor Michael Feinstein doesn't think the City is violating State law.

"We continue to be exemplary in meeting our State mandated housing goals far ahead of most cities in California despite the fact that we are landlocked, that almost half of the city is zoned for single family homes, and that we are a mostly built out city," Feinstein said.

"Neighborhood compatibility in a city that is dense is critical and essential for insuring that both the housing fits the community and that the community continues to support our pro-housing policies," he said.

"My concern with this litigation, and much of the litigation that has proceeded it, is that it is more concerned with quantity rather than quality and that in general the actions of the litigant don't seem to appreciate the need for affordable housing as part of our overall housing profile," the mayor said.

The lawsuit also claims that the City's actions have increased traffic and jacked up the cost of housing in Santa Monica.

According to the lawsuit, the state legislature has found that "the excessive cost of the state's housing supply is partially caused by activities and policies of many local governments that limit the approval of housing.

"Among the consequences of those actions are discriminations against low-income and minority households, lack of housing to support employment growth, imbalance in jobs and housing, reduced mobility, urban sprawl, excessive commuting and air quality deterioration," according to the legislature's findings.

Planning Commission Chair Darrell Clarke doesn't buy the claim.

"They're claiming we're denying all kinds of projects," Clarke said. "We don't have a track record of denials. It's a track record of approving projects that have been continued so that applicants can make design changes, that's not a denial.

"I can't think of anything that was ultimately denied," Clarke said. "In terms of residential projects, I can't remember one that has been turned down."

Most projects that come before the commission, said Clark, are ultimately approved as "better projects."

"Based on my experience on the planning commission the simple fact is that we are approving all kinds of projects perhaps after improvements are made in design and neighborhood compatibility," he said. "We're working with the applicant and coming to a result."

"It may take a little longer but we're approving them," he said.

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