Game Changer in Battle

Adam Wood Steven LaMotte

Chief Administrator Building Industry Legal Defense Foundation BIA Orange County Chapter Executive Officer

Recent Lawsuit May Be Game Changer in Battle Against Cities Hostile to New Housing

While there are differing opinions on how to best address California’s dire housing crisis, the fact remains that by any metric, the supply of housing has woefully failed to meet the overwhelming demand. This is particularly true in Southern California, where according to the latest data from the U.S. Census Bureau, the Los Angeles-Orange County area has the lowest homeownership rate in the nation.

Just as state leaders have failed to implement any sort of cohesive strategy for meeting the state’s housing needs, local cities that have been outwardly hostile to new home construction also shoulder a significant amount of the blame. Despite the desperate need for new home construction, it’s not uncommon for homebuilders and property owners to be confronted by public officials and local NIMBY (Not In My Backyard) forces that are simply opposed to new housing in their communities.

However, a recently filed lawsuit may be a game changer in the battle against anti-housing policies and behavior exhibited by local governments. As reported by the Orange County Register, homebuilder Lennar Homes, along with the property owners of Westridge golf course, have filed a $100 million lawsuit against the city of La Habra relating to the city’s efforts to derail a proposal to create new homes for the community. As brought before the City Council in October of last year, the homebuilder’s proposal, known as Rancho La Habra, was planned for the privately owned golf course scheduled for closure. Rancho La Habra would have provided close to 450 desperately needed new homes for residents across various income levels.

In a city that is significantly below their goal for park space, Rancho La Habra would have also set aside almost 40 acres of new public open space, including a new public park and community center, along with over 4 miles of new trails. In addition, Rancho La Habra would have generated over $1 million in annual revenue to the city’s general fund while also contributing over $50 million for local schools over the next ten years.

Ultimately, current La Habra City Councilmembers Jose Medrano and Rose Espinoza, along with former Councilmember Tom Beamish, voted 3-0 to deny the project.

Despite the good faith efforts to work in collaboration with the city, both the homebuilder and the property owners were met with a series of unnecessary delays and the imposition of a multitude of costly fees. For example, the lawsuit details how the city disregarded the initial draft environmental impact report, forcing the homebuilder to pay over $1 million to create a new report that the city then refused to certify. The lawsuit

also outlines how the city charged the homebuilder over $200,000 in legal fees to pay for its lawyers to develop strategies to ultimately prevent any construction.

Beyond the city’s egregious behavior, there was also a concerted effort by a small group of wealthy and politically connected homeowners who worked to defeat the project. This particular NIMBY group applied substantial pressure on the city while also spending tens of thousands of dollars on political ads in an attempt to deprive the community of new housing. As stated in the lawsuit, “The City placed political expediency over the rule of law and has let a vocal minority of anti-development City residents run roughshod over due process.”

With California’s dire housing crisis, local jurisdictions across the state will undoubtedly be paying close attention to this case. The courts need to send a strong message that should cities act in a manner similar to what occurred in La Habra, cities, and ultimately the taxpayers will be on the hook.

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