Blocking a Los Angeles housing development over a mountain lion could cost the city $20 million or more and still fail to stop the project.
L.A. has 60 days to approve 398 homes at Woodland Hills Country Club or face a lawsuit that could cost it that much, according to a letter from the club’s attorney, Dave Rand, sent to the city Friday. A judge could order the city to pay punitive damages for the delay and rule that the development still must proceed, Rand confirmed with HousingWire TBD.
If the club prevails in its case for damages provided under the Housing Accountability Act, the city would owe fines of at least $19.9 million. It would also owe attorney’s fees, costs and compensatory damages.
The letter says that exposure “could therefore cost the city well in excess of $20 million.” Rand wrote that he can’t imagine the risk to taxpayers “is worth it.”
Rand wrote that the city’s denial violated both Assembly Bill 2011 and the Housing Accountability Act. The letter invokes AB 712, which extends any limitation period by 60 days from the letter’s date. That keeps the club’s legal options open while the city weighs its response.
The damages math on housing development
Rand explained the fine math on social media. The base fine is $10,000 per unit for a violation, and $50,000 per unit for a finding of bad faith.
AB 712 raises the fine to an automatic $50,000 per unit if the city has lost in court at least once in the same housing element cycle. At $50,000 a unit, 398 homes come to the $19.9 million cited in the letter.
The letter includes a claim for damages, which follows an Oct. 23 ruling from the Second Appellate District. It held that a homeowner could seek damages when a city misses a mandatory permit deadline.
That case involved an accessory dwelling unit, not AB 2011. Legal scholars have said its reasoning could reach other ministerial housing laws, including the one Rand cites.
The state housing department has set a Nov. 25 deadline for Los Angeles to respond to its own letter. The department said it could refer the matter to the state attorney general.
Where the threat has worked
Other California cities have backed down when the cost of continuing to dig their heels in became clear. Glendale’s council voted 4-1 last October to reject Trammell Crow Residential’s 682-unit plan for a former Sears store. The project included 72 very low-income units.
The state housing department issued a notice of violation Dec. 30. It warned of fines up to $34 million if the city did not reverse course. Glendale’s council reversed its denial in late January, three months after rejecting the project. No lawsuit was filed, but the developer’s attorney had called the case a “slam dunk” under the Housing Accountability Act.
Morgan Hill in Silicon Valley took a similar path. City officials settled with High Street Residential, a builder’s remedy developer, to avoid costly litigation with the developer and the state.
The 105-home project had been hanging in legal limbo for three years. The city council unanimously approved it last week.
