The vacant former Jacobs Middle School property. | File photo.

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Late last week, the California Housing Defense Fund sent the following letter to each member of the Eureka City Council and senior members of city staff:

Dear City of Eureka,

The California Housing Defense Fund (“CalHDF”) submits this letter to inform the City of Eureka (“the City”) of the potential legal and financial consequences of ballot Measure F. CalHDF takes no position on the ballot measure itself and writes only for informational purposes.

Measure F Will Render the Housing Element Non-Compliant

The City’s Housing Element of its General Plan must provide an inventory of sites where housing is likely to be built in the upcoming cycle for each income level in its Regional Housing Needs Allocation (“RHNA”). (Gov. Code § 65583, subd. (a)(3).)

The City’s RHNA includes the construction of 231 very low-income units (including 116 extremely low-income units) and 147 low-income units. The City’s Housing Element Site Inventory allocates 80 low-income units to vacant sites, 40 low-income units to non-vacant sites, 82 low-income units to City-owned sites, and 245 very low-income units to City-owned sites.

Measure F would amend the City’s Housing Element. Specifically, it would eliminate six City-owned parking lots from Table 65. At present those parking lots are slated for a total of 80 very low-income units and 47 low-income units. Several of these sites have already been awarded state housing subsidies and have development plans in the works. Were Measure F to pass, the City’s Housing Element Site Inventory would only accommodate 165 very low-income units, falling short of its RHNA by 66 very low-income units. Because Measure F would cause a shortfall of 66 very low-income units in the City’s Site Inventory, the City’s Housing Element would no longer be in substantial compliance with state law.

CalHDF notes that Measure F includes a program that would rezone the former Jacobs Middle School site (“the Jacobs site”) with an overlay that would allow high-density residential use. The Measure would not amend the Site Inventory to assign very low-income units to the Jacobs site. However, even if adequate low-income units were assigned to the Jacobs site, the City’s Housing Element would still not be in substantial compliance with state law for two reasons:

First, Measure F states that the rezoning of the Jacobs site will be accomplished with a zoning overlay, an overlay that permits low-density residential as well as non-residential uses. This is a problem: the California Court of Appeal, 5th District, recently held that a zoning overlay does not satisfy the 20 unit per acre minimum density requirement for low-income sites in Government Code section 65583.2(h). (See Martinez v. City of Clovis (2023) 90 Cal.App.5th 193, 244.) If the base zoning or the overlay permits a density below what the Housing Element Law requires – as it would do here – an overlay zone will not bring the City into compliance. (Ibid.)

Second, the Jacobs site may not actually be available for residential development. Gov Code § 65583, subd. (a)(3) requires that the Housing Element include (emphasis added) “An inventory of land suitable and available for residential development, including vacant sites and sites having realistic and demonstrated potential for redevelopment during the planning period to meet the locality’s housing need for a designated income level, and an analysis of the relationship of zoning and public facilities and services to these sites, and an analysis of the relationship of the sites identified in the land inventory to the jurisdiction’s duty to affirmatively further fair housing.”

Given that the school district is not committed to developing residential on the site, and indeed the highest current bid seems to be from the California Highway Patrol, it is doubtful that the City could, in good faith, deem the site available for residential development. (See Ibid.) The proposed ballot measure would be replacing sites with concrete development plans and funding awards with a site that is not established to be available for development. Eureka’s Sixth housing element cycle ends on August 31st, 2027. It is extremely unlikely that a new development plan can be designed, permitted, and constructed in the next three years when no plans exist today. The site is therefore not available for development in this planning cycle.

Therefore, Measure F would expose the City to a potential determination of substantial non-compliance by the California Department of Housing and Community Development (“HCD”). Pursuant to Gov. Code § 65585, subdivision (i), HCD “shall review any action or failure to act by [the City] that it determines is inconsistent with an adopted housing element…, including any failure to implement any program actions included in the housing element….” Moreover, if HCD “finds that the action or failure to act by [the City] does not substantially comply with this article,” HCD may revoke its findings that the City’s housing element is in compliance with Housing Element Law until it determines that the City has come into compliance with state law.

Additionally, an interested party may bring an action under Code of Civil Procedure Section 1085 to determine whether a housing element conforms to the statutory requirements and to compel a city to adopt a compliant housing element. (Gov. Code §§ 65587, 65751.) CalHDF regularly brings such lawsuits as part of its mission to expand the state’s housing supply to mitigate the crushing impact of the housing crisis.

The City Will Be Subject to the Builder’s Remedy

The Housing Accountability Act (Gov. Code, § 65589.5; the “HAA”) requires approval of certain affordable housing projects that are submitted during periods of local housing element noncompliance. (Gov. Code, § 65589.5, subd. (d)(5).) Under the HAA, a city may not disapprove a qualifying affordable housing project (i.e., a housing development project that provides at least 20 percent of the total units to lower income households, as defined by Health and Safety Code Section 50079.5) on the grounds it does not comply with the city’s zoning and general plan if the developer submitted either a statutorily defined “preliminary application” or a “complete development application” while the city’s housing element was not in substantial compliance with state law. (See Gov. Code, § 65589.5, subds. (d)(5), (h)(5), (o)(1).) This statutory provision temporarily suspends the power of non-compliant municipalities to enforce their zoning rules against qualifying affordable housing projects. See California Housing Defense Fund v. City of La Cañada Flintridge, Case Number: 23STCP02614 (attached), for a recent court decision affirming the plain language of the statute in this regard.

In other words, developers will be able to propose any residential project, no matter how tall or large, as long as it is 20% affordable. And the City will be bound to approve all such projects even if the City laters comes back into compliance with housing element law, as long as the applicants submitted an SB 330 application during the period of non-compliance. For instance, in Santa Monica, a single developer proposed 4,260 housing units, including several 18-story buildings, when Santa Monica’s housing element fell out of compliance. If the City wrongfully denies such builder’s remedy applications, not only may the applicant seek judicial remedies, but the HAA specifically empowers housing organizations, such as CalHDF to enforce the act via litigation. (Gov. Code, § 65589.5, subd. (k)(1)(A)(i).)

And if the City contests such Builder’s Remedy applications, it may be liable for costs. For example, the HAA authorizes courts to award attorney’s fees and costs both to applicants and to housing organizations if they prevail in litigation to enforce the HAA. (Id. at subd. (k).) As an example, recently the City of Berkeley was fined $2.6 million and forced to pay $1.4 million in attorneys’ fees after incorrectly denying a housing development project in violation of the HAA.

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As stated above, CalHDF takes no position on Measure F, and we write only so that the City is fully informed as to potential consequences were it to be approved by the voters. CalHDF is a 501(c)3 non-profit corporation whose mission includes advocating for increased access to housing for Californians at all income levels, including low-income households. You may learn more about CalHDF at www.calhdf.org.

Sincerely,

[signed]

Dylan Casey
CalHDF Executive Director

James M. Lloyd
CalHDF Director of Planning and Investigations

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