Bay Area Apartment Project Can Move Forward After 12-Year Legal Battle

A California Supreme Court decision settling a 12-year-old case could have ripple effects for multifamily developments in cities where the imbalance between supply and demand is putting housing out of reach for low- and moderate-income residents. 

In declining to hear the appeal of a group called Save Lafayette that sought to stop a 314-unit development, the court brought a protracted legal fight to a close while providing housing policy analysts with an example of how the legal landscape and public opinion have shifted toward a more pro-housing stance.

“This building was the genesis of the YIMBY movement, and the legal victory coincides with a thriving pro-housing movement across California,” Bay Area Council Vice President of Public Policy Louis Mirante said. “Developers I have talked to feel more confident about their ability to entitle their projects in California.”

Twelve years ago, Dennis O’Brien, founder of O’Brien Homes, proposed developing the apartment complex on a 22-acre parcel in the town of Lafayette, California, an East Bay suburb nestled on the eastern flank of the Berkeley Hills. 

“We thought it might take five years, 10 years tops, to get underway,” O’Brien said. “We never thought it would take this long.”

What ensued was a long legal battle beginning with Save Lafayette’s lawsuit against the city of Lafayette for approving the moderate-income housing complex, saying the environmental analysis was incomplete and conflicted with the city’s general plan. Representatives of Save Lafayette didn't respond to requests for comment.

But with the court’s decision this month, Mirante said he is confident the Lafayette Terraces resolution is a major win for housing advocates. 

“The legal victory shows that the Housing Accountability Act can triumph and compel local governments to do what they are committed to do through their approved zoning codes,” he said. 

The city of Lafayette used HAA to justify the approval of the Terraces. 

Mirante also said well-heeled neighborhood groups opposed to certain developments won't be able to use the deliberative nature of the courts to slow the process. 

“Judges are becoming more aware of the problems and less patient with NIMBYs trying to abuse the system,” he said. 

Mirante pointed to Livermore, California, where a group called Save Livermore Downtown was required by a superior court judge to post a $500K bond to appeal the city’s approval of a 150-unit affordable housing project. The bond was ordered to account for “costs and damages incurred as a result of the affordable housing project’s delay." 

However, YIMBY Law President Sonja Trauss said she remains skeptical that the Lafayette Terraces resolution is a watershed moment. Motivated groups like Save Lafayette won't necessarily be dissuaded from filing lawsuits, she said.

“The thing is these guys never had a good argument the whole time,” Trauss said. “They just try to junk up the courts and figure justice delayed is justice served."

Trauss and YIMBY Law are widely credited with pioneering the present legal applications of the Housing Accountability Act, a California law passed in 1982 requiring the state to provide a streamlined and predictable process for the approval of housing developments and preventing local jurisdictions from engaging in excessively prohibitive behavior. 

“The Courts have once again affirmed that the City complied with the Housing Accountability Act and the California Environmental Quality Act in its environmental review and approval of this 20%-affordable housing project,” Lafayette Mayor Carl Anduri said in a statement. 

Regardless of this ruling’s impact on housing in California, Mirante and Trauss said more has to be done to create a more favorable environment for housing. Specifically, the California Environmental Quality Act presents significant hurdles.

“CEQA is too open-ended, and it encourages NIMBY groups to keep filing lawsuits,” Mirante said.

He said the law should set forth a finite set of impacts to analyze so that project opponents aren’t permitted to raise new questions in the late stages of the development process.

In the wake of a Berkeley decision, California Gov. Gavin Newsom issued a statement indicating he had appetite for reform.

“Our CEQA process is clearly broken when a few wealthy Berkeley homeowners can block desperately needed student housing for years and even decades,” he said in a tweet. “The law needs to change and I am committed to working with lawmakers this year to making more changes so our state can build the housing we desperately need."

So far, no major legislation has been announced. 

But it is an indication of the major shift in perception in California around environmental laws and their conflicting relationship with housing production. 

“There really has been a sea change,” O’Brien said. “Watching the attorney general sue cities like Huntington Beach for not following the housing laws, from a developer standpoint, we’ve never had help like that before.”