Fight over Silicon Valley dream house leads to an unusual legal challenge
Housing advocates begin challenging wealthy suburban communities
Jyothy Reddy and her family spent $2.5 million on a big empty lot in Monte Sereno to build her dream house.
The former tech executive and current real estate investor attacked the project with logic and thoroughness — directing her architect to study home designs in the neighborhood and to check off each box of the city’s strict planning and zoning rules. She submitted plans to the city but was met with vocal opposition from a handful of neighbors.
The project failed in two contentious votes, despite revisions and an endorsement from city staff. “It was a very high-techie presentation,” Reddy said of the initial pitch. “We failed miserably.”
Now, in an unusual strategy, Reddy and a nonprofit housing advocacy group are each suing Monte Sereno for possible violations of the state’s recently strengthened Housing Accountability Act, which is designed to encourage development. The suit by the nonprofit YIMBY Law is part of a larger, more aggressive strategy by housing advocates to begin holding cities accountable for small development decisions — even a single family home — amid a statewide housing shortage.
“It’s important to let city attorneys know we’re watching,” said Sonja Trauss, executive director of YIMBY Law in San Francisco, which is asking a judge to overturn the City Council’s decision.
The council rejected the plan in June after an emotional public hearing. Three councilmembers said the project design was incompatible with the neighborhood and city standards and endangered three trees on the property.
YIMBY Law has recently delivered warning letters to Sausalito and Culver City in Southern California over other single-family home projects. So far, cities have been willing to negotiate approvals of projects rather than spend $10,000 or more fighting the suits, Trauss said.
The group aims to pressure cities to comply with the Housing Accountability Act, which was amended in 2017 to make it easier to build homes in existing neighborhoods. State law now prohibits cities from rejecting projects that meet local zoning and general plan standards unless a city can prove they are a health and safety hazard.
Matt Regan, senior vice president of public policy at the Bay Area Council, said the updated act was intended to cover all housing. “It puts cities on notice — they have to live up to their own standards,” he said. “It’s fair.”
Regan said he has not heard of a lawsuit claiming violations of the act on a single home project. “It’s unusual for a city to deny permits for a single-family home that meets its zoning standards,” he said.
But Todd Williams, Reddy’s attorney, said he’s seen an increase in the number of such cases recently. The housing reforms, he said, “made the bar much higher for a city to say a project doesn’t meet their standards.”
Even for a council decision on a single-family home, Trauss said, a suit “adds a huge amount of risk” for cities to decline projects.
Trauss said the small projects may not add substantial housing to a city, but across the state they can add up to thousands of new homes. Roughly 70% of the state is zoned for single-family homes. California has the highest housing costs in the country and by some estimates is millions of homes and apartments short of meeting the needs of its population.
In the latest state housing development cycle, Monte Sereno nearly doubled its goal for new luxury housing and met its target for apartments for very low income residents. But it built less than 10% of its state-mandated goals to produce housing affordable for the middle class.
Reddy bought the 1-acre lot in Monte Sereno in the 16000 block of Greenwood Lane in January 2018. The vacant property, clear but for a few oak and eucalyptus trees, is sloped and sits at the bend of a residential street. Several homes sit higher atop the hillside.
The community consists of spacious, luxury homes on large, wooded lots. The median value of a home value in Monte Sereno is $3.3 million, according to Zillow.
Reddy quit tech several years ago to develop residential properties in Silicon Valley. But this project was her family home. The family expected to move from Almaden Valley and settle into their new, custom-designed, five-bedroom home with a pool in the quiet, exclusive neighborhood.
The project galvanized some neighbors. A group brought up their concerns about the custom home at an initial review by the city’s site and architecture commission. The advisory board rejected the proposal in November, criticizing the design, size and potential impact on a row of a neighbor’s eucalyptus trees.
Reddy went back to the drawing board. She met with neighbors, solicited support and ideas, and had the architect redraw plans for the two-story home. The family has spent at least $150,000 on plans and preparations so far.
City staff endorsed the revised plan. “The proposed new home design is compatible with the surrounding neighborhood of mixed architecture and is similar to homes close by,” city planners wrote.
But several neighbors continued their opposition, filing hundreds of pages of comments and testimony with the City Council, arguing they didn’t have enough time to review the project and that it didn’t fit the character of the neighborhood.
“What they are still trying to do is to put a massive flat-land home on a small, sloped lot,” one neighbor wrote in a 100-page opposition.
The council rejected the plan on a 3-2 vote at a June meeting, after hours of debate. Mayor Liz Lawler, who voted against the project, cited the lawsuit and declined to comment this week. Messages left for other city councilmembers and the city manager were not returned.
Reddy’s suit claims the council bowed to neighbors’ pressure, ignoring state law that requires them to approve projects that meet zoning standards. The suit also claims councilmembers were improperly biased, coached opponents on how to defeat the project, and prepared a denial motion months before the hearing.
Reddy said the process has been painful and frustrating. “We were surprised and shocked,” she said. Had they known the difficulties, she said, “We would have invested elsewhere.”