Judge: Rancho Mirage broke pledge to develop new affordable housing
2-year timeline lapsed, but city says projects in works
Five years after the city of Rancho Mirage committed to promptly develop new affordable housing as part of a lawsuit settlement, a Riverside County judge found the city violated that agreement by failing to do so within two years.
The ruling in late March from Superior Court Judge Manuel Bustamante came several years after the last resident who remained in a now-vacant mobile home park in Rancho Mirage, Veronica Juarez, renewed her legal fight against the city, alleging it failed to follow through on a commitment to issue a building permit for 126 new affordable housing units following an earlier suit.
Juarez’s legal fight stems from her time at Rancho Palms Mobile Home Park, a 126-unit neighborhood off Peterson Road that consisted mainly of low-income Latino residents and families with young children. The city bought the park in 2009, when it was still open.
Following the purchase, the city’s housing authority owned the park itself, but not the mobile homes, which belonged to residents. At the time, city officials said the homes were too old to be inhabitable much longer, and they planned to redevelop the land into affordable housing for seniors.
But that has yet to happen, and the land sits empty today. After buying the property, the housing authority purchased occupied homes from their owners, then razed the vacant coaches they left behind. A 2019 investigation by The Desert Sun found the city had spent roughly $11 million on the park over the prior decade.
Remaining residents slowly left, and by 2013, only one family — Juarez, her husband and her four children — was still there. The family, which reported paying roughly $350 a month for their space, departed Rancho Palms for Cathedral City in 2017.
In response to the court ruling, City Manager Isaiah Hagerman told The Desert Sun the city “was maybe overambitious in agreeing to issuance of an affordable housing building permit within two years given the red tape, regulations, lawsuits and funding challenges faced by affordable housing development.”
“However, the City is dedicated to advancing affordable housing in our community,” Hagerman said in an email. He pointed to Rancho Mirage’s Housing Element, a required plan that state officials signed off on in 2022, as evidence of the city’s recognition of the importance of affordable housing.
Hagerman also noted several development agreements for new affordable housing plans that have gained recent approvals from the council, as well as another in the pipeline at city hall.
An attorney representing Juarez declined to comment further on the judge’s ruling, which followed a bench trial in late February. The lawsuit will now move to a second trial phase to determine whether Juarez suffered damages, with a status conference set for mid-April.
Looking back
Years before Juarez’s family left the mobile home park near Highway 111, she and three other residents had filed suit against the city, alleging violations of state law meant to protect mobile home park residents amid the relocation process. After several years in court, the city agreed to a settlement worth roughly $500,000 in April 2019. Neither party admitted liability as part of the agreement.
But another part of that settlement — in which the city agreed to issue a building permit to start construction on 126 new affordable housing units at the site within two years, by April 2021 — spurred Juarez to file a new complaint in 2022, alleging the city had not completed those terms.
Specifically, the complaint filed in Riverside County Superior Court alleged the city violated two terms of the settlement: the provision to issue a new building permit within two years, along with a clause giving Juarez and the other plaintiffs first access to that housing.
The city, in its court filings, responded that there has been “little interest” in the private sector in constructing and operating affordable housing in Rancho Mirage.
“Prior to approving building permits for affordable housing projects, a developer must apply for them,” the city said in one of its past responses. “The City cannot approve a permit without a suitable and appropriate project application.”
The city maintained that argument in the recent trial, while also noting the state’s approval of its latest Housing Element, a state-mandated plan to identify and allow for affordable housing development within Rancho Mirage over an eight-year cycle.
In the ruling, Bustamante wrote it’s clear that issuing a building permit for affordable housing “is but one step of a much larger and complex process that Defendants emphasized though the course of the trial is often a multi-year process.” But he added that city officials failed to attempt several recommended steps toward attracting affordable housing developers.
The ruling also notes testimony from Marcus Aleman, the city’s housing manger, that at least four developers had expressed interest in building affordable housing in Rancho Mirage since 2018. But the ruling states the city didn’t do anything to assist or follow up with them after the initial inquiries.
“At best, Defendants bound themselves to a too optimistic timeline (i.e., 2-years) for issuance of a building permit for 126 affordable housing units,” Bustamante wrote. “It is also clear that Defendants did not do everything possible to satisfy completion of the material term.”
The court also found the city did not breach the “right of first refusal” provision of the settlement agreement, given no building permit application has been submitted to trigger that clause.
New affordable housing in the works in Rancho Mirage
While the final outcome of the lawsuit will be determined at a subsequent trial phase, city officials have taken recent steps to pave the way for new affordable housing complexes.
Hagerman, the city manager, noted the city council approved four “disposition and development agreements” with affordable housing developers for a total of 37 acres of land in December. Some of the land is being sold by the city for one dollar, Hagerman said.
The projects still must gain the necessary financing to move forward, but Hagerman said the city expects over 750 affordable housing units to be developed on those sites, with the agreements setting deadlines in early 2028 and early 2029. Three of the parcels are just west of Monterey Avenue and south of Dinah Shore Drive. The other agreement covers the mobile home park site and calls for 120 affordable housing units for very low-to-moderate-income households, with priority given to families with a military veteran as a head of the household.
Hagerman said one of those agreements provides for the first right of refusal to Juarez, subject to her qualification.
Those new plans, if funded, would mark the city’s first affordable housing development in several years: The most recent affordable housing project to be completed was the San Jacinto Villas, an 82-unit apartment complex for those 55 and up that opened in 2011, according to the city’s Housing Element. (In 2018, the city also extended an affordability covenant through 2060 for the Rancho Mirage Villa Apartments, a 35unit privately owned complex for those 55-plus that was at risk of moving to market rates.)
The city manager also said the city’s planning commission recently advanced a multipronged proposal that includes plans for 94 affordable apartments for land off the northwest corner of Ramon Road and Rattler Road, just south of Rancho Mirage High School. Those plans will go to the council for consideration.
“It is only a matter of time at this point before this becomes a nonissue,” Hagerman said. “The City’s focus will continue to be on advancing affordable housing in our community.”
Tom Coulter covers the cities of Palm Desert, La Quinta, Rancho Mirage and Indian Wells. Reach him at thomas.coulter@desertsun.com.