Court rules housing development may proceed

Possible implications for other projects proposed under SB35

In a victory for pro-development activists that may affect housing built throughout the state, a Superior Court judge has ruled that a stalled residential and office development in Los Altos must be allowed to go forward.

The decision stems from a lawsuit filed in July by the YIMBY-backed California Renters Legal Advocacy & Education Fund, otherwise known as CaRLA. The group sued the city of Los Altos after officials there rejected a developer’s bid to expedite a project of 15 apartments — including two low-income units — plus ground-floor office space on Main Street. The developer proposed the project under Senate Bill 35, which went into effect in 2018 and forces cities to approve certain residential and mixed-use projects quickly.

On Monday, Santa Clara

County Superior Court Judge Helen Williams ruled the city had no grounds for rejecting the application and ordered Los Altos officials to approve the project.

It’s a groundbreaking ruling that may affect other projects proposed under that law, said Ryan Patterson of the San Francisco-based law firm Zacks Freedman & Patterson, which represented CaRLA. Though Monday’s trial court ruling doesn’t set legally binding precedent, advocates say it likely will serve as an example other judges, developers and city officials will look to.

“It means that there will probably be more affordable housing proposed, or projects including more affordable housing, and they’ll be approved,” Patterson said, adding, “It’s a cautionary tale for any city that might consider denying a project on technicalities.”

A spokeswoman for the city of Los Altos responded to the ruling in an emailed statement.

“Of course, the City is very disappointed with the Judge’s decision,” Sonia Lee wrote, “but we will not comment further until after the City Council has the opportunity to discuss the decision.”

In August, Councilwoman Lynette Lee Eng, who was mayor at the time, wrote in a statement, “This project would result in a five-story building surrounded by two-story buildings, which goes against our General Plan and is completely out of character with our downtown aesthetic.”

Under SB35, officials are allowed to deny projects that don’t comply with their cities’ objective planning standards — but they must provide clear, written reasons why. In the Los Altos case, the city’s denial letter was not sufficient, Williams ruled.

The city initially claimed the project did not qualify because it didn’t have enough affordable housing — a claim it later withdrew, admitting it had relied on outdated information. Then the city claimed the project didn’t have enough parking. And the parking the project did include wasn’t properly accessible, the city argued. But the court found those claims to be vague and unsupported.

The ruling marks a major win for property owners Ted and Jerry Sorensen, as well as YIMBY activists. The court did not mince words in determining the city was out of line in its denial. The judge blasted city officials for using a series of sketchy tactics to thwart the project, including demanding an appeal from the developer with less than a day’s notice.

“The Court further finds that the City acted in bad faith as defined in the HAA (Housing Accountability Act) because its denial was entirely without merit,” Williams wrote. “The City’s denial letter and the record before the Court do not reflect that the City made a benign error in the course of attempting, in good faith, to follow the law.”

It’s rare for a judge in a case like this to rule a city acted in bad faith, Patterson said. Typically, a judge who sides with the developer will rule the city must reconsider the project application. A finding of bad faith allows the judge to force the city to grant the application and to impose hefty fines if the city doesn’t comply.

For cities and developers still

figuring out how to interpret the relatively new SB35, Williams’ ruling offers new guidance on how the law can be used in conjunction with other state housing laws and how it can be enforced by the courts, Patterson said.

Other projects affected by Monday’s ruling could include the massive housing, office and retail development that’s currently under construction on the site of the old Vallco Shopping Mall in Cupertino. The developer, Sand Hill Property Company, proposed the project — which would include 2,402 apartments — under SB35 and got the OK from city officials.

But slow-growth group Friends of Better Cupertino sued the city, claiming officials erred when approving the project.

Sand Hill already has started demolishing the old mall to make way for its new project, but that work could stop if Friends of Better Cupertino prevails. The two sides faced off in court in December in front of Williams — the same judge who just ruled in the Los Altos case.

Last month, Williams issued a notice that her ruling in the Vallco case will be delayed because of the COVID-19 pandemic, which suspended nonessential court operations.

“The Court has every hope to issue its orders in this case … as soon as it is reasonably possible to do so,” she wrote.