Beverly Hills illegally rejected plan to build 165 new homes, C.A.R.-backed group says in second lawsuit against the city

LOS ANGELES, July 1, 2024 /PRNewswire/ -- Californians for Homeownership, a nonprofit organization sponsored by the CALIFORNIA ASSOCIATION OF REALTORS^® (C.A.R.) that aims to address California's housing crisis through impact litigation, today announced that it has filed a lawsuit against the city of Beverly Hills over its denial of an application to build a 165-unit mixed-use development in the city's urban core. The lawsuit is the group's second filed against Beverly Hills, after a Los Angeles County Superior Court judge ruled in its favor in another housing lawsuit late last year.

This is the organization's first lawsuit filed under the so-called "builder's remedy"— a provision of state law that requires the approval of mixed-income projects in cities that have violated state housing element law, such as Beverly Hills. Filed immediately after the city's June 27 city council meeting, the new lawsuit seeks a court order approving the project.

"Californians for Homeownership continues to lead the way in enforcing state housing laws in the courts," said C.A.R. President Melanie Barker. "It is critical that cities like Beverly Hills do their part in addressing the state's housing crisis, and this new case will help ensure that they do." 

In the organization's prior lawsuit against Beverly Hills, the court ruled that the City had based its state-mandated housing plans on the development of sites that were unlikely to be redeveloped in the near future, including established medical clinics and modern, well-leased office buildings. The court also faulted the city for overestimating the number of units likely to be constructed on those sites.

"We won our last case against Beverly Hills because the city's housing plans were unreasonable and unlikely to produce affordable housing," said Matthew Gelfand, the in-house litigator for the nonprofit. "Now, a developer has come forward with a real plan to build housing, including income-restricted affordable units, and the City said, 'no.' We had no choice but to return to court to address the city's continued resistance to housing development."

The project rejected by Beverly Hills is a mixed-use development proposed for a vacant lot on Linden Drive, just south of the city's Golden Triangle area and surrounded by office buildings, retail centers, and high rises. Of the 165 residential units, 33 would be reserved for lower-income households. The project is one of several "builder's remedy" proposals in Beverly Hills, most of which seek to develop vacant or nearly vacant lots in existing high-density commercial corridors.

As state law has increasingly made it illegal for local agencies to reject housing development projects, cities have turned to alternative approaches to prevent the construction of new housing. In this case, Beverly Hills refused to acknowledge the completeness of the developer's application, ensuring that the city would never be forced to make a formal decision on the project. These pretextual "incompleteness determinations" are an increasingly common tool used by cities to disguise housing rejections and attempt to insulate their decisions against legal challenge. In March, a judge rejected a similar attempt by the City of La Cañada Flintridge, holding that the city's incompleteness determination was legally equivalent to denying the project. And the state Department of Housing and Community Development specifically warned Beverly Hills that it would be a violation of state law to issue an incompleteness determination for the Linden Drive project.

The new lawsuit was brought under California's Housing Accountability Act, which contains the "builder's remedy" law. Under the Act, organizations like Californians for Homeownership are entitled to sue in their own name to challenge housing denials, under a special organizational standing provision. The city will bear the burden of proof in the case and will be required to prepare the record for the case on an expedited basis, at its own expense. If the court determines that Beverly Hills acted in bad faith, the court can order the project approved with no further hearing by the city.

The case is Californians for Homeownership v. City of Beverly Hills, Los Angeles County Superior Court Case No. 24STCP02082. Case documents are available on request.

Californians for Homeownership is a 501(c)(3) nonprofit organization sponsored by the CALIFORNIA ASSOCIATION OF REALTORS^® devoted to using legal tools to address California's housing crisis. For too long, California's cities have treated compliance with state and federal housing law as optional. The organization seeks to change that attitude by proactively enforcing the law, on behalf of the important public interest in having additional housing available to families at all income levels. Californians for Homeownership was established by the CALIFORNIA ASSOCIATION OF REALTORS^® (C.A.R.), and it receives financial support from C.A.R. and private donors. To make a tax-deductible charitable contribution today, visit caforhomes.org.

SOURCE CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)