Santa Monica Exploring Legal Battle Against Builder’s Remedy

In the wake of last month’s bombshell revelation that developers had filed a slew of so-called builder’s remedy applications that could reshape Santa Monica, city officials have signaled that they are readying themselves for a potentially costly legal fight.

“We did engage outside counsel,” Doug Sloan, the Santa Monica city attorney, said during a council meeting last week. “It’s important to realize that, when looking at this builder’s remedy issue and the Housing Element law, that the rules were not always very clear, and it was somewhat of a moving target from the state.”

“I don’t think over the last 18 months the council or staff could have done anything differently to avoid being where we are,” the city attorney added.

Sloan was speaking partly in response to an agenda item three council members added to last week’s meeting, which was the first since the October 11 meeting that had exposed the city’s 16 pending builder’s remedy applications to the public and thrust a previously obscure California law into a broader spotlight.

The agenda item, from council members Phil Brock, Christine Parra and Oscar de la Torre, cited ‘residents’ concerns’ about the permits and urged the council to “hire appropriate outside legal counsel” to explore the city’s options in contesting the controversial projects.

Brock, who has emerged as one of the council’s most vocal opponents of the builder’s remedy applications, did not respond to an interview request. He has, however, branded one 15-story project “beyond the pale” and “an unacceptable bar for the rest of the city.”

Sloan also did not respond, and it was unclear which law firm he was referencing in his remarks and whether the city had already in fact contracted it.

But the city attorney did hint at a potential legal strategy: a plan to contest a majority of the builder’s remedy projects based on a timing technicality.

The fine print

In cities that are out of compliance with their state-mandated housing plans, the somewhat obscure builder’s remedy provision presents a fast track for zoning approvals by removing the city’s authority to approve or deny plans. (The Santa Monica applications set off a firestorm largely because they were mostly high-density projects, equating to nearly 5,000 total units, that otherwise could have been stalled in Santa Monica zoning deliberations for years.)

The developer-friendly loophole closes once a city comes back into compliance. In Santa Monica’s case, it failed to pass an approved housing plan last October, making it officially out of compliance from February until October 14, when the relevant state agency certified the city’s new Housing Element.

But instead of the October 14 cutoff, Sloan argued at last week’s council meeting that the relevant date should be much earlier, at the beginning September, when the state sent a letter notifying Santa Monica that its draft version of the new Housing Element was “substantially in compliance” and would be accepted if the city formally adopted it. At the October 11 meeting Santa Monica City Council did, leading to the critical Housing and Community Development certification a few days later — but by then WSC Communities, the development firm led by Neal Shekhter, had already filed its string of soon-to-be-controversial builder’s remedy applications.

“We will be making a good argument that… that was really the cutoff,” Sloan said of the early September letter. “And so, some of these builder’s remedy applications we received after that we may not have to treat that way.”

What’s next

It’s a legal argument that may not carry much weight. Still, builder’s remedy projects in California are yet to be fully tested by the courts. The state law is generally understood to mean that HCD compliance comes only with the final certification of a city’s adopted, rather than draft, Housing Element, and Santa Monica’s document did undergo changes between early September, when the state sent its encouraging letter, and mid-October, when it passed its final version.

Dave Rand, an attorney representing WSC Communities, declined to comment on Santa Monica’s potential timing argument, although in a recent interview he said that he was expecting resistance from the city.

“My hope is that the city is going to be selective — like they’re going to find certain projects unappealing and certain projects ok,” Rand said. “But you have council members who are about slow growth. And they’re putting a lot of pressure on their staff to push back on these projects, and so this is not going to be a cakewalk at all. It’s going to be a fight.”

The brewing legal fight comes after a frenetic couple of weeks that have abruptly cast a glaring media and cultural spotlight on builder’s remedy, a provision that was included in a 1990 California housing law but, for various reasons, it wasn’t leveraged by developers until this year.

With more than 100 Southern California cities recently out of compliance, including high-profile jurisdictions such as Beverly Hills and West Hollywood, questions are also swirling about additional projects and their potential impact.

So far, Santa Monica, an affluent city with “beach town” roots that’s already seen its share of density battles, has emerged as the epicenter of the fight, as residents — some directed by organized neighborhood groups — have begun rallying hard on both sides of the builder’s remedy projects.

“I write to urge you to embrace Builder’s Remedy projects,” one supporter wrote to the council ahead of last week’s meeting. “Santa Monica needs more homes and affordable homes, not wasteful litigation!”

It was the project opponents, however, who seemed to have greater numbers, with some blasting the apartment projects with terms like “dystopian fever dream” and plenty of others expressing “shock” that the applications could have been filed at all.

One opponent added bleakly, referring to the city manager and city attorney, “I am losing confidence in you, Mr. White and Mr. Sloan.”