Los Gatos adopts failsafe housing plan to avoid “builder’s remedy”

The town of Los Gatos has approved a state-mandated plan to build 2,000 homes by 2030 to avoid a “builder’s remedy” of unregulated residential development.

The Town Council voted to adopt its so-called housing element by the Jan. 31 deadline after getting feedback from the state, the San Jose Mercury News reported. 

The move by the town of 34,000 residents southeast of San Jose was meant to cover its bases as it awaits final feedback from the state on Jan. 12, days before the final deadline.

If Los Gatos didn’t have a housing element plan in place by the end of next month, it would be vulnerable to penalties, loss of state funds and to “builder’s remedy” projects, which would allow developers to break ground without local oversight or public hearings.

The “builder’s remedy” provision comes from a 1990 state law that aimed to spur housing development. It works by penalizing cities that fail to meet their state-directed housing goals. Cities deemed non-compliant lose the authority to approve or deny projects with affordable housing components – which are automatically approved, as reported by The Real Deal.

“Not having any housing element adopted by the 31st puts us at risk for the builder’s remedy,” Mayor Maria Ristow said. “We’re in a whole different landscape right now, and I think our public has expressed concern over that.”

California cities must create a housing element to address the state’s housing crisis by targeting areas for growth and incentives for developers. Los Gatos must find room for 1,993 homes, priced as affordable, market rate and above market rates.

The town received unofficial feedback from the state Department of Housing and Community Development on Dec. 13, with concerns about the status of a General Plan referendum, site inventory and projections for SB 9 duplex projects.

While town staff updated its housing element draft to account for these potential changes, there’s a chance the official state feedback could include further changes beyond what’s anticipated.

If the changes are significantly different from the adopted document, developers could still challenge the town and implement “builder’s remedy” developments, Los Gatos Attorney Gabrielle Whelan told the Mercury news.

Los Gatos would have to demonstrate it is in “substantial compliance with state law,” meaning “not every single minute detail has been captured, but it substantially complies,” Whelan said.

The City Council unanimously approved adopting the draft as a failsafe, saying the risk of builder’s remedy developments was greater than the risk of editing the plan in the future.

“Certainly, if we don’t adopt anything by the 31st, we will not be compliant. That’s a given, that’s 100 percent,” Ristow said. “Pushing through and getting this done actually can be a reasonable answer. If it’s not, it’s better than not having cast anything.”

Other Bay Area cities, such as San Jose, have said their housing elements may not be approved in time — and could be at risk for the builder’s remedy.

Alameda and Emeryville have had their plans approved, and Oakland officials are confident of meeting the state deadline.

— Dana Bartholomew

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