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Building Industry files lawsuit against Encinitas for recent density-bonus actions

By Aaron Burgin, October 14, 2014

ENCINITAS — The Building Industry Association of San Diego has filed a lawsuit to invalidate the Encinitas City Council’s recent action to close several loopholes that have been popular among developers of so-called “density-bonus” projects.

An email obtained by The Coast News indicates that City Attorney Glenn Sabine informed the Council of the lawsuit Monday afternoon, and advised them not to comment about it until they could discuss the matter in closed session.

“I have attached the lawsuit for your information. We are currently evaluating the merits of the lawsuit and anticipate bringing it to the Council in Closed Session as soon as possible,” Sabine wrote. “In the meantime, please refrain from commenting on the subject matter of the lawsuit pending the Closed Session.”

The BIA’s lawsuit argues that the Council’s actions, which they say were politically pressured, either violate state law or make it infeasible for developers to build the projects.

“The Encinitas City Council, bowing to the pressure of certain residents fundamentally opposed to the application of the Density Bonus Law in their neighborhoods, has intentionally and knowingly instructed City Staff to “interpret” the Density Bonus Law in a manner contrary both to the letter and spirit of the law, and contrary to its longstanding interpretations thereof,” the lawsuit states. “The City Council seeks to render the Density Bonus Law ineffective and unusable in the City…”

The Council on July 16 voted on a series of motions that memorialized its intent to stop the practices that they said have led to the proliferation of the oversized, super-dense residential developments citywide. Currently, eight of the 10 projects in the city’s planning queue are density-bonus projects.

The votes on the changes were nearly unanimous.

State law allows for developers to build extra homes on land to offset the cost of building homes within the development reserved for affordable housing, but residents said the city has taken too liberal of an interpretation of the law, which has allowed developers to build far too many homes than the law intended.

The changes included:

  • Rounding down the number of units proposed on a site of the number of allowable units is a fraction
  • Building affordable units within the projects to be at least 75 percent of the size of their market-rate counterparts, or 1,500 square feet, whichever is greater
  • Requiring developers to provide evidence to demonstrate the need — financial, physical or otherwise — for a waiver of development standards
  • Starting the process of adopting a change to the city code that would define “environmental constraints” that developers would not be able to consider as developable space toward its calculation of the project’s density
  • Enacting the changes immediately on projects that were not fully vested. Previously, the Council policy gave developers those rights at the time they applied for a project.

The Council recently deferred action on one of the proposed changes regarding environmental constraints until it can be discussed as part of an overhaul of its density-bonus policies.

The BIA argues in its lawsuit that the city’s actions would further damage the city’s ability to provide state-mandated affordable housing allocations. As part of the lawsuit, it is requesting the court order the city to update its housing element, which has not been updated since 1992.

“We are very concerned about the city and its effort to circumvent state law, which allows for the creation of more affordable housing,” BIA Vice President Matt Adams said.

In regard to the community sentiment that developers have exploited state law to build oversized developments, Adams said the argument has a fatal flaw.

“How can you exploit a state law?” Adams said. “If you build a certain amount of affordable housing, you are granted increased density, you can’t exploit it if you follow the rules. We are simply saying follow the rules, and the city doesn’t want to follow the rules.”

While city officials are remaining silent on the lawsuit, at least one attorney involved with a lawsuit against one of the density-bonus projects said the lawsuit is distracting from the most pressing issue — the city’s need to update its housing element ordinance.

Everett Delano, who represents the group Save Desert Rose in their successful lawsuit against the proposed Olivenhain development, said he believes the Council’s actions in July memorialized discretion they had in their city laws all along.

“The BIA doesn’t like that the Council isn’t inclined to say, ‘Whatever you want we will give you,’ as previous councils did,” Delano said. “They are looking at these things with a harder lens, and the BIA doesn’t like that.

“I think the city needs to revise its ordinance to address the density-bonus law, and I think the city has recognized that need,” Delano said.

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