4th District publishes 2018 ruling on affordable housing development

Acting on a request from organizations for developers, the 4th District Court of Appeal has published a ruling from 2018 that found a state law aimed at forcing cities to allow the construction of more affordable housing trumps local control.

The case involved approval for the development of the 6th & Olive Project, a 20-story mixed-use building with 204 dwelling units in the Bankers Hill neighborhood near downtown San Diego.

The court found that "the Project is consistent with the applicable policies found in the General Plan, Uptown Community Plan, and Land Development Code. Moreover, even if the Project is inconsistent with the standards set forth in those plans, the City was nevertheless compelled to approve the Project under the Density Bonus Law 34", justices wrote in their ruling. Bankers Hill 150 et al. v. City of San Diego et al., 2022 DJDAR 1297 (Cal. App. 4th Dist., Feb. 2, 2022).

Despite having won the case, the city of San Diego requested the opinion not be published, which meant it could be cited in similar legal cases. Developers wanted it published so they could use it in other legal challenges, specifically a project the city of Encinitas is trying to block.

On Thursday, the 4th District acted on a request by the Building Industry Association and Greystar GP II LLC. Judith L. Haller, acting presiding justice of the court, said she found the opinion met the standards for publication specified in California Rules of Court, rule 8.1105(c).

"The Bankers Hill decision provides supplemental guidance to local agencies reviewing Density Bonus Law projects. Prior to this, the Wollmer decision referenced in the opinion was the only substantive holding available to public agencies and developers," explained Heather S. Riley, a partner at Allen Matkins Leck Gamble Mallory & Natsis LLP, who represented Greystar. Wollmer v. City of Berkeley, A122242 (Cal. App. 1st Dist., Oct. 30, 2009).

"Future project applicants can now rely on both Wollmer and Bankers Hill to help process affordable housing developments, particularly when and if agency staff push back on the applicant. Fortunately, that does not happen too often, but sometimes our clients encounter agencies who are reticent to approve projects with affordable components. We wanted to get this case published to help in those instances," she explained.

"The 6th and Olive project complied with the City's General Plan, Uptown Community Plan and San Diego Municipal Code with the incentives permitted by the Density Bonus Law. Period. Opponents disagreed and were upset that the project did not include a setback along Olive Street. Our argument was that the setback was not required because the project included dedicated affordable dwelling units. The Planning Commission, City Council, trial court and Court of Appeal agreed," Riley concluded.

Encinitas opposed the publication of the ruling in a Jan. 31 letter to Haller and Associate Justices Terry B. O'Rourke and Patricia Guerrero.

"Encinitas has approved at least 37 density bonus projects containing over 1100 units," wrote Dolores B. Dalton of Goldfarb & Lipman LLP, which represents the city. "The issues arising under the Density Bonus Law are numerous, complicated, and highly technical, including the issue presented by this case: whether and under what circumstances density bonus waivers, or modifications of development standards, may be granted."

She had urged the Court of Appeal to wait for briefs from other groups before acting on the request to publish.

"The Courts will greatly benefit from extensive briefing from counsel for the parties, as well as amicus briefs from entities such as the League of California Cities and the Building Industry Association. As mentioned by Respondent the City of San Diego in its opposition to the Bankers Hill publication requests, that thorough briefing and analysis simply did not occur in this case," Dalton wrote.