HCD Warns La Cañada Flintridge It’s Breaking The Law On Builder’s Remedy

Five weeks after the La Cañada Flintridge City Council doubled down on its denial of a builder’s remedy application — a decision that deepened a yearslong saga in the wealthy city and set up a likely standoff with state authorities — the California Department of Housing and Community Development has issued the city a formal notice that it’s violating California housing laws.

The agency’s stern six-page letter portends possible legal action that could help turn La Cañada Flintridge, where a development team filed a builder’s remedy project in November after a nasty NIMBY battle had stopped development for years, into a major test case for the controversial legal provision.

“The City violated state law by claiming, without any factual or legal justification, that the Builder’s Remedy did not apply to the Project application,” the letter states.

HCD also gave the city a June 22 deadline to respond, and warned of a possible referral to the California Attorney General’s office, the likely next step in the burgeoning standoff between the city and Sacramento authorities.

Just last month, citing arguments from the city attorney and acting against the advice of HCD, the city council declared La Cañada Flintridge had not been eligible for builder’s remedy projects since October, when the city adopted another version of its Housing Element, even though HCD has not yet signed off on the city’s plan. Neither La Cañada Flintridge’s city manager nor a city representative responded to requests for comment, so it is unclear how the city intends to react to the notice from HCD.

One developer interpreted the rare official violation notice as an encouraging display of state muscle.

“If they want to send an example to the rest of the state,” said Alexandra Hack, a principal at Cedar Street Partners who is one of the project developers, “we are the perfect project to do that.”

Cedar Street’s project is a five-story, 80-unit complex located at 600 Foothill Boulevard, along the city’s main commercial road. The unremarkable 1.3-acre site has been the subject of a development fight that dates back nearly a decade, stretching from before the current team was involved, and has included a sophisticated neighborhood opposition campaign, heated community meetings and a dead rat sent in the mail to a previous developer.

The developers turned to builder’s remedy out of frustration, the same fight has taken on new significance for the legally untested provision and a growing challenge to it from housing-averse cities: Under generally accepted state law, only HCD has the authority to determine when cities are in compliance on their Housing Elements — and therefore subject or not subject to penalties that include builder’s remedy — but several cities in both Southern and Northern California have recently claimed that builder’s remedy doesn’t apply because the cities themselves have determined if and when they’ve reached compliance.

La Cañada Flintridge officials relied on the same “self certification” rationale in their recent decision to deny the project, but in its violation letter HCD made clear that it thinks the argument is nonsense.

“The City cannot ‘backdate’ its housing element compliance date to an earlier date so as to avoid approving a “Builder’s Remedy application,” the letter says. “In short, [La Cañada Flintridge’s latest Housing Element] did not substantially comply with State Housing Element law, regardless of any declaration by the City.”

The violation letter came as one builder’s remedy-related suit against the city, from the group Californians for Homeownership, is already working its way through the courts, It seeks a court’s confirmation that La Cañada Flintridge is in fact violating state Housing Element law, with a hearing scheduled for later this month.