Hidden Hills Fight Focuses on Housing : Annexation: The council reverses its stand against annexing land for lower-cost apartments after being sued.

Since its 1961 incorporation, Hidden Hills has enjoyed relative seclusion from its fast-growing neighbors in the San Fernando Valley. But a controversy over lower-cost housing for senior citizens is beginning to focus a spotlight on the gated community of expensive estates.

A developer’s attorneys held a news conference Tuesday outside the gates to publicize the filing of a $10-million lawsuit against the city, pressuring the Hidden Hills City Council to build the project over the objections of a group of residents.

After being served with the lawsuit, the council reversed its position late Monday and tentatively decided to renew its application to annex land on which to build a 46-unit housing complex for lower-income senior citizens.

The housing would be outside the exclusive community’s gates and could not be reached on its network of private streets.

It would be part of a project including a commercial area outside the gates and nine luxury homes within the present community.

The lawsuit, filed by a partnership operated by Tarzana developer Danny Howard, cited the city’s withdrawal last month of its annexation application as evidence that Hidden Hills was reneging on agreements to build the project.

The Los Angeles Superior Court lawsuit seeks $10 million in damages for alleged breach of contract, along with court orders forcing Hidden Hills to proceed with Howard’s project.

“There’s definitely a long history of seclusion here, spanning some 35 to 40 years now,” Howard’s attorney, Benjamin M. Reznik, said. But, he added, “One day, the city of Hidden Hills is going to have to face up to the fact that it has to comply with state law.”

State law requires California cities to make provisions for housing that can be afforded by lower-income groups in their planning and zoning laws.

It also requires that 20% of revenue from redevelopment agencies, such as the one Hidden Hills initiated in 1984 to fund flood-control improvements, be spent on such affordable housing.

Hidden Hills was sued by Los Angeles County over its use of the redevelopment agency. In May, the city settled the suit by agreeing to build the senior citizens’ project in collaboration with Howard. In July, the city and Howard entered a pre-annexation agreement for 25 acres on which the development would be built.

However, public opposition surfaced after the plan became public last summer, and the council delayed the project pending a poll of residents, to take place Jan. 9-11.

The suit accuses the city of backing out of binding contracts. City Atty. Wayne K. Lemieux said he could not comment because he had not yet studied the suit.

Other voices also are encouraging the city to move ahead with the lower-cost housing.

“The provision of affordable housing is so desperately needed in all areas of the state that sometimes individual preferences for neighbors must be overridden to achieve a larger goal,” wrote Ann Harrington, a lobbyist for the Sacramento-based California Coalition for Rural Housing, in a Nov. 30 letter to Hidden Hills.

Joel R. Reynolds, an attorney for the Western Center for Law and Poverty, said the center is watching the controversy and opposes plans to put the senior citizens’ housing outside the town’s gates.

“What we’re concerned about is the notion that any city can create in effect a ghetto for affordable housing,” Reynolds said.

He added that Hidden Hills is receiving “probably not welcome public attention, but affordable housing is something that should be viewed as desirable by communities, because it injects an element of diversity and it can be done very well.”