Oceanside Case Affects Growth Limits Over State : Courts: A longstanding lawsuit over Oceanside’s growth-control law is about to be decided. Both sides say it will have a profound effect on every city’s power to manage growth.

With considerable suspense, developers and the city of Oceanside are awaiting a Superior Court ruling that could spell either the triumph or the doom of the city’s controversial slow-growth law.

In a case watched throughout the state, the Building Industry Assn. of San Diego and Robinhood Homes are challenging the legality of Proposition A, which limits the city’s residential development to 800 units a year.

So far, the city has spent $1.5 million defending Proposition A, which voters overwhelmingly passed in April, 1987, to help curb the rapid growth that has made Oceanside, with about 130,000 residents, the third-largest city in San Diego County, after San Diego and Chula Vista.

At one point, the litigation reached the California Supreme Court, but was returned to Superior Court in Vista, where, after several days of testimony earlier this month, the lawsuit has finally gone to Judge Herbert B. Hoffman.

He had been expected to issue his ruling Friday, but has postponed a decision to July 10.

If nothing else, both sides agree on one thing: The outcome could have a profound effect on any city that tries to manage its growth by passing ordinances.

Katherine Stone, an attorney representing the city, said that, if the judge upholds the developers, “it could make it almost impossible (for cities) to defend these ordinances.”

That’s just how the the building association and Robinhood Homes wants it.

Association attorney Donald Worley said a ruling for the developers would have “a chilling effect on building caps” adopted by cities.

Although any decision is likely to be appealed, Hoffman’s decision still would be a watershed event in a long legal battle.

When Proposition A became law, it limited residential building to 800 units a year and a set cumulative total of 10,600 new dwellings through 1999.

However, the ordinance has exemptions allowing new homes on 10,000-square-foot lots and for development of housing projects for low-income people and senior citizens.

Initially, more than a dozen developers sued the city, but the field of litigants has been narrowed to the building association and Robinhood Homes, the chief developer of Del Oro Hills in Oceanside, east of Interstate 5.

A second developer, Cromwell Ranch, is suing the city but has consented to abide by Hoffman’s decision in the case involving the association and Robinhood Homes. Although Robinhood Homes at first sought $12.8 million in damages, claiming the city had stymied its development plans, it since has gotten permits to build its 1,200 units.

Still, if the city loses the case, it would be open to pay unspecified damages to Robinhood. Representatives of Robinhood Homes declined to comment on the case pending a ruling.

But, money aside, the case focuses on what authority cities have to govern their own growth.

The developers argue that Oceanside is violating the Constitution by illegally using its police powers to limit issuance of building permits. Further, the plaintiffs say the city is breaking state law by failing to provide its regional share of lower-cost housing.

“We feel Oceanside is one of the last affordable housing markets,” said Worley, accusing the city under Proposition A of “driving affordable housing out of Oceanside.”

During three days of testimony this month, city officials sought to prove that Oceanside has had an excellent record of supporting housing for all income levels in the years since Proposition A went into effect.

At one point, Stone showed the judge a chart demonstrating that, since 1986, the city has granted permits to build 2,314 units for poverty-level residents and an additional 3,523 units for lower-to-moderate income people.

The association countered with figures showing that families earning $45,480 a year cannot afford new homes in the city.

City Councilwoman Melba Bishop, who helped write the growth-control initiative, is indignant that developers say the city has shirked its responsibility to help provide affordable housing.

“I’m enraged the development community would try to paint the slow-growth ordinance as a plot to keep low-income people out of Oceanside,” Bishop said.

Although the developers maintain that the city is obliged under state law to meet its regional share of affordable housing, Stone said there is a state goal--not a requirement--to provide housing for all economic groups.

Stone regards the lawsuit primarily as a challenge to the constitutionality of a city’s “basic police powers.”

“It’s a test case, that’s why the building industry is involved,” she said.

Oceanside scored an initial victory for Proposition A in June 1989 when the 4th District Court of Appeal, acting at the behest of the state Supreme Court, ruled that invalidating the ordinance wasn’t the proper way of solving the conflicts over it.

Even after Hoffman makes his decisions, the parties will return to court in October to begin testimony on another question in the case. That’s whether, as the plaintiffs claim, Proposition A is necessary, under state law, to the health and safety of the city.

“If I lose this round, I’ve got another chance to invalidate the ordinance,” said Worley.

But Stone said the crucial issue is before the judge now, and that another trial isn’t nearly as important to the city’s defense.