Ruling Favors Developers in Oceanside : Housing: In a case watched nationally, a judge says the city’s growth control law does not adequately provide for lower-income units.
In a preliminary victory for developers, a Superior Court judge ruled Wednesday that Oceanside’s growth control law fails to guarantee that the city will provide enough lower-income housing.
Judge Herbert B. Hoffman also rejected the city’s defense against the lawsuit, brought by the Building Industry Assn. of San Diego and developer Del Oro Hills, that Proposition A has not affected the region’s supply of housing.
In his 23-page decision on a case being watched statewide, Hoffman said Proposition A “has resulted in an increase in larger-size and higher-priced homes not affordable by low-income families.”
The building association hailed Hoffman’s action, but city representatives called it only a temporary setback pending the outcome of a trial over another aspect of Proposition A scheduled for October.
“I think this ruling goes more than halfway toward invalidating the ordinance” that put Proposition A into law, said Donald Worley, the San Diego attorney for the builders.
But Katherine Stone, the Los Angeles lawyer representing the city, said ‘the court hasn’t in any way ruled that Proposition A is invalid.”
“I don’t see it as a real serious blow at all,” Stone said, adding that the judge’s decision stops short of ordering the city to take any specific action.
The litigation would have ended if Hoffman had upheld Oceanside’s view, but his decision, signed Tuesday and released Wednesday, means the litigants are probably headed for the second trial in October.
Mayor Larry Bagley said the City Council will decide in a closed-door session next week what to do next about Proposition A. “I’m told by our attorney we don’t really have much choice except to keep defending it,” he said.
So far, Oceanside has spent $1.5 million on the legal fight.
Stone said she probably will recommend that the council authorize her to file a motion asking Hoffman to reconsider based on “some factual errors that are significant” in reaching his decision.
Oceanside’s voters approved Proposition A on the April, 1987, city ballot, limiting residential construction to 800 units a year.
The city is allowed by Proposition A to increase or decrease the annual allotment by 10% during any year to correct any imbalance from the previous year.
Soon after Proposition A passed, 10 developers sued. Nine of them eventually dropped their suits, leaving the association and Del Oro Hills to join forces.
Another developer, Cromwell Ranch, is also suing the city, but has agreed to abide by Hoffman’s decision in the association-Del Oro Hills case.
During a 3 1/2-day trial in early June, the city maintained it has had a superior record of approving new housing to help meet Oceanside’s regional share, as determined by the San Diego Assn. of Governments.
City representatives testified that 2,314 units for poverty-level residents and 3,523 for lower- to moderate-income people had been provided since 1986.
They argued that all the approved new units satisfied the city’s burden under state law requiring cities’ growth plans to have no negative impact on the supply of housing in the region.
Hoffman agreed, but only to a point.
He wrote that the evidence “clearly established that the city has met its regional share of new residential housing units for the period from 1966 to ’91.”
The judge also found that the city will continue meeting its total housing goal through 1996, the next housing planning period.
But, in a critical decision, Hoffman sided with the building association and Del Oro Hills that “the city will not be able to meet its future regional share of housing in all income categories.”
Although he agreed the city is exceeding its regional share of affordable units, Hoffman pointed out that many of those building permits were approved years before Proposition A became law.
“Thus, the court concludes the city’s approach is too simplistic and distorts the more important analysis concerning the availability of affordable housing . . . “ he wrote.
Further, “the court agrees with the (association’s) position that, when Proposition A took full effect in 1988, affordable housing in the city took a dramatic decline,” the judge concluded.
Oceanside had pointed out that it has programs, subsidies and exemptions to Proposition A to help increase availability of affordable housing, but Hoffman said the city was unable to convince him that those steps would generate enough housing.
Worley, the association’s attorney, said Hoffman’s findings will serve as a warning to other cities with laws limiting the number of building permits issued annually.
“They’d better think more than twice before they adopt building permit caps,” he said.
But Stone faulted the judge’s decision, saying factual errors led him to a flawed conclusion. Among other things, she said, he “incorrectly felt” the city’s program to encourage affordable housing was no longer in effect.
So she wants to ask Hoffman to reconsider. The city cannot take the matter to the Court of Appeal, unless a special writ is sought, until the second phase of the litigation is completed.
Oceanside can go ahead with the trial in October or take an alternative course, such as changing its growth control law to require all major developments to include affordable housing.
Mayor Bagley said: “I want to know what are our real options. Do we have to continue (to fight)? I think the answer to that is yes.”
The October trial would focus on whether Proposition A is necessary under state law to the health and safety of the city. The issue of punitive damages for Del Oro Hills would come up then.
