Judge Turns Down City Housing Plan : Ruling: Officials wanted to build 94 low-income units in Diamond Bar to save remaining vacant acreage for industrial use.

A unique plan by the City of Industry to build low-income housing outside its boundaries has been rejected by a Los Angeles Superior Court judge.

The ruling by Judge Robert O’Brien, to be formalized later in court, was received this week by attorneys for the Industry Civic Planning Assn., a group of Industry business owners who sued the city over its attempt to place 94 housing units in Diamond Bar.

The plan was conceived to meet state requirements for housing and preserve Industry’s remaining 12% vacant acreage for industrial development.

City Atty. Graham Ritchie said the decision will be appealed, a process that could take up to 1 1/2 years to resolve. But even if the appeals court upholds O’Brien, the city will remain opposed to building new housing within its boundaries, he said.

“If we’re compelled to make a provision for housing within the boundaries of the city, we’ll make provision for 94 additional housing units,” Ritchie said. “But we’re under no obligation to build them.”

Under state law, cities are required only to plan for housing, not to build it.

Jonathan Lehrer-Graiwer, an attorney for the association, called the ruling another round in a continuing fight over the city’s reluctance to placing housing within its boundaries.

The decision also could affect the outcome of a special housing bill to be considered this summer in the Legislature. The measure, authored by state Sen. Frank Hill (R-Whittier) was devised to get state permission to allow the City of Industry to transfer the 94 housing units to adjacent Diamond Bar.

But after housing advocates objected, the bill was changed. It now would permit the city to take $6 million annually, the amount required by the state for housing within its boundaries, and transfer that sum to the state Department of Housing and Development. The money would then be spent on housing in other cities in the San Gabriel Valley.

Lobbyists could use the Superior Court decision to argue against Hill’s bill, Lehrer-Graiwer said. But the ruling itself could be negated if the Legislature passes the bill, he added. Passage would probably spark yet another round of legal challenges, he said.

The current lawsuit is the second of three filed by the association. The first, filed in 1988, ended in an association victory last year when a state Court of Appeal ruled that the city could not claim 600 grassy, hillside acres as blighted in order to use redevelopment funds to build an industrial complex.

A third suit was filed in February this year to force the city to comply with state laws requiring that 20% of tax funds collected from redevelopment projects be slated for low- and moderate-income housing. That suit is pending.

Industry’s opposition to housing stems from its founding. The 35-year-old city, a sprawling crescent-shaped municipality, was created to foster business and manufacturing along the curve of the Santa Fe railroad tracks and the Pomona Freeway (60). The city has only 67 housing units and 631 residents, including more than 200 who live in a sanitarium.

“If you start building houses next to factories, the factories will close up,” Ritchie said, explaining why the city opposes housing.

But Lehrer-Graiwer said city officials do not want housing because it would allow new voters into its boundaries who might disagree with the direction taken by city officials.

“It’s totally undemocratic,” he said of city management. “That’s the underlying real issue.”