Age Limit Could Mean New Hassles for New City

By JEAN O. PASCO

March 24, 1999 12 AM PT

TIMES STAFF WRITER

Laguna Woods officially becomes Orange County’s 32nd city today and faces an uncertain future as the only city in the nation where residents face age restrictions.

People younger than 55 are prohibited from living there unless they are married to someone 55 or older.

All of the city’s housing units are inside the gated enclave of Leisure World, a retirement community that enforces the age limit through deed restrictions and private corporate rules.

State and federal laws allow age-restricted communities, like Leisure World when it was an unincorporated part of the county. But no such community has ever taken the next step to become its own city.

And that’s where Laguna Woods, home to 18,000 residents, may have trouble down the road. The age limit that was legal before remains legal for now. But no one is sure that the city, if challenged, could remain an exclusive haven for senior citizens.

“I guess you could say this is uncharted territory,” said Julie Biggs, a Riverside attorney hired as interim counsel for Laguna Woods. “That’s what makes it so exciting.”

Avoiding state and federal grants that carry demands to open up the city’s housing may be possible, but that’s only one concern for the city.

“Any time you do something for the first time, there are bound to be some problems,” said Betsy Martin of Costa Mesa, city attorney for Canyon Lake in Riverside County. Canyon Lake is one of four other gated cities in California, but none of them is age-restricted.

“They’re going to face problems they never anticipated,” Martin said. “We have problems with Canyon Lake, and it’s been a city for nine years.”

Along with cityhood, for example, come requirements to comply with certain state mandates. A key mandate is to file a so-called housing element, which details how the city intends to provide housing for all types of residents, including lower-income families, as part of its General Plan.

State and federal officials said it’s too early to tell what will happen when Laguna Woods submits a housing plan that doesn’t fulfill the same obligations that other cities must satisfy.

“Frankly, I don’t know how we’ll deal with it,” said Richard Freedman, an attorney for the state Department of Housing and Community Development, which approves housing elements.

The Southern California Assn. of Governments, which oversees regional planning and programs for the federal government, is equally stumped.

“It’s a unique situation, and everybody is going to be watching to see how it sorts out,” said Joe Carreras, SCAG’s manager of comprehensive planning.

Cityhood leaders who will be installed today as Laguna Woods council members figure they have the situation under control.

They insist that the exclusive nature of Leisure World’s housing restrictions, contained in the bylaws of three corporations that own most of the complex and in deeds covering the remaining homes, is beyond the city’s control. The city itself won’t discriminate on the basis of age or anything else, Councilman Bert Hack said.

“If we ever had additional units, they would not be restricted,” he said. But he pointed out that there is no undeveloped land within the city.

Nevertheless, no one is certain what would happen if the age restriction is challenged.

The situation amounts to de facto segregation, said David Levy, housing specialist with the Orange County Fair Housing Council. But state housing law “is pretty toothless” and only binds a city to doing what is within its control.

He said Leisure World already existed with its restrictions, so becoming a city shouldn’t change that.

“What’s more troubling is that, if this is successful, more places could develop from the outset to be like this,” Levy said. “That’s something we would challenge. You can’t set out to intentionally set up a city that excludes groups.”

Housing laws ban discrimination based on race, religion, sex and national origin--so-called protected classes. Age, however, is not a protected class.

So state and federal laws carved out senior-only communities, Levy said, to recognize that senior citizens should be able to live the remaining years of their lives in more peaceful surroundings. But retirement communities were envisioned within larger cities or areas where local leaders could fulfill their responsibility to provide other housing options.

Still, attorneys with the Local Agency Formation Commission, which processes cityhood requests, found no laws or rulings forbidding creation of a gated city where all housing units are age-restricted.

Dana Smith, LAFCO’s executive director, said that it was “beyond our role” to put a stamp of legal approval on the new city. “That’s something [Laguna Woods] is going to have to deal with,” she said.

The commission and city organizers at one point considered adding a 10-acre parcel of undeveloped land outside Leisure World’s gates to use for future homes, Smith said. The parcel was removed after the landowner objected to being included in the new city.

There are other quandaries facing the new city, which also covers two small shopping centers outside Leisure World’s gates.

Each city in California, for example, gets a portion of state sales taxes paid within that city to cover the costs of street maintenance. Gasoline-tax money is sent to cities for the same purpose.

But revenue from those taxes cannot be used on private streets, and all of the streets within the gates of Leisure World are private.

A tentative plan calls for some of the street and road money to be spent on a perimeter sound wall enclosing most of the new city--and further isolating it.

“Next, it’ll be the alligators and the moat,” lamented longtime affordable housing activist Tim Carpenter of Fullerton.

LAFCO also set up a series of restrictions on how the city can spend the tax and fee money it will receive--a total of more than $3 million in the first year.

Specifically, the city cannot spend any public money on private areas within the gates. And if anything is built with public funds, like a new senior center, it must be open to the public.

The city can spend money on such things as increased police protection inside and outside the gates, legal actions affecting the new city, enhanced bus service and lobbying costs for city-related issues.

Like other gated cities, Laguna Woods must hold City Council and other public meetings outside the gates, or allow the public inside for the meetings. It already has designated space for a new City Hall in the Willowtree Shopping Center.

The city intends to continue with its contracts for police and fire protection with the county.

County Assessor Webster J. Guillory said he will continue to assess the value of the homes regardless of the new city status.

“This is the most unique property situation that’s ever occurred in the country, [but] I’m going to continue to value their property like I always do,” Guillory said. “I don’t think the law really contemplated a situation like this.”

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Year One In Laguna Woods

A financial review last June predicted Laguna Woods will end its first year with a $874,990 surplus. Seventy percent of revenue will come from motor-vehicle license fees, sent from the state, plus state road fund money to maintain the city’s few public roads. Expected expenses and revenues for the new city, which Wednesday becomes the county’s 32nd municipality:

Expenses

Law enforcement: $806,010

Road maintenance: $425,205

Government salaries: $415,773

Payments to county: $405,045

Land-use planning: $165,000

Contingency funds: $162,505

Miscellaneous costs: $508,266

TOTAL: $2,887,804

****

Revenues

Motor vehicle license: $1,792,812