Judge rules Los Altos violated state housing laws in blocking downtown project

A proposed five-story development in downtown Los Altos must proceed after a Santa Clara County Superior Court judge found the city violated Senate Bill 35 and other state housing laws in denying the project last year.

The April 24 ruling by Judge Helen Williams states that Los Altos must allow the 15-unit development to proceed at the requested density, and that the city acted in bad faith by blocking the project without merit and in a way that goes beyond making a “benign error.”

The verdict is being hailed by housing advocates as a hard-fought victory that sets important precedent for the by-right housing law, which gives residential projects streamlined approval if they meet objective zoning standards. The ruling should signal to cities that they can no longer block housing projects they don’t like by twisting and reinterpreting state and local laws, said Victoria Fierce of the California Renters Legal Advocacy and Education Fund (CaRLA).

“Here, Los Altos lied and put up barriers to approval at every step, never expecting a court would hold them accountable,” Fierce said. “This decision established exactly the accountability we should expect from cities.”

When asked for comment, city officials said they were disappointed by the ruling but declined to discuss whether they planned to appeal.

“Of course, the city is very disappointed with the judge’s decision, but we will not comment further until after the city council has the opportunity to discuss the decision,” said city spokeswoman Sonia Lee.

The project proposal at 40 Main St. has a storied and controversial history, put forward by property owners Ted and Jerry Sorensen in multiple iterations going back several years. The latest iteration sought to use streamlined approval under SB 35 to construct a 66-foot-tall mixed-use building with offices on the first floor and 15 units above it. Two of those units will be below-market-rate units.

The project would be taller than the rest of downtown Los Altos structures and the standard zoning heights for the area because it double-dips into both state and local density bonuses. At a hearing on the project in April last year, many city residents bristled at the idea of putting a dense building in the quaint downtown area, going so far as to call it an “atrocity.”

In blocking the project, city staff argued that the proposal lacked “sufficient parking,” and didn’t have enough access to off-street parking, and claimed that the project didn’t have enough affordable housing units to comply with SB 35.

“It is not apparent from this vague statement just what those purported standards are and where they can be located,” according to the ruling. “Notwithstanding the opacity and ambiguity of the City’s statement, it is apparent that it was not relying on permissible, objective standards for parking.”

As to whether the project can tap into density bonuses and still meet objective zoning standards, the court disagreed with the city.

“The city’s interpretation of the Density Bonus Law is incorrect,” the ruling states. “Courts have routinely rejected such an interpretation of the law. The 35% bonus authorized under the (California) Density Bonus Law and the city’s own ordinance is the mandatory minimum a city must provide; it is not cap.”

Where the city’s actions amounted to bad faith is in the way city staff handled the project application, the appeal process and ultimate denial of the project. From the get-go, planning staff muddied the waters by appearing to treat the project as two distinct applications: One using SB 35’s streamlined process and another standard, discretionary development application. The city attempted to discard the latter because it was incomplete.

In the months that followed, the court found that the city failed to follow the law by “timely explaining to the developer just how its project conflicted with objective standards.” The city also presented a list of additional reasons why the project didn’t comply after the deadline — reasons that, the court found, were erroneous anyway.

“In addition to tactics such as demanding an administrative appeal on less than one day’s notice and using strained constructions and textual interpretations to assert that developer had presented two applications that had to be withdrawn, the city denied the streamlining application with a facially deficient letter and later adopted a resolution enumerating insufficient reasons for the denial,” according to the ruling.

CaRLA and attorneys representing the Sorensens independently filed lawsuits against the city after the project was denied, which were joined in a single civil suit that Williams ruled on last week. Dan Golub, who represents the Sorensens and argued the legal merits of the project to the city, called the ruling a victory for SB 35.

“It is gratifying the court agreed with our legal arguments, and we are proud to have achieved this important victory enforcing some of the state’s cutting-edge housing laws,” Golub said.