Encinitas sued over changes to ‘density bonus’ housing law

In response to public outcry, the Encinitas City Council altered several policies over the summer in hopes of shrinking the footprint of “density bonus” housing projects. Legal action, however, seeks to negate those changes.

The Building Industry Association of San Diego filed a lawsuit Oct. 10 accusing the city of violating the state density bonus law. The suit contends that the new city rules have unnecessarily hindered affordable housing developers.

“This is an industrywide issue, so we took it upon ourselves to come forward with the litigation,” said Matt Adams, vice president of the association.

The lawsuit, Adams added, aims to compel Encinitas to rescind its actions and comply with the law, but doesn’t request any monetary damages.

California’s density bonus law lets developers build more homes than normally allowed on parcels if one or more of the units is reserved for low-income residents. But residents have gathered en masse at council meetings to argue that the developments cram too many homes on sites at the expense of community character.

“You can’t — just because you don’t like it — ignore state law,” Adams said. “You can make the effort to try and change state law, but you do not have the luxury of ignoring state law.”

The council has lobbied at the state level to give cities more local control over the law. Yet state officials have said more cities need to join the chorus to usher in state changes.

Last July, the council voted to:

• round down on a calculation to reduce the number of homes in a density bonus project;

• require that affordable density bonus homes must be at least three-quarters the size of their market rate counterparts;

• and demand that developers seeking waivers — reductions in development standards — provide fiscal and physical documentation.

Those changes took effect immediately, affecting projects that weren’t vested.

At the time, councilmembers and some public speakers said the actions were within the context of the law or followed in the footsteps of other cities. For instance, they noted, cities like La Mesa round down, rather than up, when determining the number of density bonus units and they haven’t faced legal challenges.

But the association’s lawsuit, among other objections, maintains that California law and legal precedent states that cities must round up. Adams said he wasn’t aware of local cities that rounded down, but added that the association would look into it.

Councilwoman Teresa Barth declined to comment on the matter at this time.

The council is due to discuss the lawsuit in closed session.

Resident Stephen Keyes, who lives next to a proposed density bonus development on Fulvia Street, sent an email protesting the lawsuit to the Encinitas Advocate as well as to local and state officials.

“The industry makes a mockery of the spirit of this density bonus law, if not the letter of it, by fulfilling the absolute minimum required while maximizing profits,” Keyes said in the letter.

Elsewhere in the letter, Keyes wrote: “The abuse of the spirit of this well-intentioned law is clear in the numerous out-of-place, mini-developments it has foisted onto unwitting Encinitas neighborhoods. This issue has largely flown under the public radar until this past year or so.”

In addition to its July actions, the council has recently discussed language that would prohibit density bonus builders from counting land that can’t be developed, like a ravine. Doing so would reduce the size of the developments because lot size partly determines the number of allowable units.

The lawsuit contends this, too, is illegal and would unfairly constrain developers. If the city adopts it, separate legal action from the association could follow, the document noted.

Further, the litigation argues that the council’s density bonus amendments will make it tougher for the city to meet its affordable housing goals.

The Encinitas housing element, which hasn’t been updated since 1992 and is slated for the 2016 ballot, seeks to add affordable housing stock throughout the city. Density bonus housing is one source of low-income housing, the lawsuit notes.

“It didn’t play a large role in bringing this legal action forward,” Adams said of the city not having a housing element. “But it does add to the narrative of their lack of a commitment to providing affordable housing and housing in general for their citizens.”

Adams said that to his knowledge, Encinitas is the only city in the county that has taken issue with density bonus developments and the first in the region to be sued over the law.

Encinitas has eight density bonus projects in planning stages. Before the council amendments, some residents at council meetings said the city’s developer-friendly interpretation of the law made Encinitas a magnet for the developments. Others said that limited city land has encouraged builders to invoke the law.