Key facts
- Attorney Dave Rand's letter says the city's exposure "could therefore cost the city well in excess of $20 million."
- Rand said the city's denial violated Assembly Bill 2011 and the Housing Accountability Act.
- AB 712 extends any limitation period by 60 days from the letter's date, keeping the club's options open.
- The state housing department set a Nov. 25 deadline for Los Angeles to respond to its own letter.
- Glendale reversed its denial of a 682-unit project in late January after a state warning of fines up to $34 million.
Los Angeles has 60 days to approve 398 homes at Woodland Hills Country Club or face a lawsuit seeking at least $19.9 million in damages, according to a letter the club's attorney, Dave Rand, sent to the city on a Friday. Rand confirmed the letter's contents to HousingWire.
The letter says the exposure "could therefore cost the city well in excess of $20 million," and adds attorney's fees, costs and compensatory damages. Rand wrote that he could not imagine the risk to taxpayers "is worth it." He said the city's denial violated both Assembly Bill 2011 and the Housing Accountability Act, and invoked AB 712, which extends any limitation period by 60 days from the letter's date.
Rand laid out the fine math on social media. The base fine is $10,000 per unit for a violation and $50,000 per unit for a finding of bad faith. AB 712 raises the fine to an automatic $50,000 per unit if the city has lost in court at least once in the same housing element cycle. At $50,000 a unit, 398 homes come to the $19.9 million cited in the letter.
The damages claim follows an Oct. 23 ruling by the Second Appellate District holding that a homeowner could seek damages when a city misses a mandatory permit deadline. That case involved an accessory dwelling unit, not AB 2011, though legal scholars have said its reasoning could reach other ministerial housing laws, including the one Rand cites.
The state housing department has set a Nov. 25 deadline for Los Angeles to respond to its own letter and said it could refer the matter to the state attorney general.
Other California cities have reversed course when the cost of denial became clear. Glendale's council voted 4-1 last October to reject Trammell Crow Residential's 682-unit plan for a former Sears store, including 72 very low-income units. The state housing department issued a notice of violation on Dec. 30 warning of fines up to $34 million, and the council reversed its denial in late January, three months after rejecting the project. No lawsuit was filed, but the developer's attorney had called the case a "slam dunk" under the Housing Accountability Act.
Morgan Hill in Silicon Valley settled with High Street Residential, a builder's remedy developer, to avoid litigation with the developer and the state. The 105-home project had been in legal limbo for three years, and the city council unanimously approved it last week.